In 1986, Alan Barnhart was 25 and planning to go into business with his brother. An evangelical Christian, he wondered what Scripture had to say about the profits he hoped to make. So he combed the Bible for whatever advice it had to offer about money. That’s when he came across verses like this:
“The love of money is a root of all kinds of evil…”
“Do not lay up for yourselves treasures on earth…”
“It is hard for a rich man to enter the kingdom of heaven…”
No matter where he turned, it seemed to him that Scripture was sending a very clear warning: Money can be dangerous.
“I read all these verses, and I thought: ‘I want to be good in business, and I’m competitive,’” Barnhart says. “But I didn’t want to make a lot of money if doing so would damage my life. And I could see where it really could.”
So Alan and his brother Eric decided to do something unusual: They vowed to cap their income, earning no more than the middle-class members of their Memphis, Tennessee, Sunday school class did, and give much of their company’s profits to charity. In their first year of business, they gave away $50,000—more than Alan’s salary.
Now, nearly 30 years later, the results are even more tremendous: The Barnharts oversee a $250 million crane and rigging company, and they’ve donated nearly $100 million of its profits to charity. Moreover, in 2007 they decided to go even further. They gave the entire company away. Though they still run its daily operations, the National Christian Foundation (NCF) now owns Barnhart Crane & Rigging. The brothers will never reap its accrued value; they kept none of it.
“That’s one of the things that make Alan and Eric so rare: they decided to give it all away,” says NCF president David Wills. “That was their wealth. They didn’t have three other companies. That was it.”
Alan Barnhart is a modest man, with a soft Tennessee drawl. He wears jeans and cotton oxfords to work. He started giving interviews about his philanthropy only after others convinced him to do so.
“‘Don’t let the left hand know what the right hand is doing.’ For the first 15 years that was our thinking,” Barnhart says. But “people challenged us, [saying] what’s happened to your company is pretty unusual…. God has done amazing things through your company, and you need to tell people all that you’ve done with what God’s done.”
He is quick to emphasize that his salary cap was not a vow of poverty. “We have vehicles and air conditioning. It was not a Mother Teresa lifestyle.”
To make sure they stuck to their limit, the Barnharts told their associates at the company about their income pledge, enlisting others to hold them to their promise. He and his brother allowed themselves cost-of-living adjustments, and salary increases when children were born. Alan has six children; Eric has five. Alan and his wife Katherine are the Barnhart family spokespeople, while Eric is the brainy, quiet engineer, friends say.
One of the best things about their lifestyle choice, Alan says, is that his children did not grow up wealthy. “There’s great benefits to a kid to hear the word ‘no,’ and the theology of the Rolling Stones: ‘You don’t always get what you want,’” he says. The Barnhart kids didn’t get trips to Disney World, or even treats at the grocery store. Instead their parents took them to developing countries to see the wells, churches, and farms their gifts had enabled. “It wasn’t about things. It wasn’t about money. It wasn’t about wanting. I taught them the joy of giving early. I taught them the joy of contentment,” Katherine says.
And the Barnharts taught their children about God. They speak of Him often. “It is God who has led us in this, and it is He who multiplied us,” states Katherine. Though donors of many religious—and non-religious—backgrounds give generously, and interpretations of Scripture’s teaching on wealth differ, the Barnharts stand out in their willingness to act on what they believe God has called them to.
Profit with a purpose
Using business skills to serve God through “constructive work” and “ministry funding” is at the heart of the purpose statement posted on the Barnharts’ company website. The brothers’ attempt to directly harness capitalist plentitude to do spiritual work is further explained in one of the company’s “core values,” which proclaims: “Profit with a Purpose—We will attempt to make a profit and will invest the profit to expand the company and to meet the needs of people (physically, mentally, spiritually).”
In practice, about 50 percent of all company earnings are donated immediately to charity. The other 50 percent are used to grow the business. The firm has been run that way since the beginning.
And the Barnharts don’t even allow themselves the luxury of choosing where their company’s gifts should go. A group of 55 employees and spouses decides where to distribute half of the money made every year by Barnhart Crane & Rigging. Each employee in the group—which is dubbed GROVE, God’s Resources Operating Very Effectively—develops a relationship with one or two grant recipients, researching their effectiveness and vetting their requests. Under NCF ownership the group will continue to give away company earnings.
Alan and Eric did something unusual: They vowed to cap their income, earning no more than the middle-class members of their Sunday school class did, and give much of their profits to charity.
