Jeremy Nowak’s Vision for a New Philadelphia

Armed with a $2 billion endowment, visionary William Penn Foundation president Jeremy Nowak wanted to bring to life a new Philadelphia. Old Philadelphia, it seems, has other ideas.

In the early ’90s, while the foundation was struggling to find an identity, Jeremy Nowak was raising his family in pre-gentrified Northern Liberties. He liked the diversity of the neighborhood; he liked that it was on a border between worlds. “While I have lived in New York and San Francisco for periods of time,” he emails, “I am a Philly guy (for better or worse).”

Nowak was born here, at 7th and Girard, the son of a small-business owner and his wife. He attended Philly public schools. He studied philosophy as an undergrad at Penn State, then earned a PhD in cultural anthropology from the New School for Social Research in New York. Learning about philosophy and anthropology “prepared me for understanding the historical evolution of ideas, including those that populate economic theory,” Nowak once said in a speech. “One of the joys of the anthropological imagination is its unwillingness to accept an absolute consensus on how the world operates.”

While researching his dissertation—“Social Space, Political Process, and Community Identity in a Multi-Racial Philadelphia Neighborhood”—Nowak became keenly interested in blight. He was the kind of person who liked to think about big, thorny problems—at the Reinvestment Fund, he says, they joked about needing an organization called the Institute for Big Problems—and blight was one of the biggest and thorniest. Banks stayed away from blighted neighborhoods, convinced their loans would never be repaid; charities raised what little money they could and gave it away, with few visible results. This was the way the world operated; the consensus was that you couldn’t change it. But Nowak didn’t believe that. He believed that past blight-removal efforts had failed because they were run by “bleeding-heart liberals who were doing God’s work, but did not have the ethic of accountability,” as he would later tell the New York Times. What was needed was a new kind of institution on the border between charity and the private market: a businesslike institution with the civic spirit of the best charities.

This was the recipe for the Reinvestment Fund, which Nowak founded in 1985 with a $10,000 grant. “Our idea was that with technical help, regular people could organize money like a community organizer does with people,” he explained to the Inquirer in 1995. “The money could be the catalyst that makes things happen.” Nowak convinced churches and neighborhood groups to take money more seriously, and he convinced banks and big companies to take good works more seriously. He won grants from major philanthropies, including $15 million from the William Penn Foundation over a number of years. With the fund’s ever-expanding capital, Nowak financed the expansion of a Catholic school in North Philly, a launderette near Kensington, dozens of new supermarkets, and six new daycare centers, including one where 97 percent of the kids had mothers who were on welfare.

Even as Nowak built credentials as a banker, he remained an idealist at heart. Once, he bought a nuisance liquor store just to shut it down—and instead of selling the liquor license, which could have fetched $75,000, he publicly burned it, in “an act of creative citizenship” that “marked a high point in my life,” he would later recall. Judy Wicks, founder of the White Dog Café and doyenne of the local sustainable-food mo­vement, got to know Nowak around this time, and she trusted him so much that she took all her money out of the stock market and put it into the fund; today, she says, her portfolio has outperformed those of her friends. “He’s about social change and justice, and various progressive values that I believe in,” Wicks says of Nowak, “and he very much has his feet on the ground in terms of the practicality of making things happen. A lot of people are one or the other. They’re not both.”

Toward the end of the 2000s, as Nowak piled success upon success at the fund, momentum was building at the William Penn Foundation for a major change. In April 2009, Dow Chemical bought Rohm and Haas for more than $15 billion, generating a windfall for John C. Haas. Eight months later, he plowed $747 million into the foundation on the condition that it only be used for Philly-based projects. The endowment swelled from $1.2 billion to $2 billion in a flash.

An event like that will tend to get an organization thinking about its place in the universe. The board—comprised of five family members and six others—looked around. What were the other big Philly philanthropies doing? The Pew Charitable Trusts focused on national issues. The Annenberg Foundation had moved to Southern California. William Penn was the big dog.

For starters, this meant that the foundation required a new strategic plan; its existing one was almost 10 years old. And it needed someone to guide a new planning process.

When the board hired Nowak in the spring of 2011, it specifically cited his re­putation as a creative problem-solver. To Nowak, the job must have been irresistible. He’s basically a broker. At the Reinvestment Fund, he’d planted himself at the intersection of charity and the market, brokering deals between those two worlds. But he couldn’t always cajole people to meet him there. As the head of a $2 billion philanthropy, he wouldn’t even have to cajole; people would just come to him. Anyone in the city would return his call—any CEO, any politician, any entrepreneur. The foundation, if he played it right, could become the Institute for Big Problems.

Nowak began to travel around the city and meet with various groups. He says he tried to listen as much as possible. But he also did a lot of talking. He spoke about how Philadelphians need to talk less about what the city did first and more about what the city does best. He talked about how the city’s “legacy institutions”—the Free Library, the Zoo—can innovate successfully in a world of scarce resources and rapid technological change. He talked about how the city’s structure, chopped up as it is into neighborhoods and political districts, can make it difficult to convene people to solve hard problems. (“It’s very hard to garner the political capital of the whole,” he says. “So whenever you take the position of trying to speak toward the whole in a big way, you set yourself up to take some shots from the parts.”)

Meryl Levitz, president and CEO of the Greater Philadelphia Tourism Marketing Corporation, remembers being impressed with Nowak’s willingness to tell people things they might not want to hear. Nowak wondered, for instance, if our beloved museums were missing out on opportunities for collaboration and consolidation, citing the alliance of Drexel and the Academy of Natural Sciences. “GPTMC is entrepreneurial,” Levitz says. “We long ago adopted the mantra of Google culture. We feel we’re always in beta. I think what Jeremy was questioning was, are enough organizations in Philadelphia in beta? Are they willing to risk and change? And I think those are questions that Philadelphia has to ask.”

Last fall, after Nowak and the foundation board had worked together closely for a year, they concluded their strategic planning process. They identified three areas of focus: environmental stewardship, organized under the rubric of “watershed protection”; arts and culture (“creative communities”); and “closing the achievement gap” between kids in poor schools and kids in good ones. (In Philadelphia public schools, 43 percent of African-American males and 51 percent of Latino males drop out.) There was nothing particularly new about these priorities; all were longstanding passions of the Haas family and the board. What was new was Nowak’s strategy for pursuing them. A huge believer in the power of data—metrics, ya­rdsticks—Nowak said he would lay out, in early 2013, baseline data on all three areas of focus: “The idea is that we should say, ‘Here’s where we are, and here’s in 10 years where we need to be.’” He also wanted to create two new entities within the foundation: a Transformation Fund, to “help regionally important organizations better respond to market shifts,” and an Innovation Fund, “in service of finding and developing breakthrough ideas and solutions.”

Finally, having decided on three areas of focus, Nowak wanted to be fairly ruthless about excluding projects that fell outside of those areas. For instance, in the past few years, the foundation had invested in several civic journalism projects, such as “It’s Our Money,” a partnership between the Daily News and WHYY that tracked tax and budget issues. Nowak decided these would no longer be a priority.

I asked Nowak about the points of departure with the past: What else was he not going to fund? He said it was hard to say; you can’t determine what’s been left in the past when you still haven’t “said hello to the future.” Nowak added, “I have a father-in-law who says this old Yiddish expression. He’s in his late 80s; I assume it’s a Yiddish expression.” Nowak smiled. “Man plans, God laughs.”