Name this donor: He was called “the most beneficent philanthropist in the history of the world” by the American Benefactor in a 1997 survey. He is one of Ronald Reagan’s closest friends, and his biographer says that both he and Reagan are “patriots, traditionalists, anti-communists, opponents of big government and high taxes.” In 1975, he introduced Reagan to Margaret Thatcher. And his philanthropy has substantially enriched the political Left.
The answer: Walter Annenberg. Born in 1908, Annenberg, long-time publisher of the Philadelphia Inquirer and TV Guide and ambassador to Great Britain during the Nixon Administration, has been a prominent Republican for decades. But his philanthropy has tended to be cautious and unadventurous, and he has donated very little to conservative causes. If you want to know why, it is helpful to understand what the administration of Franklin Delano Roosevelt did to his father, Moses Annenberg. To understand that, it suffices to read Christopher Ogden’s fine biography of both Annenbergs.
Ogden, a writer for Time and Fortune, is best known as the biographer of Pamela Harriman. Walter Annenberg granted Ogden unlimited access to his private archives, including a compete correspondence file dating back to 1925. With the help of these files, Ogden has produced a fair-minded and judicious biography.
The Annenbergs progressed from poverty to enormous wealth in two generations. The family came from the Russian hamlet of Kalvishken. Like most Jews, the Annenbergs were persecuted by the fiercely anti-Semitic regime of Czar Alexander III. In 1885, Tobias Annenberg emigrated to America, along with his eight children, including eight-year-old Moses Annenberg (1877-1942).
Moses eventually ended up in Chicago, where he entered the newspaper distribution business working for William Randolph Hearst. At the time, Chicago had nine newspapers, so when Hearst tried to establish the Chicago American in 1900, Annenberg and his staff (which included men nicknamed “Diamond Dick,” “Schemer,” and “Bricktop”) found it necessary to resort to circulation-boosting methods frowned on today, such as beating up rival distributors with baseball bats.
Seeking a more sedate line of work, Annenberg and his family moved to Milwaukee. In 1922 he purchased the Daily Racing Form, the leading trade newspaper for horse racers. He then established the Nationwide News Service to provide faster and more detailed race results for clients who could afford it. By the late 1920s, Nationwide was AT&T’s third-biggest customer.
Ogden points out that Moses Annenberg occasionally engaged in shady enterprises. Although Nationwide supplied information to many legitimate newspapers, it also freely sold information to bookies. And in 1934, Annenberg paid $100,000 to Frank “The Enforcer” Nitti, Al Capone’s chief lieutenant, for “services rendered”—the chief “service” being not to murder Annenberg and his family.
But what got Moses Annenberg into trouble was his purchase of the Philadelphia Inquirer in 1936. Moses Annenberg was growing more conservative, and his growing contempt for President Franklin Roosevelt led him to transform the Inquirer into a crusading anti-New Deal organ. “Government, swinging its mailed fist at business, has not brought lasting recovery,” Annenberg wrote in one 1937 editorial. The New Dealers, Annenberg added in a 1938 editorial, practiced “a program and an economic philosophy which have signally failed, in five years of drastic experiments, to establish the United States on a sound recovery footing.”
Working with such prominent Philadelphia conservatives as Sun Oil executive Joseph N. Pew, Annenberg helped Republican Arthur James to secure the Pennsylvania governorship in the 1938 elections. But Roosevelt’s staff, horrified that the Republicans had captured eight Senate and 82 House seats, decided to fight back. And one of their chief targets was Moses Annenberg—a man, Interior Secretary Harold Ickes Sr. noted in his diary, who was “as cruel, as ruthless, and as lawless as Hitler himself.”
The IRS launched a probe of Annenberg’s finances shortly after the 1938 elections. In August 1939, it indicted both Moses and Walter Annenberg and three top Annenberg associates on 65 counts of evading $5.5 million in taxes. Collier’s Magazine writer John T. Flynn then interviewed Annenberg, asking him if it was a mistake to enter politics. Annenberg was unrepentant. “I would do it all over again even if they put me on the scaffold for it,” he told Flynn.
