tv The David Rubenstein Show Peer to Peer Conversations Bloomberg April 29, 2022 9:00pm-9:30pm EDT
david: this is my kitchen table and also my filing system. over much of the past three decades, i've been an investor. [applause] the highest calling of mankind i've often thought is private equity. [laughter] and then i started interviewing. i've learned from doing my interviews how leaders make it to the top. >> i asked him how much he wanted, he said $250. i said fine. i didn't negotiate with him. i did no due diligence. david: i have something i'd like to sell. you don't feel inadequate being the second wealthiest man in the world? is that right?
[laughter] one of the most influential figures in the world of philanthropy is darren walker. he currently heads the ford foundation and has revolutionized its giving. he also is an influential figure in the world of culture and arts. i had a chance to sit down with him recently to talk with him to talk about how he rose from modest circumstances in texas to become a leading figure in the world of philanthropy, culture and art. as the head of the ford foundation, you are one of the most important people in the world of philanthropy. but tell us, how has the world of philanthropy changed because of covid? darren: i am not sure i agree i'm the most important. i think i am part of a constellation of people who are lucky enough to lead foundations like ford or rockefeller. any of the great legacies. but covid has absolutely impacted how we do our work both internationally and domestically. let's start with internationally. the reality of this moment is
that we are seeing tremendous inequality in the ways in which vaccines are being distributed, the ways in which they're being manufactured, and the issues around cost, intellectual property, which are profound and are having a tremendous negative impact, especially for people in africa and much of the global south. in the united states, we know that covid has meant that communities that are historically the most vulnerable are doubly impacted because of covid. and so what that has meant for philanthropy is that we've had to double down in some ways and also recognize in the united states the covid moment has coincided with the george floyd racial reckoning moment. and that has brought into stark relief the challenges for people of color, especially in low income communities. david: ok, let's talk about the ford foundation.
it's something that you've done that innovative that's deals with covid. when covid came, you convinced the ford foundation trustees and some others we'll talk about to borrow money. you borrowed $1 billion. why did you need to do that? darren: we needed to do that because if you remember, at the beginning of covid back in march and april of 2020, the markets were very choppy. and what i was concerned about was on the one hand, on the needs side, we were hearing from many arts organizations, organizations working on food security and direct services, that they were in huge distress. remember, arts organizations had closed their doors. there were no revenues. the nonprofit fundraisers had been canceled. donors were beginning to get a little nervous about pledges. so we would see the need to increase our spending while at the same time, our denominator, our endowment was going down in value.
and i had seen that happen in the last down market cycle, where the need when up and our endowment went down. so in order to really address the need side while maintaining good fiscal responsibility of managing the endowment, and of course, because of the luck of having jerome powell in charge of the fed and basically announcing in the middle of march that money was free, i mean, basically, and what happened with the yield curve made it quite possible for us to think about debt as opposed to taking money out of the endowment. and so it was really just a matter of arbitrage. david: was it hard to convince your trustees to do that? darren: initially, they thought it was out-of-the-box, of course, because no foundation had done that before. but once, especially the investment committees, started to think about the options, it became clear it was the best option. david: were you able to get other foundations to do the same? in terms of borrowing money?
darren: there are a number of foundations who have done this. macarthur, kellogg, doris duke. and we now have probably eight or 10 who have issued bonds. but the bigger message was we needed to do more, that simply going by the irs minimum of 5% payout in the time of covid, at a time when, ultimately, we had more money than ever, it simply was not morally defensible to spend 5%. david: so let's talk about george floyd. you mentioned him earlier. you've lived through the civil rights revolution in the 1960's. and we had the post-civil rights efforts in the 1970's and 1980's. it seems as if not until george floyd was murdered that some people in the corporate world and the government take seriously the discrimination and other challenges african-americans face. was it your perception that george floyd had an incredible impact, more than you thought one murder might have had? darren: well, i think what was different, david, was that first, we were all at home as a country.
