Drawn to Philanthropy

Janet Clarke McKinley ’76 used to manage billions of dollars on Wall Street. Now she’s investing what she learned—along with what she earned—in wealth-building programs, like microloans, to help lift the world’s poorest women out of poverty

by Laurie Bouck ’88

Janet Clarke McKinley ’76 remembers the first time she saw something as small as a $20 loan change a woman’s life.Janet McKinley
It happened about twenty years ago, when McKinley, then a successful mutual fund manager and longtime supporter of the antipoverty group Oxfam America, visited Vietnam with her colleague and future husband, George Miller. They were there to observe a new program that Oxfam was piloting to provide loans to women in impoverished communities. On their first morning, McKinley and Miller were met by a member of the Vietnam Women’s Union, and together they drove for hours through the countryside outside Hanoi to attend a meeting of about fifty women who had or would soon receive their first loan.
Most of the women, McKinley learned, were using the loans—ranging from $20 to $50—to fund projects such as pig farming and fish cultivation. The results had been remarkable. In many cases, women who had made just $2 a month were doubling their income in the first loan cycle, and in five years they had all crossed the poverty line. Their savings turned into new roofs, cement floors, and sometimes brand-new homes. Their old huts were now pens for pigs, or new shops.
What moved McKinley even more deeply, though, was the noticeable change in self-confidence and self-esteem among the women who had borrowed and repaid money.
The women who went to the front of the room to receive their first loans “weren’t even looking up; they were all scrunched over,” she says. They put the money in a hair clip and looked nervous as they retreated to their seats. By contrast, “the women who were paying back and getting new loans, they were running the meetings,” says McKinley.
“Two women got up and they were laughing, and they said, ‘We took a loan together, and we bought a baby water buffalo, and now we’re renting it out to the men for plowing!’” 
Before they left, McKinley and Miller asked the women if they had a message for Oxfam. “A woman got up and said, ‘Yes. The message is: Thank you, Oxfam, and make more loans,’” McKinley recalls.
Until that point, McKinley hadn’t heard the term “microfinance.” In many ways, this trip was a philanthropic awakening. If such a small amount of money could have such a dramatic impact on a woman’s life, she reasoned, then why not answer the call from these women and provide more loans? Since that moment, McKinley has become a deeply committed philanthropist and a leading voice in the worldwide fight against poverty. Almost immediately after returning from Vietnam, she and Miller worked with Oxfam to fund a multiyear microfinance program there, which is now a thriving microfinance bank. Eventually, she retired from the investment business to devote herself full-time to chairing the board of Oxfam (from 2004 to 2010) and using her own wealth to fund programs that she believes will have a direct and lasting impact on communities.
“I wish every philanthropist were more like Janet,” says Alex Counts, president and CEO of the Grameen Foundation, a nonprofit microfinance organization that McKinley also supports. “She is practical, rigorous, and respectful as a grant-maker, a true partner who masters the details but always keeps the big picture in mind.”
McKinley’s philosophy is simple: If they are given a small amount of capital, hard-working people, no matter where they’re from, will start businesses, form partnerships, and fuel innovation. As McKinley has seen, the dividends from such a small initial investment can be huge: Incomes grow, families are more secure, communities are stronger, and countries prosper. Women, in particular, become more empowered by owning property and playing a greater role in managing household income.
This idea of building people up with small loans is not new. For decades, organizations like ACCION International, Grameen Bank, and the Self Employed Women’s Association (SEWA) have been providing microcredit to poor people in rural communities in Bangladesh, India, Africa, and Latin America. Despite some bumps along the way—mostly related to high administrative costs and unpaid loans—microfinance has emerged as a viable tool in the fight against global poverty. In 2010, according to a New York Times article, the microfinance industry had assets of more than $60 billion. In that same year, according to a report by the Microcredit Summit Campaign, more than 200 million people worldwide received a microloan. The same report indicates that from 1999 to 2010 the number of the poorest women reached with a loan grew from about 10 million to 113 million.
