Businesses & Schools Partner
B.J. Cassin, 69, attended a now-defunct Catholic high school while growing up in Massachusetts. Ever since, he’s been looking for a way to help Catholic schools survive and prosper. In Cristo Rey Jesuit High School in Chicago, the Washington Post reports, he thinks he’s found an answer. At Cristo Rey, students (mostly poor Latinos) earn about 75 percent of their tuition by working in law offices, banks, and advertising firms that need clerical help. Asked if not being paid a salary bothered him, a Cristo Rey student retorted, “Maybe I don’t see any money, but I get an education.” The program seems to be working. Eighty-five percent of students receive excellent work reviews, and 93 percent go on to graduate from Cristo Rey. The local public schools graduate just 59 percent of their students. With Cassin’s help, Cristo Rey network high schools now operate in Austin, Chicago, Los Angeles, and Portland. More schools are being planned for Cleveland; Denver; Waukegan, Illinois; and Lawrence and North Cambridge, Massachusetts.
The New York Times calls it “muscle philanthropy”; others call it responsible grantmaking. Either way, donors seem more willing to pull funding or to sue when a grantee fails to live up to his agreement. St. Luke’s-Roosevelt Hospital Center in New York, the U.S. Olympic Committee, and a number of universities and school districts have recently had grants pulled or been sued over the administration of grants. The Times identifies two factors in this trend: state attorneys general—unable to monitor the exploding number of nonprofits—are allowing donors to monitor nonprofit performance for effectiveness; and courts are enforcing donor intent.
Another French Revolution
European nations have a long history of state-supported art. But financial pressures are forcing these nations to look anew at how the arts are funded. Time International reports that in France, Germany, Italy, and England, art bodies are facing pressure to become more self-sufficient, even if it means embracing formerly taboo methods like privatization and corporate sponsorship. “Culture is business,” says Werner Heinrichs, dean of a German art school, and “nobody should pretend that these two things are not linked.” Even in France, historically the least friendly European nation toward private arts funding, things are changing rapidly. The nation only has 600 foundations, and there currently are few tax incentives for giving. But the French Parliament is considering new laws that would allow tax deductions of 60 percent for donations made “in the public interest,” and raise the ceiling on deductions from 10 percent to 20 percent of taxable income. Action is expected this summer on the measures, which would apply to the arts, hospitals, sports, and youth projects, among other “public interest sectors.”
Foundation Payout Fight
“Key members of Congress are considering legislation that would force private foundations to donate billions more in grants by cutting out a loophole that allows them to count salary, travel, and building expenses as part of their giving,” writes the San Jose Mercury News. Additional impetus for such a move was provided by recent reports in the News about the James Irvine Foundation’s spending on its recently retired president Dennis Collins. Sen. Charles Grassley (R-Iowa), chairman of the Senate Finance Committee, says, “you have to wonder how excessive executive salaries and retirement packages fulfill the vision of those who left their money to set up foundations.” Mark Kramer of the Center for Effective Philanthropy notes that “some administrative costs are an integral part of grantmaking and should be encouraged,” the paper reported, including “support services for nonprofit agencies that receive grants and oversight of their spending.” Eliminating all administrative expenses from foundations’ required 5 percent payout, Kramer worries, could discourage foundations from performing due diligence. Another proposal being advocated would raise the minimum payout for foundations from 5 percent of assets to 6 percent. The Council on Foundations told the News it opposes that because “it would deplete endowments.”
Lining Doves’ Nests
Though the antiwar movement “is decked out” with counterculture looks, it’s receiving “some very establishment funding,” the Washington Times reports. “In a few months, foundations and donors have kicked in millions of dollars” to stage demonstrations, buy newspaper and TV ads, pay for websites and staff, and “lease office space in high-rent New York, Washington, and San Francisco locales.” Most funding goes through “sympathetic ‘fiscal sponsors,’ groups with tax exempt status that have also lent out staff and office space.” Code Pink Women for Peace, for instance, has office space from the National Organization for Women and the Institute for Policy Studies. The latter, a left-wing think tank in Washington, D.C., receives funds from the Turner, Ford, and MacArthur foundations, among others. San Francisco’s Tides Foundation “has given $1.5 million to antiwar efforts since September 11, 2001,” including a salary for the director of the Win Without War coalition. “Thanks to the Turner Foundation and the San Francisco-based Plowshares Fund, TrueMajority.com says, its $1.5 million operating budget helps pay for five full-time staff and six consultants.”
