Profile: Newman’s Own Foundation

October 16, 2018

Key Statistics

Founding Date: 2005
Location: Westport, CT
Assets (2015): $216 million
Total Grantmaking (2016): $27 million
Number of staff: 7 (for grants operation)

Background

Newman’s Own Foundation is an independent, private foundation formed in 2005 by Paul Newman to maintain his commitment to philanthropy. The Foundation is the sole owner of Newman’s Own, Inc., the food and beverage company, and is funded entirely through the net profits and royalties generated from the sale of Newman’s Own products. It does not have an endowment, raise funds, or accept donations. The Foundation has a unique relationship with public consumers through its promise to donate 100% of profits generated by the Newman’s Own company and any associated royalties to charity, and maintains the informal and adaptive style of Paul Newman in its operations and management.

Core Framework

Newman’s Own Foundation is a grantmaking foundation whose operations are funded principally by the sale of Newman’s Own food and beverage products. Its guiding principles and culture are defined by the vision of Paul Newman and his values. Although Paul Newman did not restrict the Foundation’s activities or grantmaking focus, it is his legacy that forms the Foundation’s work and operating style. The food company and foundation embody the value that “quality always trumps the bottom line” in its interactions with grantees and partners, .  All of its planning and behaviors, from the ingredients in its products to interaction with grantees and otherpartners, are representative of its responsibility to promote the common good.  NOF also owns all personal publicity rights of Paul Newman and on a limited basis has licensed such rights.

The Foundation is influenced by its balance between order and creative chaos, maintaining planning functions while valuing the spontaneity that characterized Paul Newman’s giving style. The Foundation’s relatively high tolerance for risk also defines its approach to grantmaking.  The Foundation’s social compact is strongly associated with its relationship to the public, and the need to earn the public’s trust as a food company as well as a philanthropic entity. Its operating capabilities center on a flexible and networked approach to grantmaking that values creativity and nimbleness.

Charter

Newman’s Own Foundation operates with a stewarded charter that is formed by the donor’s legacy and values. Leadership and staff have the freedom to interpret that vision and define the Foundation’s framework and programmatic areas for grantmaking. The Foundation’s charter is not directive or codified, but operates as a framework for decision-making and a shared set of values that determine the Foundation’s priorities. There are key elements of Paul Newman’s legacy that are reflected in the Foundation’s stated values, which are on the website and posted on the wall of the food company and the Foundation, such as “We take our work seriously, but not ourselves,” and “We trust and respect our colleagues.” Paul Newman’s personal values of humility and generosity have become core values of the Foundation in its operations and practices.

The Foundation’s central tenet of giving all profits to charity is the defining characteristic of Newman’s Own, the food business, and was established by Paul Newman at the time he created his food company in 1982. The Foundation currently owns 100% of the company and intellectual property associated with Paul Newman and his name and image. It is also a core value of the Foundation to trust and show respect and appreciation for leaders of the nonprofit sector and its grantee organizations. This value is connected to the Foundation’s practice of avoiding prescriptiveness in its grants and encouraging new ideas and initiatives in its grantees.

Social Compact

[Nonprofit leaders] are hard-working people, committed, trustworthy, underpaid, and a lot smarter than we are about the issues they’re dealing with, whether it’s in a local or in a global community.

– Bob Forrester, President & CEO

The Foundation has a strong commitment to accountability to the nonprofit sector, and to the public at large. Its reputation as an effective charitable institution is tied to its reputation as a food company, and both functions must earn the trust and respect of the public to be successful. The Foundation earns its financial resources through the food company, and therefore the food company has to be successful in a competitive market. The maintenance of a trustworthy brand is of critical importance. For this reason, the Foundation tends to maintain distance from socially or politically polarizing issues that could alienate significant portions of the population.

This sense of public accountability informs  the food company’s value of “quality trumps profits,” which was also a stated value of Paul Newman. “Quality” is defined broadly, and includes both the quality of food products, and the value of respectful relationships between staff, grantees and partners, as well as the organization’s ethical framework.

