September 11 Funds Overflow
Joshua Gotbaum, head of the United Way’s September 11th Fund, tells the Boston Globe that the roughly $1.7 billion raised for victims of September 11 is probably far more than is needed. Two-thirds of his fund’s $425 million remains unspent, as does nearly half of the Red Cross’s $828 million Liberty Fund. Rudolph Giuliani’s Twin Towers Fund, “set up strictly to help families of the 403 rescue workers who were killed in the attack, has raised $140 million, of which $90 million remains untapped,” the Globe reports. Giuliani kept control of the fund after leaving office and continues to hold fund raising events. Gotbaum recently “went beyond a mere halt in funding and issued a plea for people to stop writing checks.”
The State of Giving
The final tabulations on 2001 charitable giving are coming in. Some of the widely varying experiences include the “surge” in charitable donations the Chicago Tribune reports that city saw in December. The United Way of Chicago “expects to reach its reduced goal of about $95 million—$2 million less than originally hoped for but roughly the same amount raised in 2000.”
The Chattanooga Times reports better things from down South: “Chattanooga giving in 2001…weathered the storm of September 11, and 2001’s sagging national economy. And estimates of local giving for 2002 look good as well.” The Baltimore Sun paints a mixed picture: “Many Maryland organizations suffered in the aftermath of the terrorist attacks and from a troubled economy, but others did better than expected.”
The Orlando Sentinel studied the effect on the United Way’s national network: Twenty-two of the 50 largest United Way campaigns “either failed to reach their goals or project that they will not make them when their campaigns close,” although final results won’t be known until the summer.
Orlando’s United Way was among the hardest hit, falling $2.6 million short of its $20.6 million goal, due to a local economy that has tanked along with the tourist industry. All told, United Ways around the country raised nearly $4 billion in 2001, but ten of the 50 largest will end up raising less money in 2001 than they did in 2000, including Los Angeles, Boston, and San Francisco. Daniel Borochoff of the American Institute of Philanthropy blames the sagging U.S. economy: “There are fewer paychecks to deduct money from.”
Who’s Entitled?
Wall Street banker Thomas Connor lost his father to Puerto Rican terrorists in Manhattan 25 years ago and another relative on September 11, but he writes in the Wall Street Journal that he doesn’t like the “dynamic” that is “occurring as the nation yearns to compensate” bereaved families. By creating an unprecedented fund of $4.6 billion (and giving federal tax amnesty to the families of victims for 2000 and 2001), “the federal government is implicitly accepting blame” for the September attacks. This ignores other horrific events, such as the unsolved November plane crash in New York, the mysterious anthrax attacks, and even the terrorist victims on Pan Am Flight 103, not to mention any new atrocities that may occur.
“Families of our soldiers killed fighting in Afghanistan will receive less in federal benefits than the $250,000 ‘pain and suffering’ component of the federal fund,” Connor notes. “This largesse has gone well beyond a safety net and become an entitlement, which like all entitlements never satisfies everyone.” Instead of providing “compensation,” which suggests entitlement, he urges “compassionate aid” for only those victims with real financial need.
Pentagon Workers Say, ‘No Thanks’
Months after September 11, money continues to pour in for families of the 189 Pentagon victims, but “survivors are hardly clamoring for charity. Some have turned away offers to help. Many have yet to ask for it,” and still others probably don’t know the cash is available, the Los Angeles Times reports. “We still have a number of families who have not asked us for anything,” said an official at the nonprofit Army Emergency Relief Society, which has $2.2 million to distribute. “Caseworkers say they know of no family in dire straits,” and many apparently share the feelings of an Army librarian burned in the attack, who said her injuries have been taken care of and she hopes “other people…who might need it more” are helped instead. The families of military personnel are automatically eligible for life insurance, a $6,000 “death gratuity,” housing and burial aid, and health care coverage, and in a special order the Defense Department extended compensation to civilian workers’ families, but the amounts involved are considerably lower than what similar families will receive for losses in the attacks on Manhattan.
The Charity Budget
President Bush’s proposed 2003 budget contained several items of interest to charitable givers, including a provision allowing non-itemizing taxpayers to deduct from their taxable income part of their charitable donations. Another proposal would allow persons older than 59 and a half to donate earnings from their IRAs tax-free. Rules concerning corporate in-kind donations, such as food, would be eased, and the corporate limit on donations—currently 10 percent of taxable income—would be increased to 15 percent. The foundation excise tax would be halved to 1 percent. The White House estimates that the changes will shift close to $2 billion out of government coffers and into the private sector in fiscal year 2003.