and secondly, this was fully videotaped, from the moment he was put on the ground until his last breath. and that it was photographed, that it was videotaped, and that the perpetrator was fully aware that he was killing someone and clearly assumed that he could do that with impunity, i think that is what we americans, the average american, found so appalling and so antithetical to our values as a people. and so it had a huge impact far beyond the issue of policing and civil rights to the boardroom. david: you think it will be enduring? in other words, the boardrooms have a big effort to have more african-americans and women on board. do you think it will last, or is it for a short time after the
george floyd murder? darren: there is no doubt that some of the rhetoric from some ceos was performative. but i believe we are seeing a real paradigm shift, where we understand that diversity in the boardroom is more than one. i'm a member of some public company boards. and there was a time when there would be one black and one hispanic. and maybe one or two white women and you had diversity. i think now we understand that is tokenism. diversity is fully embracing the idea of the intersection of talent and representation and that you can get both. david: do you think discrimination against african-americans is greater than discrimination against people who are gay? darren: i think race is a very challenging feature of american life. and when you look at the
progress of lgbt, when you think about something like marriage equality, which polled in the low double digits as recently as 15 years ago, and now a majority of americans support. i think part of the reason for the progress was because most americans, most white americans, could relate. they could relate to ellen degeneres coming out on abc on national tv because she was the girl next door that they' fallen in love with for five seasons. they could relate to some of the people who were on the front lines leading the efforts and the marches. they knew that these young people were their children and grandchildren. it is harder on the issue of race, and it's because in this country, we have a difficult history. i love the united states of
america because i know that there is no country in the world where my story would be possible. i revere the founding fathers in spite of their flaws because they made it possible to actually fix the problems they didn't have the courage or the will to. and so i believe that we have to deal with that fundamental history, the contradictions and complexity of this country. ♪
darren: i am definitely not from new york city. i was born in a charity hospital in louisiana, a little town not far from lafayette and baton rouge. david: you were raised by a single mother? darren: i was. david: you grew up in texas more than louisiana. darren: we moved to texas when i was a little boy. david: you went to the university of texas? darren: i did, indeed. i'm proud to say, david, that i have never attended a day of private education in my life, from head start through law school, public education was my path. david: so, you went to the university of texas. how did you do there? darren: i did ok. david: were you elected president of the student government or something? darren: i was the head of a number of organizations, and i was very lucky because i lived at a time in this country when i knew in spite of the challenges that i faced as a boy, as a young man, that my country was
cheering me on. i never for a moment felt that my dreams and aspirations could not be achieved, and i never felt that america didn't want anything for me but success. and so, yes, i had a great run in college and in law school that brought me to new york, but the tailwinds were with me. david: but you must have suffered some discrimination in texas or louisiana as an african-american. was it difficult or was it not? darren: of course. there were many occasions, countless occasions when i faced discrimination. i mean, when i faced people saying things to me that were heartless and harmful and difficult to hear. i mean, i recall in high school when i won an election for student council and the person i -- or a friend of the person who
lost to me told me that no matter how successful i might be in the future going off to the university of texas, etc., that the most successful black man in america would always be below the least successful white man in america. so i was told this when i was 16. imagine hearing that, but also, who taught a 16-year-old that idea? and so i think about that when you ask questions like this. you know, did you face -- sure i did. but what i actually worry about is that kind of thinking is substantiated in some segments of our society, which is so harmful to our democracy. david: so you graduated from the university of texas law school and rather than stay in texas, you headed to new york and you went to a very, very famous law firm, cleary gottlieb. and did you want to be a great corporate law partner? what did you want to be? darren: no, i didn't want to be.
what i wanted not to be ever again was poor. i did not want to be poor. and when you grow up on the precipice of an economic collapse in your own family, it leaves you, it leaves an indelible mark. when you are a kid and you're waiting for your mother to pick you up at school after a debate tournament and she never turns up and you walk home and you find out it's because her car was repossessed, that leaves a profound mark on your psyche. and so, to be completely candid, i didn't want to be poor. and i didn't choose a career path to wall street because i loved the law or when i left to go to ubs because i loved asset backed collateral.
i liked the idea of some semblance of financial security for me and my family. david: alright, so you made some money at cleary gottlieb and then you went to ubs. you're in the financial services world, as it's now called. but then you left to work at a nonprofit in harlem. why did you do that? darren: because for me, it was never about piling up money. for me, it was ultimately about service. david: you did that for a number of years, then you joined the rockefeller organization. then you were recruited to go to the ford foundation. darren: i went to ford as a vice president. ford was a much larger foundation. it's about three times the size of rockefeller. so it was a lateral move, but i had a bigger remit. david: so ford was looking for a new president and you were one of the candidates. and as i understand it, you went into the interview and said i'm going to change this completely if i get this job. i'm going to focus on social inequality and make everything dealing with social inequality our focus.
is that right? darren: yeah, so what i said was the foundation have lost our focus and that we needed a single northstar for our work, which we did not have, and really never had. david: when you got the position, ford announced, guess what, we're going to focus solely on inequality and so forth. what did your recipients of your aid say? darren: part of it is stepping back and asking why do we focus on inequality. the reason i believed in equality was important was because of our mission. a part of our mission as established by henry ford ii, was to strengthen our democracy. i believe the greatest threat to our democracy is growing hopelessness.