The Foundation exemplifies its accountability to the public by serving as an alternative to government, and as a risk-taker in identifying and supporting promising models of service. President and CEO Bob Forrester says, “The nonprofit sector, in many ways, is the research & development of society,” meaning that it is philanthropy’s role to test new methods for serving populations in need. The Foundation does not seek to influence public policy, but it does seek out and invest in early stage organizations that it sees as potential key influencers in a field of interest. Pilot programs that launch a new model  in programmatic areas are also of interest to the Foundation. Forrester says, “We relish the opportunity” to take risks on these kinds of grantees, and sees it as an important responsibility for foundations to use their flexibility and autonomy to take measured risks.

Because of the food company’s public commitment to donate 100% of profits to charity, the Foundation feels a particular obligation to be clear and transparent about its grantmaking, to demonstrate that it is fulfilling its promise. Another motivation for the Foundation’s external communications is to highlight its grantees and draw attention to their work. The Foundation recognizes its public stature in relation to the food company and seeks to share the spotlight with grantees, especially smaller organizations that have limited capacity to share their stories with broad audiences. For example, the Foundation provides templates for press releases and social media assistance to help grantees promote their work and their affiliation with Newman’s Own Foundation.

Beyond leveraging its communications capabilities to shine a light on grantees, the Foundation also uses its role as a convener, collaborator and influencer to increase the impact of grants. The Newman’s Own Foundation uses non-financial resources to build the capacity of grantees and engage the full leadership of the organizations. Through its network, including Board members, staff, business partners, and other grantees, the Foundation has access to valuable expertise in fundraising, branding, good governance, finance, and legal services. In the spirit of true partnership, the Foundation collaborates with grantee leadership to help organizations achieve comprehensive growth. In recent years, the Foundation has developed its role of convener by creating peer learning cohorts of grantees within certain grant initiatives to help organizations grow and share with their peers.

In addition to convening like-minded groups of grantees for peer learning, the Foundation organizes other non-financial assets for many grantees, including a select group of strategic grantees where the Foundation makes longer term grant commitments, but also engages with those grantees at a deeper level.   This deeper level may include having a representative from the Foundation on its board, creating a committee to help evolve one of its programs, providing pro bono resources in the areas of fundraising, board development, event planning, and general capacity building/strategic planning, and providing networking opportunities and access to other funders whenever possible.

Decisions at the Foundation have retained some elements of the spontaneity and informality with which Paul Newman approached grantmaking during his lifetime. Before the Foundation was created in 2005, Paul Newman made all grants from income generated through Newman’s Own via a flexible and intuitive process, taking the advice of a wide range of associates and advisors. Once the Foundation was established, Newman himself still led decision-making, but largely through approval of grants proposed by Foundation staff and a large community of associates and partners. Since Newman’s death in 2008, the Foundation has retained some characteristics of his flexible approach to giving, while adding more planning processes.

There are about 120 associates in the Community Partners Program, including business associates and partners, staff members, board members, and family members, who can recommend grants to the Foundation staff. These associates have discretion to recommend grants that fall within the Foundation’s focus areas of children with life-limiting conditions, food and nutrition, empowerment, and encouraging philanthropy. Associates in the Community Partners Program are based in disparate geographies, and greatly expand the footprint of the Foundation’s work to other regions of the world.

We’ve gone from a really informal environment to one that maintains the benefits and values of informality, but has brought more order and accountability to the grantmaking itself.

– Bob Forrester, President & CEO

Operating Capabilities

Newman’s Own Foundation’s core capabilities reflect the balance between flexibility and structure that are at the heart of the organization’s culture. Decision-making responsibility is distributed across the organization to give staff leaders autonomy and flexibility, while maintaining strategic focus through the framework of the four focus areas and the Foundation’s guiding principles. The President & CEO of the Foundation can approve grants up to $250,000, and the Managing Director can approve grants up to $50,000. Larger grants require board approval.