The potential benefits of reaching that many people are impressive, but McKinley is realistic and knows, too, that microfinance is “no magic pill.” Poverty, she has learned, is a tremendously complex problem wrapped up in politics and power. Microfinance, she says, is just one way to chip away at it. Still, she supports microfinance and other long-term investments because, in her view, simple charity, as well intended as it may be, “doesn’t work particularly well for a lot of different reasons.” Even when an organization provides immediate support after an incident, such as a natural disaster, says McKinley, “you’d like to be giving your charitable donation to an organization that used the immediate disaster as a launching pad for making something better in the long term.”
What impresses her are programs like ones run by Oxfam and Grameen Foundation USA that address the roots of poverty through “gateway investments” that lead to other improvements in a community. To illustrate, McKinley recounts a trip she took to Adiha in northern Ethiopia, a desertlike region, to see the results of an Oxfam-funded irrigation system run by local residents, including women.
The project began when Oxfam worked with local organizations to establish a water users’ association, stipulating that women farmers, who often have poorer land in greater need of irrigation than men, were well represented in the association. “We worked with the community to design and construct the irrigation, and ten years later, you go to this place and it looks like the Garden of Eden,” McKinley says. “They put their produce out on the table—it all looked like it was on steroids. And there were lots of women farmers represented.”
The local government, impressed by the village’s agricultural success, added electricity and paved roads to help the village bring its goods to the market, rewarding this gateway investment with community-wide improvements.
McKinley traces her values and pragmatism to her Midwestern childhood. Her father, Gerald Clarke, was a marketer in the steel industry, and her mother, Nancy, managed the household until she had to find retail work in the local Halle Brothers department store to help support the family after her husband was laid off. Though money was tight, they encouraged McKinley and her three older brothers to get involved in local programs and activities that interested them. As civil rights supporters, her parents also wanted their children to get to know people from different backgrounds. Every week, for example, McKinley, a lifelong music lover, attended the Cleveland Music School Settlement, a community music school that served a diverse population. “The way they chose to introduce us all to music was deliberate,” says McKinley. Although her family lived in a primarily white, middle-class area outside Cleveland, her parents “did not want that to be our whole world.”
McKinley’s mother, in particular, always encouraged her only daughter to think big, urging her to “go to a good college and try everything, try anything you’re interested in because it might be the last shot you have to live that way.”
“This was a woman with such intellectual passions,” McKinley recalls. “I had a role model who said, ‘You can live your passions, but you have to pay the rent.’”
McKinley was drawn to Smith for its academic reputation and “fell in love with the campus,” she says. Recognizing her promise, Smith provided her with a financial aid package that included work/study, loans, and a scholarship. She sang in the choir and majored in history with a Russian minor. Joan Afferica, who is now the L. Clark Seelye Professor Emerita of History at Smith, proved to be a profound influence. “All of her classes were original-source driven, so she didn’t want to hear your synthesis of what other people had to say about things,” McKinley says. “She wanted to see your thought process at work, and she wanted it in four pages.”
What resonated with McKinley was Afferica’s research on the concept of power. In particular, she remembers Afferica’s study of the seating plans for dinners with the tzars to see how power shifted from year to year, based on where each guest sat. In a seminar with Afferica on eighteenth-century history, McKinley did her own research into the power structures of different countries—work that proved useful years later when she began analyzing the sources of poverty in the developing world. “You start to think about where does the power reside and where are the poor disadvantaged by where the power resides,” she says. “Poverty is not about people not having particular things; poverty is about not having power, not having access.”
After Smith and a Fulbright to Poland, McKinley returned to the States and went to work as a financial analyst at International Paper in New York City. She quickly realized, though, that her limited knowledge of finance was a problem. “I hadn’t even taken an econ class at Smith,” she says. So she enrolled in night classes at New York University Graduate School of Business. “I was literally learning things at night that I was using in the daytime,” she says.
