Big Bucks, Little Luck
According to a recent report by the Annenberg Challenge, the $1.1 billion gift of Walter H. Annenberg and others to K-12 public schools did not have much of an impact on teaching and learning. What began at a White House news conference in 1993 as a $500 million pledge by Annenberg to improve American education became a billion-dollar effort when corporations, philanthropists, universities, and other benefactors contributed an additional $600 million. As the Washington Post reports, “The hope was that it would fundamentally change American education,” but “it became clear that the money helped bring about mostly modest improvements in some places.” In addition, “the money was spread so thin that its impact was hard to measure.” The gift, said to be the nation’s largest public-private effort to improve schools, funded 18 projects around the country, which in turn funded individual schools. “The effort,” said Warren Simmons, executive director of the Annenberg Institute for School Reform, “was hampered by the troublesome realities that often stymie public school improvement: rapid turnover in school leadership, difficult social problems, and entrenched school cultures that are resistant to change.”
Are You There, God?
Sir John Templeton is giving $1 million to 15 scientists to discover a purpose in the cosmos, reports the Fort Worth Star-Telegram. “The scientists, many with international reputations, have spent their careers studying the big-bang theory, the origin of stars and galaxies, the fundamental physical constants, and the origin of life. Now they’ve set out to explore the question that intrigues Templeton,” namely, “Is the universe the product of design or accident?” Templeton, who sold his mutual fund empire in 1992, now “devotes himself to philanthropy and to his quest for common ground between science and religion.” Charles Harper is the foundation’s executive director, and he “crafted the grant program based on the question, ‘Is there a fundamental purpose in the cosmos?’” The scientists’ most promising work to date involves the theory of “fine-tuning.” “Fine-tuning has to do with certain numbers that are ‘wired into nature,’” said Max Tegmark, a physicist at the University of Pennsylvania who co-chaired the grant program and helped choose the recipients, “such as 1836-1, which is the ratio of a proton’s mass to an electron’s…Changing these fundamental constants would render the universe uninhabitable—either because matter would fall apart or stars wouldn’t shine or the universe would collapse.” The devil, of course, is in the details. John Donoghue, a physicist at the University of Massachusetts and a grant recipient, says, “I think religion would like to know…but I don’t think we’ll come up with a definitive answer.”
Foundation of Learning
Most people learn about philanthropy late in life, after they’ve earned the money to start their own foundation, but high school students at St. Paul-based charter school Minnesota Business Academy get an early start. The St. Paul Pioneer Press reports that Amy Hubbard, founder of the Irwin Andrew Porter Foundation in Minneapolis, helped the students set up Minnesota Connects under the direction of leaders such as Karl Carlson, a former Dayton Hudson vice president. The group is the student arm of Hubbard’s foundation, which she began after selling her warehouse and logistics business. “Earlier this year, the students were given power to make the investment decisions over about $200,000 and the grantmaking duties for that money as well. Foundations give out at least 5 percent of their assets; so that means the students this year will oversee the distribution of about $10,000 in grants.” The experience differs from business school programs that allow students to “invest” in the stock market with pretend money, because Minnesota Connects’ $200,000 is very real, and so are the grantees to whom it awards funds. When deciding who will receive funding, Minnesota Connects follows the “give and receive” model of giving, which its parent foundation also uses: “Those who receive funding should expect to give back to the community in some way. For example, a foundation-supported project in Chicago provided summer art instruction for students in the afternoon, but those same students were expected to volunteer their mornings to build a playground set for younger children.” Hubbard hopes others will copy the program; “the lessons that can be learned are endless.”
What Price, Silence?
At the annual meeting in Los Angeles of Foundations and Donors Interested in Catholic Activities, “an umbrella organization representing 47 foundations that gives the American Catholic church $200 million a year,” philanthropists and their lawyers and administrators “called on the church to issue an audited report on how much money it has spent settling sexual abuse cases in the past two decades,” reports the New York Times. Erica P. John is president of a family foundation that contributes up to $5 million a year to Catholic causes in Milwaukee; she says, “The church should not be a secret society . . . We’re the people of God, and we want transparency.” Others are more direct. “Francis J. Butler, president of Foundations and Donors, said the group wrote to Bishop Wilton D. Gregory, the president of the bishops’ conference, warning that ‘the crisis of clergy sexual abuse will have profoundly negative repercussions for Catholic giving in the absence of clear and transparent financial reporting.’”
Pew Charitable Trusts is changing the way it distributes its national and local grants. The foundation has $4.3 billion in assets and this year is committed to distributing $230 million. But instead of distributing large yearly, biannual, or quarterly grants, it plans to disburse grants in equal monthly installments. Pew told the Philadelphia Inquirer that “keeping payouts smaller but steady each month would help it minimize risk to its investments, which have suffered along with the stock market. The move will also help it cut its federal excise tax on net investment income.” The move is one way the foundation hopes to avoid having to reduce the amount of funds it distributes each year. Rebecca W. Rimel, president and chief executive officer of Pew, says, “Pew might cut its grant commitments next year by around 5 percent if its investments continue to decline in value.”