Annenberg tried everything he knew to stop the government, including closing the Nationwide News Service. In April 1940, he plead guilty to one count of evading $1.1 million in taxes, chiefly by padding expense accounts, in return for the government dropping all other charges against him, his son, and his associates. Annenberg was sentenced to three years in prison and his companies were forced to pay $9.5 million in penalties. Annenberg never served out his sentence; he was released in June 1942 after suffering a massive brain tumor in prison and died a month later.
By Ogden’s account, Walter Annenberg appears to have been permanently scarred by what the State did to his father. In 1946, for example, he told his fiancee that his effort to pay his father’s tax bill had left him, like a shell-shock victim, suffering from the fears of “getting enmeshed with federal trade authorities, Treasury snoopers, agents, immigration officials, customs officers, and various and sundry other official (and officious) individuals who have and still would like to make life miserable for me.”
Thus, while Moses Annenberg fought politicians, Walter Annenberg has courted them. And while Moses Annenberg was an unrepentant conservative, his son calls himself an “independent Republican” who has never involved himself in conservative causes.
Walter Annenberg has been an innovative publisher. In 1944, he realized that teenage girls had no magazine dedicated to them, and created Seventeen. And in the mid-1950s, he bought several regional television magazines and amalgamated them to form TV Guide. These successes enabled him to sell his company, Triangle Publications, to Rupert Murdoch in 1988 for $3.2 billion. A year later, he created the Annenberg Foundation, which now has a $3 billion endowment, making it the nation’s twelfth largest.
From the start, Annenberg has always been a hands-on donor. According to Ogden, Annenberg said he was strongly influenced by Henry Ford II, who “told me that the biggest mistake of his life by far was walking away from the Ford Foundation.”
“Why shouldn’t I do my own [grant] evaluations?” Annenberg added. “I don’t need people on the sidelines telling me what to do with my money. I think I have the character and intelligence to decide that myself.”
Annenberg’s principal philanthropic adviser is Vartan Gregorian, now president of the Carnegie Corporation. Gregorian, if we are to believe Ogden, is to Walter Annenberg what Frederick Gates was to John D. Rockefeller—the “knowledgeable, trusted lieutenant.” As lieutenants go, Gregorian is not known for challenging the status quo.
Consider Annenberg’s best known grant, a 1993, $500 million contribution to school reform. Some of this money will go to useful causes, such as $50 million to the National Institute of School Reform at Brown University. (At the time of this grant, Vartan Gregorian was Brown University president.) But most of the rest appears to have been given to study groups, consultants, researchers, bureaucrats, and people who make a living thinking about schools. Parents and children will be lucky to see 25 cents on the dollar by the time the money gets to them.
By contrast, the $100 million that John Walton and Ted Forstmann have invested in the Children’s Scholarship Fund goes directly to families. Their smaller grant has already done more to constructively change American education than the Annenberg Foundation ever will.
Most of Annenberg’s other major grants have gone to universities. His two largest grants are $239 million to the University of Pennsylvania and $177 million to the University of Southern California to set up left-leaning communications schools. Much of the rest has been endowment-building grants—$131 million to the Peddie School, a prep school Annenberg attended, and smaller sums to the United Negro College Fund and Harvard. Unfortunately for Annenberg, there’s a great deal of evidence that the worst possible way to ensure that colleges honor your wishes is to provide unrestricted aid to university endowments.
Legacy is a well-written, fair-minded account of Moses and Walter Annenberg’s lives. What is more, perhaps better than any extant biography, it manages to answer the question of how Walter Annenberg could be both a bold innovative entrepreneur and a timid philanthropist.
Martin Morse Wooster is a visiting fellow at the Capital Research Center and the author of The Great Philanthropists and the Problem of Donor Intent.