Last August when Ted Turner threatened to create an “Ebenezer Scrooge” award for “skinflint billionaires” it is a safe bet that he was not thinking of financial media maven Michael R. Bloomberg, who pledged $55 million between 1995 and 1998 to Johns Hopkins University (where he is chairman of the board) and who supports numerous other philanthropic causes (from New York’s Jewish Museum to the U.S. Chamber of Commerce).
Part-owner of a privately held company worth an estimated $4 billion (1996 revenues $750 million), the Boston native provides the ubiquitous (to traders) Bloomberg terminals, some 82,000 of which provide analytical and news services to investment and securities firms across the country. His eponymous financial news service is disseminated to more than 800 newspapers and 225 radio stations worldwide.
Bloomberg also contributes to Harvard, where his $3 million gift has established a rotating chair “to study and research philanthropic policies and practices.” Every two years, the chair passes between the college, the divinity school, the law school, the Kennedy School, and the business school (where, in 1966, Bloomberg received his MBA). Philanthropy caught up with him at his office at 499 Park Avenue.
PHILANTHROPY: When did you first become involved in philanthropy?
MR. BLOOMBERG: I remember that as a kid my parents always gave money. They had their favorite causes to which they would give $25 or $50. They didn’t have much money, but they supported the local PTA, the local Temple, and the Red Cross. As kids we always collected money, sold wreaths for the boy scouts, and that sort of thing.
PHILANTHROPY: It is interesting that you explain your support for philanthropy in terms of your youthful involvement in civic associations. In your book [Bloomberg by Bloomberg, John Wiley & Sons, 1997] you also mention visiting fire stations as a cub scout, and that you now support the New York City Police and Fire Widows’ and Children’s Benefit Fund as a result of that early experience. It seems to some that people are becoming increasingly divorced from civil society. Are you afraid that kids growing up today may not benefit from the same impetus that drove you to give something back?
MR. BLOOMBERG: Well, I’m concerned, but I’m not sure that there’s any evidence that kids today are any different. It’s very easy to say that people are less generous than they used to be, but the fact is, there’s more money being given away than before.
PHILANTHROPY: Like Ted Turner, you have described American millionaires who don’t give much money to charity as “skinflints.” Do you have any advice for a Bill Gates or a T.J. Rogers who says that it’s difficult to give money away effectively. What do you say to someone who says: I’m working eighteen hours a day and I just don’t have time to do it?
MR. BLOOMBERG: I’ve heard a lot of excuses as to why people don’t give money away, but the “I don’t have time” excuse is the most preposterous thing I’ve ever heard. All you have got to do is write a check and hire somebody. There are plenty of very competent people that could take over that burden for you, and if you run a big company you know how to delegate or else you wouldn’t survive for very long.
PHILANTHROPY: Some people say that a major obstacle to serious giving by people of means is the barrage of requests that are generated by the publicity attendant to a major gift. Have you had a problem with people-friends or strangers-calling on you to solicit assistance?
MR. BLOOMBERG: In terms of friends, if I call you and ask you to give some money to my favorite charity I don’t think it’s very fair for me to complain when you reciprocate. In terms of unsolicited requests coming from strangers, giving publicly gets you on the junk mail lists of thousands of organizations that you’ve never heard of. But you’re also on the junk mail lists of thousands of catalogs from companies you’ve never heard of. You throw them in the wastebasket. This isn’t any reason to change your lifestyle or do anything differently.
I remember the first time I was on the Forbes 400 list. I tried to talk them out of having me on the list. We checked to see when [the issue] was going to come out. They hired a bodyguard for me. We thought the phones would be ringing off the hook with accountants and investment advisors and lawyers and insurance agents. The first year I think I got one call. The next year I don’t think I got any. Fortunately, it also turns out that kidnappers and muggers tend not to read Forbes. They probably don’t read Philanthropy either.
PHILANTHROPY: You have given tens of millions of dollars to charity, but you have also given your own time, including spending one day a week in Baltimore at Johns Hopkins University. How important do you think it is for donors to get personally involved in the projects they fund?