Managing Director Kelly Giordano describes the Foundation’s approach as flexible within a planned framework. While the Foundation makes a plan each year to meet its projected grantmaking budget, it also maintains the spontaneity that Paul Newman used to make decisions and remains flexible and open to new opportunities where the Foundation can be helpful and have impact. With a lean team of seven people working on the Foundation’s grantmaking (including the President & CEO,) fluidity and creative thinking are highly valued.

We want to be an organization that’s known for its imagination, its ability to engage in new ideas. We are proactive in terms of engaging our grantees, but not prescriptive.

-Bob Forrester, President & CEO

The Foundation looks to nonprofit organizations working in its areas of interest for their leadership in proposing new ideas and initiatives, and is comfortable with supporting pilot programs and new strategies that other funders might not support. It uses its perspective and experience in supporting many different approaches to the same core issues to raise the level of knowledge across the field, and offers its constructive viewpoint to help grantees increase their effectiveness.

An important value at the Foundation is using networks and relationships to advance its work and operate more efficiently. With a small grantmaking staff, the Foundation relies on proactively conducting research in the field to assess different approaches to key issues, talking with peer funders, and identifying innovative organizations to inform its grantmaking strategies. It has invested in connecting grantees with each other, and creating peer learning cohorts of grantees to foster collaboration and sharing of ideas. The Foundation also emphasizes strong communications with the public to share what it learns and promote grantees’ work.

Theory of the Foundation in Action

Playing the role of connector and convener has become much more embedded in the way we work on a daily basis.

-Kelly Giordano, Managing Director

Newman’s Own Foundation has recently launched a new model of helping selected grantees learn from each other and build their capacity through a learning cohort. The Foundation believes that the best way to advance its fields of interest is by supporting effective organizations that provide direct services to priority populations, since these organizations know and understand the people they serve. It is the “human face” of the nonprofit sector that creates and drives large-scale impact. Collaboration among cohort members helps stimulate and share innovative approaches that lead to effective solutions. “Frequently within direct service, you can find the larger answer to issues,” said Bob Forrester.

Beginning in 2015, the Foundation created a cohort of six grantees working in the field of nutrition across different regions of the country. The members of the cohort received multi-year capacity building grants to strengthen their own organizations’ infrastructure and programs, and were invited to join a grantee-directed peer-learning cohort that would come together through regular convenings. The purpose of the cohort was to create relationships among grantees that would last beyond the duration of the capacity-building grants, and for the members of the cohort to define what it would be and how it would operate.

Convenings began as meetings that Newman’s Own Foundation staff organized and facilitated. Beginning in late 2015, members of the cohort began running the meetings themselves, with four self-facilitated convenings in 2015 and 2016, and two more planned for 2017. The group of grantees determines topics for discussion, writes the agenda, facilitates the meeting, and invites outside speakers as desired. Although Newman’s Own Foundation staff always attends the convenings, assist with logistics and cover costs, the cohort is now led by the member grantees. The members have chosen a peer-to-peer learning model as their structure. The Foundation hopes to continue to provide financial support to the organizations once the current multi-year grants end.

Empowering members of the cohort to define the purpose of the group and determine the content and structure of meetings was an intentional way to encourage grantees to sustain their relationships with each other and to avoid imposing the donor’s viewpoint on the group. A close and collaborative relationship with all grantees, especially those within the cohort, is also emblematic of the Foundation’s operations and values. One member of the nutrition cohort said that it was a unique situation to be able to sit in a room at a convening with a funder and speak candidly about their organization’s struggles. This openness is a result of the close and candid relationships that the Foundation establishes with its grantees, partners, and peers. The convening power of the cohort model is employed in some other arenas of the Foundation’s work as well. This commitment to shared learning and collaboration is emblematic of the Foundation’s value of respectful relationships and the importance of networks.