How Firm a Foundation - Hank the Deuce, 'Ping' Ferry, and what to learn from them.

It's not always true that the good that men do lives after them: Many of the great fortunes of modern capitalism have been turned to the service of anti-market forces. Their great foundations, born of good intention and high purpose, have become the private bankers for modern liberalism. Exhibit A is the Ford Foundation.

At mid-century, the Ford family was confronted by three influences: its own awakening sense of charitable obligation; the mounting concern among its lawyers that the estate tax could dislodge the family from control of the Ford Motor Company; and the urgency felt by Ford PR executives to associate the family name, then clouded by controversy, with good works of the warm and fuzzy sort.

Thus was born the first American mega-foundation. Tens of millions, then hundreds of millions, and by now billions of tax-advantaged dollars were secured in a charitable endowment. The later history of the Ford Foundation has been one of trust betrayed -- and audacity rewarded. Consider the problem of the American Left at mid-century. They had grand designs, as ever -- vast plans for what other people should do with their time and their money -- but precious few resources. The truly left-wing capitalists -- the Cyrus Eatons and so forth -- were famous in a man-bites-dog way, but they were always few in number. To reshape the American economy in its own image, the Left resolved to use the assets of America's proto-capitalist, the first great entrepreneur of the American century: Henry Ford. Now that is audacity squared.

How did they pull off the ideological heist of the century? As they say on the TV cop shows, here's my theory of the crime. The patriarch of the Ford family at the time was Henry Ford II, to whom it fell to superintend not only the car company but also the new sideline activity, the Ford Foundation. He needed help. And of all the young executives recommended to him to tend the family's philanthropy, one in particular caught his eye: Wilbur H. "Ping" Ferry. Over the succeeding years, Ping Ferry would become such a cultish figure among philanthropists of a certain age that he was referred to with the same one-name reverence as Hollywood in the 1980s would bestow on Frank, or, today, Barbra.

What did Henry Ford see in Ping? First, like Henry, Ping was an Ivy Leaguer.

Second, like Henry, Ping had grown up in the fancy suburbs of Detroit. Third, and most important, Ping was the son of a president of the Packard Motor Company, another automobile manufacturer. In other words, at least by bloodline, Ping represented to Henry Ford that highest of all human life forms: a car guy. There were, however, a few things Henry Ford didn't know about Ping Ferry. First, he never got along with his father. Second, he had no use for the automobile business. And, most important, he was a dedicated leftist who despised corporate America and the rapacity of its market system. He found much to admire in world socialism and would soon become a leading figure in the unilateral-disarmament movement.

The key moment occurs in 1950, and it is described in Ping's authorized biography. Henry Ford and Ping meet for lunch in a private dining room at the Detroit Club, the downtown refuge for generations of industrial captains. Henry Ford has a couple of drinks before lunch and appears distracted by business concerns. He is, in fact, getting punched around in the marketplace by a little outfit called General Motors. Ping pulls out a huge bundle of paperwork. Ford asks, "What the hell is this?" Ping replies that they are grant applications and that each one will have to be read and evaluated. Ford responds: "Are you crazy? Just tell me what's in them."

This was a sad and important moment in the history of bureaucracy. It was the birth of the executive summary: the one-page cover sheet that presumes to distill the essence of the 40-page document to which it is affixed. In the hands of the skilled practitioner, the executive summary would become the Swiss Army knife of modern bureaucracy: a single tool capable of performing 28 discrete operations. It was at this moment in Detroit, in that dining room, that philanthropic power - - the power to advance certain ideas while starving others -- passed from the donor to the nonprofit manager, and -- in this case -- from the capitalist to the socialist. Over time, of course, these summaries began to reflect less and less the distilled essence of grant applications, and more and more the political agenda of Ping Ferry.

How many miles did Ping take when Henry Ford gave him that first inch? By the mid 1950s those same Ford PR executives who had been so happily present at the creation of the foundation were up in arms. They were getting an earful from their network of dealers around the country. The controversy stirred up by Ping and his left-wing grantmakers was now spilling back onto the company. Something had to be done to protect the franchise. In 1956, the extended Ford family -- in all its dysfunctionality -- gathered its declining influence and pushed through the board of directors a resolution forbidding the foundation's affiliates from hiring or awarding grants to members of the Communist party.

With the keen corridor sense of the veteran bureaucrat, Ping understood that the game had changed, and he turned immediately to his exit strategy. Here, again, he proved to be a philanthropic innovator. To my knowledge, he was the first philanthropoid to achieve procedural efficiencies by fusing the roles of grantor and grantee -- tracing smoothly the arc from benefactor to beneficiary, as if, in a baseball game, he had served as both pitcher and catcher on the very same pitch. Nice work if you can get it, and Ping could. His soft landing was something called the Center for the Study of Democratic Institutions, and it was richly upholstered with millions in Ford money.

The idea behind the center was this: If you could gather in one place the greatest minds of the era, free them from the quotidian pressures of time and circumstance, and then turn them loose on the vexed questions of the human condition, the seemingly intractable problems of life would soon melt away before the power of their sustained insight. Right. For the center's home, they picked some pricy real estate: a hilltop in Santa Barbara overlooking the Pacific Ocean. Each morning the fellows, as they were called, would make their way up the hill to join The Conversation (yes, some of them capitalized it). It proved difficult to sustain much insight early in the morning, however, so The Conversation would begin at eleven o'clock and the fellows would add uninterruptedly to the sum of human knowledge until, oh, 12:15 or so, at which time they would adjourn for lunch on the terrace. Lunch would be accompanied, first, by a local wine and then, as one participant remembered, by the big wine. Some fellows found these sessions so stimulating that by mid-afternoon, back in their offices, they would be so lost in thought as to appear to be asleep. Other fellows would be hunched over their typewriters banging out interoffice memoranda, many of them attacking other fellows. These memos make for fun reading -- full of wit and personal venom.

Unfortunately, it quickly became apparent that none of the era's great minds had any intention of showing up, so the fellows began to turn on one another for keeps. Ping, of course, excelled in the composition of vicious memos, and outlasted most of his colleagues. But as it did ultimately for all of the fellows, his number came up one day, and he was expelled from paradise. Some years later, the center itself withered, and died an unlamented and virtually unnoticed death.

The Ford family came, over time, to understand that they had made irrevocable, multibillion-dollar mistakes in the central questions of mission and governance. In 1977, Henry Ford II resigned in frustration from the board, severing the last connection between the family and the foundation that will bear its name in perpetuity. For the Ford Foundation, the victory was complete, establishing a model for the subsequent capture of America's other great foundations. But the episode was also sobering: Henry Ford II's public criticism brought unwanted scrutiny to the foundation, so, for most of the 25 years since, it has embraced a relatively quiet, trendy liberalism rather than the rowdy radicalism of the Ping Ferry era. Even so, the ideological enthusiasms sometimes break through the institutional restraints. Just this past February, for instance, Ford gave $500,000 to the National Sexuality Resource Center in the rough Mission District of San Francisco. The purpose of the new center, according to director Gilbert Herdt -- editor of the book, Ritualized Homosexuality in Melanesia -- is to "make America safe for sexuality." (I have always thought that the best way to ascertain donor intent is to imagine the grant applicant making a face-to-face appeal to the founding donor. In this case, Mr. Herdt might have begun his pitch to the great automaker, "Mr. Ford, may I assume you're familiar with my classic study, Ritualized Homosexuality in Melanesia?")

For those involved in a foundation or thinking of becoming so, the lesson is clear: The time to prevent a hijacking is before the plane takes off.