and hopelessness occurs in societies where there is high levels of inequality. so the correlation of inequality and hopelessness is what is a threat to our mission. and so the goal was to get people to understand no matter what you're working on, it is having some impact on poor people because of the growing inequality in the world. david: ok, it's one thing, though, to get the job. but then you have to do the work of convincing your staff people to change what they've been doing for so many years. was that hard to do? darren: it was not without difficulty. it was not without some long-term employees leaving the foundation. it was not without some long-term grant organizations leaving the foundation. david: did you feel you needed security? darren: no. david, the role of a foundation
leader like me is one of great privilege. and i say that with all humility because this is not about me as a person. this is about the job i hold. i am under no fantasy or misunderstanding of why, if you say, i may be in demand. i am not in demand because darren walker is that interesting of a person. i am in demand because i am president of the ford foundation. and when i am no longer president of the ford foundation, i can assure you, i'll have lots more time to have dinner with you. david: the jeff bezos fortune. he's giving away money. his former wife is giving away money in different ways. is that a new model? darren: no country in the world has the diversity of ways of giving as we do in the united states. so, i celebrate every time a new foundation is created in whatever form.
♪ david: in the united states in the early part of the 20th century and then in the mid part of the 20th century, wealthy people like rockefeller set up foundations where they would take their stock or other assets and put it in a foundation would be to some extent controlled for a while by families, but then eventually the families would not be in control. in the ford foundation case, henry ford famously got off the board many decades ago because he was not happy, it was said, with the ford foundation. now you have reengaged the ford family. was it hard to do? darren: henry ford ii left the board in 1976. it is true he was unhappy with the work of the ford foundation. he was unhappy because the work we did in the american south to
advance integration and to support efforts to deem illegal discriminatory practices was a problem because southern dealers felt the displeasure of southern consumers. so henry ford ii was hearing from ford motor company dealers that their consumers didn't want to buy our cars. so he decided to leave. we have been independent of the ford family and ford motor co. for over six decades. i believed that it was critically important for us to reengage the ford family. this is where the money came from. it was important to reengage in the city of detroit. and this is why we played a pivotal role in that bankruptcy. re-engaging with the ford family was easy. bill ford and his mother, martha firestone ford, are among the most amazing people i know. and they were happy to reengage. two years ago, we elected henry
ford iii, the grandson of henry ford ii, to our board. david: now, as i mentioned earlier, a lot of prominent people when they get to be 60, 70, maybe 80, they would set up these foundations. but now, a lot of people have gotten very wealthy in their 30's, 40's, and 50's, and they don't set up these traditional foundations. they just kind of give away the money in different ways. it's not having a board like yours operate. is that the new model, which is to say something like what's being done with, let's say, the jeff bezos fortune? he's giving away money. his former wife is giving away money in different ways. is that a new model or do you think the traditional model, the ford foundation, the rockefeller foundation, will stay as the model for large philanthropic foundations? darren: i think the model of philanthropy over many decades will continue to exist. but the exciting thing about this moment is that there are new models. you mentioned two terrific ones
like what jeff bezos is doing, as well as mckenzie scott. all of these are part of a landscape of philanthropic pluralism, which we should celebrate. no country in world has the diversity of ways of giving as we do in the united states. so, i celebrate every time a new foundation is created in whatever form. david: let's suppose you're not a billionaire. you're just an average person. why should you want to give away money? you work hard to get this money. why not just buy things for your friends and family? darren: first of all, some of the best philanthropists in this country are small donors. they understand what it is like to work really hard and for many of them, they don't have a lot of disposable income and yet they give to their church. they give to their food pantry. they give to their homeless shelter. and that's because in this
country, there is a civic imperative of the individual to do what he or she can to make a difference in improving our communities. so, i celebrate those small impactful donors. but i also, though, worry that for many wealthy people, the idea of giving often is not driven by a sense of just making a difference, but it's making a difference with strings attached. it's making a difference, but doing it the way i want it done rather than what the experts might say. so it's that calibration that concerns me. david: you and i serve on the national gallery of the art board. and every art institution i know of wants you to serve on their board. you're very involved in the art world. what is it about art that attracts you? darren: well, art is essential in a democracy, david.
art is so important. we know what art does to young people. we know exposure to art brings about higher levels of empathy. it helps people understand how other cultures, how other people live. and it just brings out the kind of humanity in all of us. there are times when i have observed leaders use language that is inhumane while talking about other human beings, while talking about the world. and i think to myself, this person has clearly never engaged in beautiful poetry. they've never listened to the words of a great playwright. they've never sat and reflected on a beautiful painting or a picture. because if they had been really
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>> deflation is a terrible thing. inflation you can tolerate. >> you can trade anything as a trend follower. >> when you think about bitcoin, i don't think it's a currency. i think it's a commodity. >> today, we're in an everything bubble. jason: i'm jason kelly. welcome to bloomberg's "front row." today, i am talking to joseph bae and scott nuttall, the co-ceo's of kkr, in their first major interview since being promoted to those jobs late last year. bae and nuttall run one of the most storied investment firms in the world. it was founded in 1976 by henry kravis and george roberts, along with their mentor jerome kohlberg. now, 25 years after joining his analysts, bae and nuttall have inherited an even more
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