Katherine says the group actively searches for the best people addressing a problem, rather than giving money only to groups with powerful fundraising arms. GROVE volunteers take small grant requests to a six-member committee for approval; requests for more than $100,000 go before a 12-member board that meets quarterly. Most of the donations boost international development and Christian ministry in Africa, the Middle East, India, and southeast Asia, where the group sees needs larger than those at home. “That’s where God is really working,” says Joye Allen, GROVE administrator. The group focuses its giving on five causes: Christian evangelism, church planting, Christian discipleship, leadership training, and ministering to the poor.
GROVE’s biggest grants—millions of dollars’ worth—have gone to Hope International, which provides microfinance in the developing world; the Seed Company, a Bible translation group; and Strategic Resources Group, an umbrella organization for Christian ministries in the Middle East. Though the bulk of its giving is overseas, the group has also given domestically, to places like Repairing the Breach, which works with youth in rundown Memphis neighborhoods, and Citizens for Community Values, which helps women escape the sex trade.
The profits headed toward charity are not funneled through a corporate foundation or invested for future giving. The Barnharts want to put their dollars to work for God right away. “We want to get the money and invest it in other people as quickly as possible. We see a higher return in investments in people than we do in investment instruments,” Alan says.
Giving it all away
The Barnhart brothers had given away millions in annual profits when, in 2006, they approached Wills with a big question: How do we give away our entire company? Many successful businessmen leave their private companies to their foundations when they die, but doing so while still living is unusual, even in the philanthropic world. So National Christian Foundation staff got to work on figuring out how to accomplish what the Barnharts requested.
In 2007, the Barnharts got what they wanted: They put 99 percent of their business ownership interests, in the form of non-voting stock, into a charitable trust under the National Christian Foundation. In 2012 they gave the remaining 1 percent to a second charitable trust that gives NCF the beneficial interest and ultimate ownership but allows the family to retain operating control by serving as trustee. NCF sought, and received, special approval from the IRS for the arrangement.
Wills credits the Barnharts’ deep convictions for the unusual gift. “They actually don’t believe that they own their company anyway. It wasn’t theirs; it was God’s. They were just taking care of it for him,” Wills says. “When they gave away their company, it didn’t change their life at all, Alan will say. It significantly changed their balance sheet, but it didn’t change their lives.”
The Barnharts are not alone in giving away their source of income. The National Christian Foundation has developed a specialty in working with entrepreneurs who want to donate businesses, parts of businesses, or other assets—which helps account for the foundation’s explosive growth. NCF grew from a two-person operation three decades ago to the 19th biggest American recipient of private gifts, topping Harvard, Yale, and the American Heart Association in 2012. The foundation has received about $1 billion worth of companies since it started facilitating that type of giving in 2002, Wills says.
NCF isn’t the only foundation that is channeling entrepreneurial gifts to charity. The Greater Houston Community Foundation owns about 12 percent of local businessman Leo Linbeck III’s construction, real estate, health care, and education firm, Aquinas Companies, which earns $500 million in annual revenues. The plan, Linbeck says, is to transfer more and more of the company to a supporting organization of the foundation. By the time he dies, if not before, he wants the foundation to own it all, though the Linbeck family will still steer the firm and run its day-to-day operations.
For Linbeck, the choice to give away his company came down to one principle: stewardship. He wanted to work to benefit others, and did not want his family to feel entitled to wealth. Yet he thought a for-profit business was the best way to help people. “From an overall societal benefit standpoint, there’s a whole lot more benefit that comes out of for-profit businesses than philanthropic contributions,” he says.
In addition to gradually shifting the ownership of Aquinas to the community foundation, Linbeck also funnels 10 percent of its annual profits to GHCF, reinvesting the other 90 percent in business operations. Linbeck, a devout Catholic, calls that a tithe. His idea of stewardship, he says, emerges from a Catholic worldview in which wealth and work should be dedicated to human relationships more than to personal consumption. Yet he is matter-of-fact about his generosity. “There are not that many branches in the decision tree,” he says. “When you’ve got enough to consume, and you’re satisfied, and you don’t want to consume anymore, you’ve got to do something with it.”
For both Linbeck and the Barnharts, giving is inspired by deeply rooted spiritual beliefs. “Giving feeds our soul,” says Katherine Barnhart. “Giving has us looking outward. It requires something of who you are. We are giving in order to serve the God that we love.”
Liz Essley Whyte is managing editor of Philanthropy.