In 1982, she was recruited by Capital Research and Management Company, a private money management firm, to work as their global paper and forest products analyst. What followed was an illustrious, two-decade-long career at Capital Research, including a stint as chair of the Income Fund of America that saw McKinley managing billions of dollars in mutual fund assets.
All the while, she was thinking about ways to use her own knowledge—and power—to make financial services more accessible to organizations devoted to helping the poor. On business trips abroad, McKinley took extra vacation days to explore nearby developing countries, and she was shaken by what she saw. “Once I was directly exposed to the challenges faced by vulnerable communities—particularly women—and how hard they work to give their children a better life, I couldn’t look the other way,” says McKinley. “Seeing how brutal the lives of poor women can be, and how unjust, I made a commitment to do what I could to change this.”
When Oxfam America approached her to chair its board following her retirement from Capital Research in 2004, she was ready for a new challenge, and the idea of trying to find solutions to the problem of global poverty fit perfectly with her personal goals.
At Oxfam, she brought her financial acumen to bear as she led the group’s first major multiyear fundraising campaign, helping Oxfam raise more than $63 million, far exceeding the group’s $50 million goal.
As board chair, McKinley encouraged better accountability for how donor funds were used and how effective each investment ultimately was. “Donor money is finite, and the problems facing the world’s most vulnerable people are virtually infinite,” McKinley says, “so we have a responsibility to put donor money to work as effectively as possible.” She also supported a private sector group created by Oxfam America that tapped businesses to work with the organization to solve problems in the developing world. One such success was a crop insurance product for Ethiopian farmers supported by the insurance risk management company Swiss Re.
Raymond Offenheiser, president of Oxfam America, praised McKinley’s strong investment management skills as well as her personal commitment to supporting the organization and encouraging other board members to do the same. “She walked the talk and modeled what she believed in terms of philanthropic practice,” he says.
Her philanthropy didn’t end at Oxfam. Remembering how generous Smith was in providing her with financial aid, she felt responsible for giving current students the same opportunities. In 2003, she joined the college’s board of trustees, serving until 2010, and made a significant gift to the Smith Community Scholars program that ultimately made it possible for dozens of young women attending community colleges to transfer to Smith to receive their bachelor’s degrees.
Anita Volz Wien ’62 served with McKinley on the investment committee of Smith’s board of trustees and remembers both her financial skills and her passion. “She always zeroed in on the critical issue that was being discussed,” Wien says. “She brought her very deep experience to bear in helping to make decisions regarding the portfolio and how the portfolio should be structured.”
“She is the type of person who commands the respect of her peers,” Wien notes, “and has an ability to blend both a good mind and a warm personality.”
Today, McKinley, who has two grown sons, is settled in the San Francisco area, but her focus continues to be on communities overseas. She’s looking at ways to bring commercial and nonprofit groups together to develop innovative financial and technology-related programs that address the needs of vulnerable communities, “particularly,” she says, “as they struggle to adapt to climate change.”
Closer to home, she has turned her attention to education, believing deeply that it is a path to a better life, especially for children from disadvantaged backgrounds. She and her husband support a Knowledge Is Power Program (KIPP) charter middle school in an underserved area of San Francisco, and they fund scholarships to the University of California, Berkeley, just across the Bay. Mindful of the harm the recession has inflicted on many families, McKinley recently made a major multiyear commitment to Smith to support students from struggling middle-income families.
That McKinley remains so deeply committed to these causes doesn’t surprise anyone who knows her. “Her heart is always trying to make a difference in the world and help people out there who need it in smart ways,” says Stephanie Kurzina, vice president for development and communications at Oxfam America. “And she is always, always thinking about new and creative ways to do it.”

Fall 2012 SAQ
Laurie Bouck ’88, a freelance writer based in San Francisco, writes about public health at med-fly.blogspot.com.