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Upheaval at Heinz Endowments raises eyebrows

| Saturday, Oct. 19, 2013, 10:43 p.m.

Turmoil is mounting at The Heinz Endowments, the region's second-biggest foundation, with the resignation of its president and reports that the Heinz family's environmental center in Washington is on the brink of closure, members of the nonprofit community say.

Robert Vagt on Monday announced his resignation as president of The Heinz Endowments — the fourth key executive to leave this year. Jack Kime, vice president of finance and administration, retired in January, and Caren Glotfelty, senior director of the environmental program at Heinz, and Douglas L. Root, communications director, left in August.

Shake-ups of that magnitude raise eyebrows in the foundation community.

“When four senior-level managers all leave in the matter of months, you would be a fool not to wonder what was going on. Could it be coincidental? Sure, but unlikely,” said Laura Otten, executive director of The Nonprofit Center at La Salle University in Philadelphia.

Sources said this summer that Andre Heinz, son of the late Sen. H. John Heinz and a member of the Endowments board, is exerting control and engineered the departures of Glotfelty and Root when his mother, Teresa Heinz Kerry, became ill.

Andre Heinz and Teresa Heinz Kerry declined to comment, as did Vagt and several board members.

Sources told the Tribune-Review that the H. John Heinz III Center for Science, Economics and the Environment soon will close.

“You will not be surprised to know that I have no comment,” said President Conn Nugent. “That's the way it'll be for a while, at least. I'm allowed to say, ‘No comment.' ”

Heinz Kerry, through the Endowments, established the center in 1995 as a memorial to her late first husband with an initial grant of $20 million. The foundation has given the nonprofit center nearly $4.2 million since 2001.

The Heinz Center works with businesses, scientists, government agencies and nonprofit groups to find solutions to environmental problems.

Many in the nonprofit community, some of whom get Heinz funding, were hesitant to comment on the Endowments, which awarded nearly $900 million in grants — almost all to organizations in the Pittsburgh area — between 1997 and 2011.

Some said the changes stem from the Heinz family's dismay about news accounts last spring that questioned their commitment to the environment when the Endowments became a founding partner of the Center for Sustainable Shale Development, a joint-industry/environmental institute focused on standards for shale gas drilling. Some media accounts questioned Vagt's long-standing ties to the oil and gas industry.

Vagt's biography on the Endowments website notes that he spent a decade as an executive in the industry before becoming president of Davidson College in North Carolina.

“So how each of them came together — he with his industry background and the family and the board of directors with their environmental perspectives — in hindsight looks like the ultimate recipe for conflict,” said Robert Strauss, professor of economics and public policy at Carnegie Mellon University.

“It's a shame circumstances are such that he has chosen to leave,” said former Allegheny County Executive Jim Roddey.

“It could indicate that they're going to be more focused on the environment or it could simply mean that they were unhappy with the negative publicity that occurred from the many environmental organizations they support,” said Roddey, who serves on the boards of RiverQuest, where he is president, and The Pittsburgh Foundation.

Despite their focus on sustainable technologies and the environment, tax records show The Heinz Endowments holds investments worth $5.5 million in at least 12 oil and gas companies, including two that are active in shale gas drilling.

J. Kevin McMahon, president and CEO of the Pittsburgh Cultural Trust, and Grant Oliphant, president and CEO of The Pittsburgh Foundation, contend that Vagt's departure is not related to the grant to the Center for Sustainable Shale Development.

“This is in the normal order of things,” Oliphant said. “He's looking at a situation where they're about to embark on a new strategic planning phase, and he thinks, rightly, that should be done by somebody who's going to be around for a few years.”

Vagt, 66, who collected $455,348 plus $60,929 in benefits in 2011, is widely admired by his colleagues in the nonprofit community.

“Bobby is a very thoughtful and intense intellectual,” McMahon said.

No timetable has been announced for Vagt's departure, but experts agree his replacement is important because of the key role the Endowments has played in the region. The foundation and the Heinz family have helped transform a former red-light district in Downtown into a Cultural District.

The Heinz Endowments, with assets of about $1.5 billion, awarded $75 million last year in its five areas of interest: the arts and culture, children and families, education, community and economic development, and the environment.

Its largesse has helped support the construction of green buildings such as the David L. Lawrence Convention Center, educational reforms in Pittsburgh Public Schools and the transformation of blighted Hazelwood.

Experts wonder what's next for the Endowments as the next generation ascends to control.

“Anytime you have a change in leadership at the board and staff level, it's a natural time to revisit priorities. While tweaks and some refocusing are to be expected, I don't foresee any major changes in the five programmatic areas in which they've been focused over the long run,” said Fred Thieman, president of The Buhl Foundation.

Debra Erdley and Bill Zlatos are staff writers for Trib Total Media.

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