Boston’s Barr Foundation raises its profile
Once legendary for its secrecy, nonprofit has dynamic new leader
For years, even in the cloistered world of high-end philanthropy, Boston’s Barr Foundation was famous for its extreme privacy.
Its gifts were given anonymously. Its website listed just a sampling of its “invitation-only” grants, and no dollar amounts. If the press called, it simply declined to comment.
That secrecy endured as Barr, created in 1997 by the riches of Continental Cablevision cofounder Amos Hostetter Jr.
and his wife, Barbara, grew into the largest family foundation in Massachusetts, now valued at $1.6 billion.
The Barr Foundation was “very hush-hush top-secret,” said Boston’s chief of policy, Joyce Linehan, who has worked for several nonprofits that received Barr funding. “It was like a secret society with a secret handshake, and you had to ask to be invited to click your heels together three times and you might get a grant.”
But the charitable foundation that used to be nowhere now seems to be everywhere.
When the head of the National Endowment for the Arts visited Boston last month, Barr Foundation president Jim Canales led her on a tour of the city. When Mayor Martin J. Walsh recently announced a major new “cultural planning process,” Canales spoke at the City Hall press conference.
And the Barr Foundation, which has given away more than $700 million since its inception, has become an influential voice on local policy, its vast wealth and formidable reputation giving it growing access to the city’s power structure.
“They’re cabinet members now,” said Jason Sachs, director of early childhood education for the Boston public school system, another beneficiary of Barr funding. “They’re working with government as it incubates ideas and as it builds partners, and they’re playing a very strong role.”
He described the Barr Foundation as a “virtual government” and “fairy godmother” bringing together nonprofit leaders and city officials on a variety of initiatives.
“In the Walsh administration, they’re very active participants in the policy discussion realm,” said Linehan, who estimates that she speaks with Canales once or twice a week. “Guidance is a strong word, but they offer their expertise in areas in which they are experts.”
The Barr Foundation’s emergence from the shadows began about five years ago, when for the first time it publicized one of its gifts: $50 million in multiyear grants to organizations fighting climate change, one of its three main areas of giving, along with arts/culture and education.
That growing openness “has clearly accelerated to warp speed under Jim Canales’s leadership,” said Laura Perille, president of Edvestors, a Boston nonprofit that receives Barr funding.
Canales, 48, a San Francisco native who came to Barr a year ago after two decades at the James Irvine Foundation in California, embodies the new face of Barr. Affable and outgoing, he has become a blogging, tweeting man-about-town.
On his watch, the foundation has put on its website a searchable database of its grants and several years of tax returns, offering a detailed look at its spending and investments. It has also joined Glasspockets, a national initiative to encourage openness in philanthropy, since his arrival.
“A lot of people don’t know what foundations do or how they operate,” Canales said. “It’s an industry that is quite opaque, so my goal is to lend more transparency to how they work and how they make decisions.”
A former high school English teacher who grew up in a predominantly Latino low-income neighborhood, Canales is unusually frank about what he calls a lack of humility that often exists in the philanthropic sector.
“An occupational hazard in philanthropy is arrogance,” Canales said. “Everyone tells you you’re so smart, everyone loves your ideas, and you don’t get a lot of honest criticism in this field.”
Canales is also nudging the media-shy Hostetters, Beacon Hill residents whose net worth is estimated by Forbes at $3.2 billion, to talk more publicly about their grant-making.
During a conversation at Barr’s offices on Lewis Wharf, overlooking Boston Harbor, Barbara Hostetter, 57, acknowledged that she and her husband, 78, “definitely get a knock about being anonymous for a good many years.”
She said their intention was not to have been secretive, but to avoid public scrutiny while navigating the “really steep learning curve” of trying to become effective philanthropists.
“In philanthropy you have to be willing to take risks,” she said. “If you went in determined that your money is always going to be used to its best advantage, you would miss opportunities.” Over time, she said, Barr developed into “an adolescent who was ready to grow up.”
To Boston Foundation president Paul Grogan, the Hostetters are undergoing a natural evolution as they become more comfortable with spreading their wealth. “I think what they’ve come to understand,” Grogan said, “is that the way foundations accomplish things is by being influential in addition to just giving grants.”
Canales’s work at Barr, which has a 22-member staff, comes with handsome remuneration. He disclosed that his base pay is $567,000 and his total compensation, including benefits, is approximately $725,000, the same amount he was paid in his final year at Irvine. Canales and his partner, James McCann, a doctor at Brigham & Women’s Hospital, live in a $1.9 million condo at Millennium Place, a luxury high-rise in downtown Boston.
The Barr Foundation’s increasing visibility makes it subject to more scrutiny in a running debate over the massive amount of money held tax-free in the country’s roughly 88,000 private foundations, and their growing influence in shaping public policy.
Barr money is distributed so widely throughout the nonprofit community, and is so coveted, that critics of the foundation are rarely willing to speak publicly. But one person who benefitted from a Barr grant, speaking on condition of anonymity for fear of jeopardizing future funding, considers the foundation overly controlling of its grantees.
“In philanthropic giving, there are two strains of thought: One is that funders know best what should be done, and the other is that people on the ground know best,” the person said. “Barr definitely falls in the category that they know better . . . and the hope is that Jim will rein in some of that high-handedness.”
Canales said he believes Barr strikes the right balance of “ensuring there’s accountability, but also ensuring ample flexibility to its grantees.”
According to its most recent tax return, Barr gave away $52 million in 2013, less than the 5 percent yearly required by the IRS, but permissible because Barr has given away more than 5 percent in previous years and the amounts can be averaged over time.
That type of accounting, while legal and common, is a pet peeve of Al Cantor, who runs a New Hampshire consulting firm to nonprofits.
“They gave less this year because they overspent in previous years? Give me a . . . break,” Cantor said. “I mean, give it away!”
Canales said Barr’s grant-making is designed to generously support charitable causes without eroding its endowment, since Amos and Barbara Hostetter, who have three children, want the foundation to outlive them. Some wealthy donors aim to spend their foundations out of existence before their deaths.
“These are two remarkably generous, incredibly thoughtful people who care deeply about making a difference,” Canales said of the Hostetters, “and I view it as enormous privilege to make sure this foundation meets their aspirations.”