Heinz Endowments president's departure leaves leadership void

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The selection of a top executive to run the Heinz Endowments may come down to whether Heinz family board members are more comfortable with an independent thinker to drive the organization's grant-making strategy, or a leader to essentially carry out their wishes -- no questions asked.

Robert Vagt, president of the city's second-largest foundation, is leaving his post Jan. 24 and later this year plans to become chairman of the board at Rice Energy Inc., a Canonsburg-based drilling company.

The news that Mr. Vagt will depart next week was not unexpected; he disclosed in October that he planned to step down from his job following upheaval at the endowments that focused on its involvement in creating the Center for Sustainable Shale Development, a nonprofit that supports best practices in the shale gas drilling industry.

Last summer, the endowments came under fire from environmentalists who said Mr. Vagt's ties with the gas and drilling industries put the center in conflict with the Heinz family's historic support of environmental causes. In the wake of the controversy, two longtime members of the endowments' staff were dismissed abruptly and many observers believed it would be only a matter of time before Mr. Vagt left as well.

Mr. Vagt declined to comment Tuesday about his departure and his plans.

Though Mr. Vagt didn't specify in October why he was stepping down -- except to say he was turning 67 which "seemed to be an appropriate time" -- many observers believe the conflict over his support of the center, the staff shakeup and his ties to the gas and drilling industry were among the factors that informed his decision to leave.

A search is "in process" for a new leader at the endowments, said Carmen Lee, a spokeswoman. Until a new president is in place, members of the endowments' senior staff will work with a special committee of board members to manage day-to-day activities, she said.

The foundation, which has assets of more than $1 billion and ranks among the top 50 largest foundations in the U.S., distributes an average $60 million in grants annually to nonprofit causes that benefit the arts, education, the environment, children and families, and community or economic development initiatives.

Though observers in the local foundation sector expect a search firm to be involved in the hunt, Heinz family involvement is likely to loom large in the search for Mr. Vagt's successor: five of 14 active board directors at the endowments are members of the family that made its fortune from the H.J. Heinz Co. global food empire.

They are Teresa Heinz Kerry, the endowments' chair who is the widow of U.S. Sen. John Heinz and married to U.S. Secretary of State John Kerry; her three sons, H. John Heinz IV, Andre Heinz and Christopher Heinz; and Christopher's wife, Sasha Heinz. Another family member, Drue Heinz, is director emeritus.

When a family foundation has a number of family members actively involved on the board, selection of a new leader "is a clear opportunity to be sure that they set down the markers of hiring someone who shares their priorities and values and their approach," said Diana Aviv, president and chief executive of the Independent Sector, a Washington, D.C.-based coalition for philanthropies and nonprofits.

She declined to comment specifically on events at the Heinz Endowments but said choosing leaders for family foundations "can be very complicated" if family board members "bring friends to the table." If that happens, "It becomes incumbent upon the search firm to talk through carefully whether that person has the qualities" that the whole board can agree on, said Ms. Aviv.

Probably the most critical factor in the selection process, she said, is how much power family board members want to instill in the person who runs the organization day-to-day.

In an October interview with the Post-Gazette after Mr. Vagt confirmed he planned to leave the endowments, Mrs. Heinz Kerry declined to link his exit directly to the controversy involving the shale development center.

She acknowledged that while she and other family members who are strong environmentalists wished to collaborate with the energy industry on responsible drilling in the Marcellus Shale, they didn't authorize creation of the center, which Mr. Vagt helped to spearhead and which includes gas industry members Chevron, EQT, Consol and Shell.

She said that perhaps she was not totally aware of events involving the center when she was hospitalized in Boston last summer after suffering seizures. Observers believe Andre Heinz may have assumed control of foundation affairs when she was ill and was involved in firing staff members involved in the shale center flap.

When Asked about Mr. Vagt, Mrs. Heinz Kerry called him "a wonderful, nice man" but said top executives at the endowments "can't take this job for a long time ... it's demanding."

According to an endowments' filing with the Internal Revenue Service, Mr. Vagt earned $477,167 in compensation in 2012.

Mr. Vagt came to the endowments in 2008 after serving for a decade as president of Davidson College in North Carolina, which is also his alma mater. Prior to that, he spent nearly two decades working for oil and gas companies in New York and Texas. He will join Rice after the company completes its initial public offering. In a filing with the Securities and Exchange Commission, the company said he will receive 12,500 shares of its stock. Rice conducts drilling in the Marcellus and Utica shale regions of Pennsylvania and Ohio.

One local name that has surfaced as a possible successor to Mr. Vagt is Grant Oliphant, president and chief executive of the Pittsburgh Foundation. Mr. Oliphant has a close relationship with Mrs. Heinz Kerry and her sons going back to his years as a staffer for Sen. Heinz and as a vice president at the endowments.

Though Mr. Oliphant was widely expected to be tapped to lead the Heinz Endowments when former president Maxwell King left in 2007, he was passed over for Mr. Vagt and subsequently took the job at the Pittsburgh Foundation. Mr. Oliphant declined to comment.

Joyce Gannon: jgannon@post-gazette.com or 412-263-1580.

Joyce Gannon: jgannon@post-gazette.com or 412-263-1580. First Published January 14, 2014 3:55 PM

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