About this Assessment
The $800 million Hess Foundation was established by the late Leon Hess, founder of oil company Hess Corporation and former owner of the New York Jets football team. Today, the foundation is run by his three children: Hess Corporation CEO John Hess, Marlene Hess and former Pennsylvania legislator Constance Williams, along with two other trustees. The foundation has no defined goals, strategies or program areas. The bulk of its grants go to large arts, education and health institutions in the tristate region of New York City, New Jersey and metro Philadelphia. Especially compared to other grantmakers of similar size, the Hess Foundation lacks transparency and access: it has no website, no paid staff, and no way for potential nonprofit or foundation partners to reach out to its leadership. It is the only foundation Philamplify has studied to date that has not responded in any way to our numerous outreach efforts. While grantees are grateful that the funding comes with no strings attached, they seek more communication and more public leadership from the foundation. Peer funders would also like opportunities to collaborate with Hess. The foundation should develop systemic change goals and strategies, invest in staffing and communications and diversify its holdings to safeguard its assets and become more impactful.
The assessment of Hess Foundation was conducted by Elizabeth Myrick.
Tell us what you think of this report!
You may comment anonymously or login to register. After typing your feedback, indicate “Guest” in the name field and add your email address (for us to know you are a real person). Check 'I’d rather post as guest’ and your information will not be shared.
Key Finding and Recommendations
Retain the strongest elements of Hess’ grantmaking: the personal commitment, long-term operating support and manageable reporting requirements that “let grantees do their work.”
Grantees value the Hess Foundation’s unrestricted support and minimal reporting requirements.
Grantee Quote: “Offering general operating support without reporting requirements is crucial and rare for small nonprofit organizations.”
Include peers and grantees in the decision-making process to better envision the systemic impact the Hess Foundation can have, especially among marginalized communities.
Fewer than two in every ten Hess grant dollars explicitly benefit underserved communities. Still fewer are directed toward systems change and equity. The Hess Foundation awards grants to large, established, often elite organizations that focus on communities and issues with which Hess family members have direct and personal ties.
Grantee Quote: “Reduce number of thematic areas, pick two or three areas of focus and go deep in each; engage in three-way conversation – donor, grantee and community/stakeholder – to make final assessment of impact and value of project.”
Increase the Hess Foundation’s transparency, improve communications and look for opportunities to be a leader in addressing community issues. Invest more deeply in relationships with nonprofits and peer funders. Grantees and other stakeholders are saying: “We want to know and work with you,” and the foundation should take note.
The Hess Foundation’s operations are insular and lack transparency. As a result, the foundation remains a mystery to potential nonprofit and philanthropic partners and misses opportunities to exercise leadership and amplify impact. Grantees would welcome opportunities for increased communication, dialogue and partnership with foundation leaders.
Grantee Quote: “Interact with grantees to align interests and work collaboratively to fund specific initiatives.”
Increase Hess Foundation payout to NCRP’s recommendation of six percent of total assets for grants, plus operating expenses. This increase would allow the foundation to invest in targeted issues and communities while improving internal operations, including professional staffing, communications, governance, succession planning and “next gen” engagement.
The Hess Foundation’s “checkbook philanthropy” pays out the legal minimum in grant dollars, is governed by a small, homogenous board and employs no dedicated professional staff. For a foundation of its size and potential influence, the Hess Foundation operations are atypical and serve to weaken, rather than bolster impact.
Grantee Quote: “I would increase foundation staff interaction and communication with grantees regarding funding priorities and desired impact and transparency about foundation interests, goals and application/decision-making process.”
Diversify the Hess Foundation’s investment portfolio to manage risk and volatility while better serving its charitable purpose over the long term.
Both the Hess Foundation and the charitable lead trust (CLT) that provide annual income to the Hess Foundation are heavily invested in Hess Corporation stock. The charitable vehicles and associated investments enable the family to retain ownership of Hess stock, free from capital gains or inheritance taxes, until 2035, when the CLT is scheduled to revert to Hess heirs. The lack of asset diversification may benefit the Hess family, but it places the foundation’s charitable assets at risk and does not represent best investment practice.
Stakeholder Quote: “The charitable nature of these things gets so obscured. How can tax attorneys keep both the charity and the donor’s interests in mind? It is the fox in the henhouse.”