More Cheese, Please
Two decades past, a University of Florida professor drew the ire of nutritionists for suggesting that one could survive and have a healthy life by eating McDonald’s fast food every day. Now it’s the Gates Foundation, according to a Wall Street Journal story, that is drawing nutritionists’ wrath for funding a program that would assist food producers Kraft Foods Inc., Procter & Gamble, and H.J. Heinz, as well as vitamin manufacturers Roche and BASF Corp., in producing fortified food products for poor nations. “Participating companies would add nutrients . . . to food products they sell in poor countries . . . and provide governments and small food producers with technical assistance for fortifying food staples, such as rice. In exchange, the consortium, called the Global Alliance for Improved Nutrition, or GAIN, would offer companies assistance in lobbying for favorable tariffs and tax rates and speedier regulatory review of new products in targeted countries.” A New York University professor of nutrition criticizes the program as reductionist. GAIN, says Marion Nestle, is a “single-nutrient technofix to a problem that is much more complex.” The real problem, Nestle argues, is poverty, and no one is looking at ways to reduce it and get people the health care they need. That’s “a good idea,” retorts Sally Stansfield of the Gates Foundation, “but a lot of people will die from malnutrition before we eliminate poverty.”
$100 Million of Words
Never before has money spent on educational philanthropy been focused exclusively on literacy, let alone in a single state. James and Sally Barksdale, after making a fortune in the Internet boom, did just that when they gave $100 million in 2000 to help the children of Mississippi learn to read. According to the Baltimore Sun, the Barksdales gave the money with the stipulation that it was to be seen as an investment, not a gift. “Investments must work,” James Barksdale said. “Gifts can be easily squandered.” The investment involved money for reading materials, “peer coaching” sessions for teachers, and centers for parents and children to read together. In addition, the schools developed a system for teachers to follow that will assess each child’s reading skills. One school that has benefited is East Flora Elementary School. Principal Martha D’Amico said she can now follow the reading progress of each of her school’s 320 students. Mississippi Superintendent Richard Thompson couldn’t be happier about the Barksdale Institute. Thompson said that 700,000 Mississippians read poorly or not at all, and “a lot of that is due to the fact that we did a poor job of teaching reading.” That is why the Barksdale Institute also pays the salaries of 11 education professors in Mississippi’s eight state universities. “Reading is now our No. 1 priority,” said Thompson, who was originally responsible for contacting the Barksdales.
For people dedicated to philanthropy but wary of the potential tax and estate planning pitfalls that establishing a foundation can create, supporting organizations are becoming increasingly popular. These are a cross between public charities and private foundations, “but boast significant tax advantages over private family foundations,” according to the Financial Times. For example, a family can use “cash donations to foundations to offset just 30 percent of their adjusted gross income.” Yet “the same cash donation to a supporting organization, which is classified as a public charity” can offset 50 percent of the family’s income tax. The downside is that donors lose control of how their money is spent. Despite this drawback, King McGlaugnon, director of Merrill Lynch’s Center for Philanthropy and Non-profit Management, reports the movement is growing rapidly. His group, for example, “had no supporting organization clients five years ago; today it has 100.” Supporting organizations are also growing in popularity because money managers have greater latitude in investing funds. “Created in the 1960s, the rules [for foundations] are very conservative and prohibit financial instruments such as put and call options, commonly used in portfolios today. Those limits make it difficult for family foundations to use hedge funds and other alternative investments.”
Because drug-research and -approval costs are so high, drug makers are less likely to research drug therapies for those suffering from a fatal but rare disease such as ALS or Huntington’s. But now many families are creating their own foundations to assist their loved ones in finding the treatment they need. According to the Wall Street Journal, “Though the vast majority of family disease foundations still devote most of their efforts to publicity and fundraising, a few have stepped directly into drug research.” James Heywood, whose brother Stephen suffers with ALS, established the ALS Therapy Development Foundation soon after learning of his brother’s illness. It created its own lab for testing ALS-infected mice with new drug combinations. “The lab operates like a factory, testing drugs on the mice more quickly and less expensively than in an academic or for-profit business setting…‘We don’t have five years to wait for the traditional drug discovery process,’” James Heywood said. “In five years, everyone I know would be dead.” When a find is made, the foundation spreads the word via the Internet to doctors around the world. Of course, “there is a risk in working so fast,” but even some National Institutes of Health officials approve of the process, because “it can save valuable time in the search for a cure.”
What’s in a Name?
Nearly 100 years after his death, the Cleveland Plain Dealer reports that Andrew Carnegie is still at the center of debate. This time it’s not over how he handled the 1892 strike at his steel works in Homestead, Pennsylvania. Rather, the question is whether his name is pronounced “CarNAEgie,” or “CARnegie.” In Cleveland, the Indians’ play-by-play man greets listeners by saying “hello from ‘the corner of CarNAEgie and Ontario.’” Most Pittsburgh residents agree with the announcer’s pronunciation, but a student at Carnegie Mellon University says at her institution both pronunciations are in play, with the two “split about evenly” in use. A recent NPR broadcast had it both ways in the same program. Linguist Carol Tenny of Carnegie Mellon and the University of Pittsburgh says, “There isn’t any incontrovertible, God-given way to say it. But Carnegie was a Scotsman and a Pittsburgher. He was known as CarNAEgie here.” Dale Carnegie, who owns a business training company that bears his name, says “the sweetest sound a person can hear is his own name—pronounced correctly.” And when he introduces himself to you, there’s no doubt how he says it: CARnegie.
Bush Praises Bradley
Visiting Milwaukee just before the Fourth of July to push his major domestic policy issues, President Bush made a special point to single out the Bradley Foundation’s two Mikes, Grebe and Joyce, for their role in the foundation’s efforts to help “people think anew.” The Bradley Foundation, began the President, “has always been willing to seek different solutions. They’ve been willing to challenge the status quo. They’d say, where we find failure, something else must occur . . . Thanks for your good work.”