Soros Son’s New Shakeup Puts $25 Billion Philanthropy on Hold

George Soros’ $25 billion charity is on the cusp of a transformation that will reshape its operations, slash its staff and test whether his son Alex is ready to head one of the world’s biggest and most influential philanthropies.

(Bloomberg) — George Soros’ $25 billion charity is on the cusp of a transformation that will reshape its operations, slash its staff and test whether his son Alex is ready to head one of the world’s biggest and most influential philanthropies.

Alex, who was named official successor to his billionaire father at the Open Society Foundations in June, has revealed only a few details of the overhaul, which will include a five-month freeze on new donations starting in October and a minimum 40% staff cut. The organization, which has enlisted consulting firm Deloitte to help with the redesign, will emphasize urgency and outcomes, said President Mark Malloch-Brown by phone, without divulging much detail on which causes will get its cash.

The changes follow a previous attempt at restructuring that cut OSF’s headcount by about half and disrupted its work, said two people familiar with the matter. In 2021, OSF had nearly 1,700 people on payroll, and after the latest changes, the tally will be fewer than 500.

OSF hands out more than $1 billion a year through its network of foundations on five continents, so any hint of what Alex and Malloch-Brown will do, or stop doing, sends ripples around the globe for causes ranging from social justice to democracy. Given the lack of details so far and Alex’s relative inexperience, the 37-year-old scion faces some skepticism about where he’s taking the sprawling enterprise that his 93-year-old father built for decades into one of the biggest donors to promote democracy and human rights around the globe.  

“It’s fair to say that he’s pretty untested when it comes to leading this very large philanthropic effort,” said Elizabeth Dale, director of nonprofit leadership at Seattle University. “Losing 40% of staff, you’re going to be losing a lot of institutional knowledge and expertise.”

Malloch-Brown said Alex, who wasn’t made available for comment, is more than qualified for his role, which he describes as “family chair.” “He’s not had the background to be in a senior executive role, but he’s steeped in the lore of the foundation,” Malloch-Brown, 70, said by phone.

The new upheaval was foreshadowed by Alex back in February during an organization-wide call, his first since he formally became chair of the foundations in December 2022. “For years, my father did not like the direction OSF was headed,” Alex told the staff, according to transcripts reviewed by Bloomberg. “He does not want OSF to emulate what he sees as a stale and hollow world of institutional philanthropy.” 

So far, the transformation has been described in broad strokes about structure and operations, and with new titles for committees and managers. Criteria for specific causes and grants are still to come. Malloch-Brown and Soros dubbed their new approach “strategic opportunism” to address “urgent and emerging challenges,” which Malloch-Brown described in the interview as “democracy in retreat, human rights in retreat.”

The goal, Malloch-Brown said, is to get “nimble.” It also means shifting bureaucratic work from the front end of grants — due diligence before gifts are made — to the back end for research into what impact the grants have had, he said.

For now, with the pause on donations and potential staff cuts fast approaching, some OSF staffers have been rushing to get gifts out the door, two people familiar with the matter said. Mark Arena, OSF’s spokesperson, said the charity will honor existing commitments and that the pause is a “short extension of our typical cycle (which includes an annual pause).” 

The normal pause allows time to find and vet new recipients, but that’s impossible to do without knowing who will still be there or what “opportunities” OSF will pursue, said one of the people, who asked for anonymity to discuss their powerful employer.

The change of direction comes at a vulnerable time for OSF, according to half a dozen current and former employees, because it’s still dealing with the after-effects of the previous attempt at restructuring. In January 2021, Malloch-Brown, who was new to the job, inherited a plan to restructure with the help of philanthropic consultant Bridgespan. He gave everyone the option to take a voluntary separation package, and hundreds did, followed by more involuntary separations, according to people familiar with the matter. 

“The transformations to date, though necessary, have not gone far enough,” Malloch-Brown told the staff this past June in an email, which announced the latest round of cuts.

It wasn’t originally supposed to play out like this. For years, the elder Soros’ plan was to close the foundation on his 80th birthday. Even after the hedge fund billionaire changed his mind, people at the foundations expected Jonathan, the second-eldest son from Soros’ first marriage, to eventually take over, three people said. But as the years went on and George remained in charge, Jonathan moved on to run his own investment firm. 

Alex is one of Soros’ five kids, born the year after the inception of George’s first foundation in Hungary. Initially he was better known for making the rounds in Manhattan and Hamptons social circles, rather than in philanthropy. 

He’s since worked to bolster his credentials, starting his own charitable foundation in 2012 that supported domestic workers and environmental activists (it’s been effectively dormant for five years, according to the spokesperson). In the early 2010’s he started shadowing his father at OSF, according to three people familiar with the matter, and earned a history Ph.D. in 2018 from University of California, Berkeley.

Alex has traveled the world with George for years learning the business, and even worked at OSF’s mail room, Malloch-Brown said. “He’s a real protector of his father’s vision and that of the family.” The key piece of that vision is to be “non-institutional, non-bureaucratic,” he said, pointing out that OSF has one of the largest staffs of any foundation in the world.

As Alex pivoted to more serious pursuits, the cameos on his Instagram have included fewer socialites and more world leaders: Alex with Joe Biden and Kamala Harris, shaking hands with Bill Clinton, smiles, drinks and embraces with Chuck Schumer, Justin Trudeau, Raphael Warnock, Pete Buttigieg and Emmanuel Macron. 

He’s also inheriting the darker side of the role. Last year, Alex became president of Soros’ Democracy PAC, which spends heavily to support liberal candidates and causes in US elections. Alex told the Wall Street Journal he’s more political than his father, who has long been a target of right-wing critics demonizing him with conspiracy theories and antisemitic tropes. Egged on by Donald Trump, they’ve already begun turning their fire on Alex.

Whatever emerges from his plan, Alex’s announcement of the transformation affirmed OSF’s commitment to “democracy, human rights, climate justice, and addressing inequity.” And he acknowledged it will be bumpy. 

“I know you all work hard each and every day to serve OSF and its mission,” he told the staff on an OSF-wide call in June when he introduced his plan and Malloch-Brown announced the layoffs. “These changes obviously bring consequences and will be disruptive to everyone.”

–With assistance from Sheridan Prasso.

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