Stanford University and Foundation Funding: Developing an Organizational Capability, 1920-1960

In September 1960, the Ford Foundation announced a three-for-one matching grant that would bring $100 million to Stanford University. The $25 million from the Foundation represented more than Stanford received from tuition, gifts, and government contracts combined in fiscal year 1959. It was the largest unrestricted grant in the history of higher education. It also culminated a process of co-evolution of organizational capabilities for foundation and university. In the early 20th Century, private universities—especially new ones such as Stanford, the University of Chicago, and the Johns Hopkins University—found a much-needed source of additional resources in the Carnegie Foundation and the Rockefeller Foundations. By then, American foundations had shifted their higher education mission from the needy (charity) to those able to make an impact (investment), enriching research universities. Stanford was a beneficiary of “insider granting” when Stanford University President Ray Lyman Wilbur served as a trustee of the Rockefeller Foundation and the Rockefeller’s General Education Board, advocating on behalf of his as institution during deliberations about grants during the 1920s and 1930s. In the 1950s, the Ford Foundation (then the world’s largest) sought grantees who took a more systematic approach about their plans and associated resource needs. Stanford administrators had began such an approach in the late 1940s, soliciting departments regarding their needs. Along the way, Stanford added staff for planning and the Ford Foundation added staff for grant review. This proved helpful in 1959, when Ford instituted a series of institutional gifts, and Stanford could readily share their long-term plans and related financial needs. Stanford University’s approach to foundation funding had evolved from personal influence to become a replicable organizational capability.