Giving Is Down, Not Out
Despite terrorist attacks, a volatile market, and a year-long recession, there is some good news about giving in the Foundation Center’s Foundation Growth and Giving Estimates: 2002 Preview. The center tracks aggregate giving and asset data for close to 62,000 U.S. grantmaking foundations, and their numbers show little change in total dollars of giving from 2001 ($30.5 billion) to 2002 ($30.3 billion). Giving by independent foundations decreased by 1.5 percent in 2002, while corporate foundation giving and community foundation giving rose 2.2 percent and 2.6 percent, respectively. “The stability of giving in 2002 reflects how large and diverse the U.S. foundation community has become,” says Sara Engelhardt, president of the Foundation Center. “Although most of the largest foundations lost assets in the stock market decline, several maintained or even increased their giving. At the same time, giving by the growing pool of smaller and newer foundations helped to mitigate decreases reported by many of the bigger foundations.”
A separate survey by the center of 760 large and mid-size foundations has more encouraging news. While roughly two-fifths of those surveyed said they expect their giving to decline in 2003, nearly three-fifths said their giving would remain constant or increase.
The reports are available at fdncenter.org.
Chicagoans know the name Pritzker well, because it appears on buildings at the University of Chicago, Northwestern University, and in galleries at the Art Institute, among other places. But the family has kept its internal affairs intensely private—until now. In 1995 the family’s leading member, Hyatt Hotel founder Jay Pritzker, quietly created an agreement to share the family’s $15 billion fortune. The deal, which offered cash payouts to family members not interested in running the family’s business interests, has gone sour. The Associated Press reports that 19-year-old actress Liesel Pritzker has filed suit claiming she and her brother, Matthew, were unfairly left out. She further claims her father drained her trust funds of over $1 billion in the years following his divorce from Liesel’s mother. “Jay Pritzker was trying to avoid exactly this type of problem when he called relatives together in 1995 to chart the Pritzker future,” says Mel Klein, a longtime business partner and friend of the hotel magnate. In a rare interview, Jay Pritzker once told Fortune, “No one in the family has a right to anything until he has made a contribution doing something and doing it well.” The first Pritzker arrived penniless in Chicago in 1881.
When FBI agents needed to recover an original copy of the Bill of Rights stolen during the Civil War, they turned to a philanthropist—an undercover philanthropist, that is. Fourteen copies were written by scribes in 1789: one copy for each of the states to ratify and one for the federal archives. North Carolina’s copy is one of five that had long been missing. It was recovered from an unidentified broker, who brought it to the Philadelphia offices of attorney Stephen Harmelin, the Philadelphia Inquirer reports. Harmelin represents the National Constitution Center and orchestrated the meeting between the broker and an undercover FBI agent, who posed as a philanthropist wanting to buy the document and donate it to the center. The broker wanted $4 million, about a tenth of its estimated value, according to the FBI.
Buying into Corporate Philanthropy
Even before Del Monte Foods signed a December 2002 deal to purchase some divisions of Heinz, it learned that corporate philanthropy would be important in its new Pennsylvania home. Last June, according to the Pittsburgh Post-Gazette, Heinz company leaders took Del Monte reps on a tour of Heinz Field, Heinz Hall, and the Heinz history center. It’s new territory for Del Monte, which has not been a “major civic factor” in its home town of San Francisco, a Del Monte official said. In the past, the company has mostly limited its charitable outreach to small projects. Unlike the Heinz Company, Del Monte does not have a corporate foundation.
For Love of Nature
The Reverend Holmes Rolston III is this year’s winner of the Templeton Prize for Progress Toward Research or Discoveries about Spiritual Realities. A professor of environmental ethics at Colorado State University, Rolston stresses putting earth’s natural environment at the center of human moral reflection. “I’ve spent my life in a lover’s quarrel, not with my wife of four decades but with the two disciplines I love: science and religion,” Rolston tells the Associated Press. “I had to fight—or maybe better, challenge—both theology and science to love nature.” Rolston will use the money to found a chair in science and religion at Davidson College in North Carolina, his alma mater. The prize is worth approximately $1.2 million and was started by Sir John Templeton.
Feeding Military Families
George H.W. Bush famously disliked broccoli, but families of servicemen deployed by George W. Bush were excited to receive shipments of broccoli, cauliflower, lettuce, and beans thanks to “Operation Salad for Soldiers.” Bonita Packing, a Santa Maria, California vegetable firm, told the Los Angeles Times it was donating 15 tons of fresh foods to families at Vandenberg Air Force Base, Camp Pendleton, and Miramar Marine Corps Station. The company said 6,000 families will benefit from the giveaway. Bonita’s harvest manager, Stan Otremba, said he thought of the idea after watching a news report on the financial hardships of military families.
Sinking Revenue Alarms Charities
“Plunging donations and grants, reduced government funding, a troubled Washington area United Way, and increased demand for services” are threatening the survival of a growing number of nonprofits in and around the nation’s capital, writes the Washington Post. Until the economy began falling off in 2001, grantmakers and nonprofits alike were booming. From 1994 to 2001, “local foundation grants to nonprofits tripled from $64 million to $213 million.” Likewise, the number of nonprofits doubled over the same period to more than 23,000. Among the groups taking extreme measures just to survive is the YWCA of the National Capital Area, which has cut its workforce from “119 to less than 30 since last summer.”