April 14, 2013

Alumni Spotlight: Interview with Jim McDonough, Executive Director of Alphawood Foundation

Our former partner Jim McDonough joined Alphawood Foundation in June of 2012 as the Foundation’s Executive Director after serving in various legal and senior management roles at the Chicago Sun-Times and its parent company since 2005.  Prior to joining the Sun-Times, Jim spent 20 years at the firm.

Q:  Can you tell us a little about the Alphawood Foundation?
A:  Alphawood Foundation is a Chicago-based private foundation that awards grants primarily in the areas of advocacy, architecture and preservation, the arts and arts education, domestic violence prevention, the environment, protection of the rights of LGBT citizens and people living with HIV/AIDS, and other human and civil rights.  It was initially founded as the charitable foundation for a local Chicago television station owned by Fred Eychaner.  In 2003, when the station was sold to Rupert Murdoch, a large portion of the proceeds of the sale went into the Foundation, which then became independent and changed its name to Alphawood.  At present, the Foundation holds about $160 million.  Fred once told me that he would have named the foundation “Anonymous” if he could have, but his lawyers objected.

Q:  What does the job of Executive Director entail? 
A:  In general, I manage the Foundation’s staff and its portfolio of grantees.  A lot of our back office functions, such as payroll and investment management, are outsourced through an arms-length relationship with Fred Eychaner’s company, Newsweb.  We only have four people on our staff.  I also act as general counsel of the Foundation.  Being a lawyer has always been helpful and informs my work.  On a day-to-day basis, however, I’m generally not practicing law.

Q:  What has been your biggest challenge in this role? 
A:  The initial challenge in the first few months of the job was just taking stock of the 200-plus organizations that we support.  Then, I needed to turn my attention to our pipeline—all of the possible new grantees.  We don’t accept unsolicited grant applications; you must be invited to make a pitch to us.  This eliminates the enormous amount of work that would be required to sift through “over the transom” requests for support.  But, it also means that we need constantly to be on the lookout for new and innovative groups and causes that we want to support in the future.  Our Board is also looking at some larger capital projects, so we need to strike a balance between big, one-off gifts and continuing smaller grants.

Also, as part of taking stock of who are, I made a commitment to our Board of Directors early on in my tenure that we would meet personally with all of our grantees this year.  That was a big undertaking.  We presently have between 215-230 grantees.  Most of those are in and around Chicago, but a few are out of town.  In any event, meeting with all of them is going to be challenging.

Q:  What made you decide to take on your current role? 
A:  In the course of the seven and a half years that I was at the Sun-Times, almost anything that you can imagine could happen to a company happened to us.  I joined the Sun-Times after serving for several years as outside counsel to the Audit Committee of the parent company’s board.  This was during the time when the former management group led by Conrad Black was thrown out.  What followed was a real struggle for control of the Company by various shareholder groups.  At the same time, the U.S. newspaper business fell off a cliff.  In the midst of all of this, we had a really contentious proxy fight, we faced a huge amount of litigation, we conducted some really interesting internal investigations, and we took the company through bankruptcy.  As a result of the bankruptcy, we were able to sell the business to a group of local investors led by Jim Tyree, who was chairman of Mesirow Financial.  Less than two years after we sold the company, Jim passed away suddenly and unexpectedly.  We had a little bit of internal tumult around that time.  Then, another investment group came together and made an unsolicited offer for the company and we sold it again in December of 2011.  After the second sale, I decided enough was enough. 

I had planned to take the summer off and take some time to relax and figure out what I wanted to do with the rest of my life.  I’ve known Fred Eychaner for years.  He and I were having dinner one night in February of 2012 and I told him what I was thinking about.  What I didn’t know was that at the same time he was looking for a new executive director for the Foundation.  Three weeks later we shook hands and I accepted the job.

Q:  How did the firm contribute to or impact your career?
A:  Prior to joining the Sun-Times, I spent 20 years working at Gardner Carton & Douglas.  I spent the summer after my second year of law school clerking at Gardner Carton and I never worked at another firm.  It may sound overly dramatic to say that everything I know about being a lawyer I learned at Gardner Carton, but that’s true.  Many of the skills and lessons that proved invaluable to me as an in-house lawyer were things that I learned being outside general counsel to companies while at Gardner Carton.  And, I’m talking not just about what I learned at the firm about being a lawyer but also about being a member of senior management.

Q:  Did you have any mentors at the firm? 
A:  Yes.  I worked a lot with Bob Wilczek for Pacific Dunlop, which was a very large client of the firm.  In fact, at the time it may have been the firm’s largest client.  I also worked a lot with Steve Gatlin who passed away, now probably 15 or 17 years ago.  Both Bob and Steve taught me a great deal about M&A and the process of negotiating and drafting deal documents.  There are countless others who helped me over the years, but my principal mentor was Bob.

Q:  Do you have any advice for others interested in following a career path similar to yours? 
A:  Work on your ability to communicate and write clearly.  Being able to write, speak and advise a client in a clear way is really important in the corporate world.  The other thing that some corporate lawyers lack is an understanding of litigation.  I say that as somebody who had absolutely no interest in litigating while at the firm.  I’ve come to realize that much of what you do in-house is either preparing for or trying to avoid litigation.  Knowing how litigation works can be a huge tactical and strategic advantage.  It will make you a better advisor to your board of directors and your CEO.

Q:  You have always been very involved with various non-profit organizations.  Can you tell us about your experiences? 
A:  I served as the Chair of the Board of Trustees of the Sun-Times Charity Trust for a number of years.  I’ve also been involved in national LGBT matters and was previously on the national board of Lambda Legal.  Over the years I’ve also been involved in other progressive causes and local charities.  The non-profit and charitable experiences I had before coming to Alphawood really help me in my current role.  Because of this background, I bring what I think is an informed point of view to the work we do at Alphawood.

Q:  What do you enjoy doing in your spare time?
A:  One of the things I really enjoy about living in Chicago is the vibrant arts scene here.  I see a lot more of this now because Alphawood is a big supporter of the local arts scene.  For example, we’re very involved in the Chicago dance community.  We’re the largest individual funder of the Joffrey Ballet.  In addition to things that have interested me over time, principally the theater, I’m now learning about and getting to enjoy dance and other art forms.

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