MR. BLOOMBERG: From the recipient’s point of view, there is one very practical reason to get the donors involved-these are people with money who are generous and who like the organization, and the more you can convince them to like the organization, every one of them has some more money to contribute down the road.
I think organizations have to be careful that the donor might set some terms on their involvement that the recipient doesn’t find acceptable. That’s something you have to work out in advance. Of course, you don’t have to give the money, and they don’t have to take it. A friend of mine gave some money to Harvard. I understand some of the professors are screaming that he is trying to get involved in the selection of the professor to fill the chair. The truth of it is, they didn’t have to take the money. By the way, this person has given an enormous amount to Harvard, and will give again.
PHILANTHROPY: You have written that you don’t want to cut your daughters out of your inheritance, but that you want to give in a way that does not end up hurting them. For instance, you talk about parceling out your bequest in small amounts.
MR. BLOOMBERG: I have watched a lot of people be destroyed by somebody leaving them great wealth, and I think that had the benefactors realized what was going to happen, they would have been heartsick. You watch these families ripped apart between the fights over “what’s mine” and “what’s yours” and, meanwhile, the kids lose all incentive to be nice human beings and to make a contribution to society. You can’t run your family from the grave, but you can be very very careful with how you structure your bequests.
PHILANTHROPY: You have talked about setting up a charitable trust, to be run by your survivors. Do you have any plans to set up a foundation during your lifetime?
MR. BLOOMBERG: I will do that. I’m planning to set one up so that my kids can learn about philanthropy with small amounts of money. Keep in mind that my oldest girl has just entered college, so she’s just old enough to think about this. My fourteen year old would prefer watching Beverly Hills 90210, she’d rather play soccer, she’d rather do anything than talk about philanthropy. And if she did want to talk about philanthropy I’d tell her to get a life.
PHILANTHROPY: Why set up a foundation?
MR. BLOOMBERG: Well, at the moment, I take money out and I give it away by the end of the year. I make sure I don’t have anything left. The reason to set up a foundation now is I’d like to get the structure down so that on my death we don’t have to worry about it—but also to give my kids some experience. I can tell my oldest daughter: “Here’s ten grand: what are you going to do with it?”
PHILANTHROPY: You said that Ted Turner’s gift [of $1 billion over ten years to the United Nations] makes him a role model for the rest of us. Is Ted Turner really going to be able to get the UN, an agency with 54,000 bureaucrats, to spend this money efficiently?
MR. BLOOMBERG: Oh, I don’t know, but that has nothing to do with whether he’s a role model. You may not think that’s the best cause, but Ted Turner has given a third of his net worth to a philanthropic cause. I don’t have a clue as to whether he can get the UN to spend the money efficiently. It’s kind of hard for an individual to make an impact on an organization, particularly if it’s government funded, or if it’s funded by 185 governments.
PHILANTHROPY: As a philanthropist, what has been your greatest frustration?
MR. BLOOMBERG: I have learned that no good deed goes unpunished. I’ll tell you one good story. We wanted to redo a children’s playground in New York City and there were people who wanted nothing changed as long as the playground’s original architect was [still] alive. Never mind the fact that the playground was built with materials that you could never use today, or that the mothers who had kids there desperately wanted the park. Most of the people who didn’t want it, by the way, did not have kids using the playground now. Only in New York—you could stand on the corner and give away $1,000 bills and annoy somebody.
PHILANTHROPY: Do you spend a lot of time contemplating the tax implications of a particular gift?
MR. BLOOMBERG: I don’t spend a lot of time worrying about the tax implications. Once Vartan Gregorian [a trustee of the J. Paul Getty Trust] and I were soliciting somebody and the whole conversation revolved around the question of how one could tax-effectively make the gift. Afterwards, Vartan and I were outside talking about whether we could expect to get anything from this person. And his conclusion, which happened to be dead right in this case, was that when they talk about the tax implications you aren’t going to get anything.