Donors Open Doorways
When Rick Baker was running for mayor of St. Petersburg, Florida he promised to boost public education. Now that he’s in office, a big part of his boosting is a private-public partnership called Doorways that for the next three years will allow 100 public school sixth-graders to sign contracts that will guarantee them college scholarships. The contracts require students to maintain C averages, stay out of trouble, and graduate from high school, and the city is finding volunteer mentors to help them. Meanwhile, local philanthropist John Galbraith has pledged to underwrite half the money needed; the other half will be raised from other donors and from state matching funds. Galbraith told the St. Petersburg Times, “It promotes higher education, but also promotes adhering to strong social values,” and he thinks “you probably can’t get a better investment than that.”
Thomas Served Up Helping
The recently deceased Dave Thomas —an adopted child who overcame a difficult early life to found the fast food chain Wendy’s—long had a philanthropic interest in helping kids, the Fort Lauderdale Sun-Sentinel reports. In 1990, President Bush appointed him to lead the White House Initiative on Adoption. Two years later he started the Dave Thomas Foundation for Adoption. He was also a founding board member of Children’s Home Society Foundation in Florida, helped establish the I. Lorraine Thomas Children’s Emergency Home in Fort Lauderdale, and had his foundation partner with the Postal Service “to create the 33-cent adoption postage stamp.”
Thomas also “gave his time to educating students about free enterprise” through his Enterprise Ambassador project. JoAnne Chester Bander of South Florida’s Donor Forum describes him as “an activist donor…who used all the resources at his disposal around his commitment to helping children stuck in foster care,” including his “relationships, his philanthropic funds, his political networks, and his ability to attract media attention.” (For more on adoption, see “A Lost Option?” in this issue of Philanthropy.)
Vouching for Vouchers
Laura Dillard’s four children are among about 1,300 in St. Louis who receive tuition assistance from either the Children’s Scholarship Fund or its sister program, the St. Louis School Choice Scholarship Fund. (The funds pay up to $1,500 per year for four years to help children attend the school of their choice.) After three years with the programs, Dillard tells the St. Louis Post-Dispatch that her children are “thriving aca-demically and socially” since enrolling at Holy Family School. “It’s just changed their world completely for the better,” she says. One son, for example, “had repeated the second grade and yet did not learn to read while in a city public school. After a year at Holy Family, he was reading.”
A new report from the RAND Corporation, the newspaper notes, “tracks a high level of satisfaction among parents” receiving such scholarships around the country. Parents say private schools “have superior academic programs and better discipline,” and the report “backs earlier claims that African Americans on scholarship at private schools in New York and Washington are performing better than their counterparts in public school.”
Major League
The sale of the Boston Red Sox, though slowed by several controversies, means the Yawkey Foundation will gain over $400 million, transforming the small family foundation into one of the largest grant makers in New England. Named for the late Jean and Tom Yawkey, who owned 53 percent of the Red Sox, the foundation is headed by John Harrington, who has also served as the Red Sox chief executive.
Nonprofit consultant Tom McLaughlin tells the Boston Globe, “It sounds silly, but giving money away is hard. To do it effectively, you can’t just write checks. You have to have a clear idea of what you want to accomplish”—especially when your endowment suddenly increases elevenfold. Harrington declines to discuss his plans for the foundation, but it’s expected he will “maintain the foundation’s local focus” and retain an “active role.” A Globe editorial adds that the foundation’s “cozy four-member board under the sway of Harrington” will change to nine members, “with the five newcomers being vetted” by State Attorney General Thomas Reilly, who intervened in the negotiations over the Red Sox sale.
Giving Goes West
While New York has long been home to the largest concentration of big foundations, a new study shows that philanthropy’s center of gravity is shifting in a direction that would please New Yorker Horace Greeley, famous for the advice: “Go West, young man.” Conducted jointly by the USC Center on Philanthropy and the Foundation Center, the new study shows California foundations totaling $68.3 billion in assets in 1999, second only to New York’s $81.7 billion. James Ferris, director of the USC Center, explained to the Los Angeles Times that “philanthropy follows where wealth is created,” and so growth is concentrated in the San Francisco Bay area and coastal Southern California—both “engines of great economic growth and wealth creation.” Health and education were the top funding priorities among California donors, the study found, and for the first time the West outpaced the Midwest and the South to become the second most asset-rich region after the Northeast.
Detroit Schools Aid Orphans
Before September 11, and before President Bush “asked children to each send $1 to help Afghan children, some Michigan kids were already helping,” according to the Detroit Free Press. Students at Friends School, a private Quaker institution, and at three other schools in Detroit raised roughly $30,000 over three years to open a school last March in Afghanistan. Because girls are allowed to attend it, the benefactors still don’t know its name or location for fear that, even after the fall of the Taliban regime’s ban on education for women, female students would be in danger. The Detroit schoolchildren originally heard about the travails of their Afghan peers from an Afghan native who had been teaching in Northville, Michigan.
Charity Close to Home
Over the past two years, Wells Fargo Bank of San Francisco has changed its philanthropic strategy to shift from a traditional grant process directed by its national headquarters to a “focus on smaller gifts awarded by local bank officials,” reports the San Jose Mercury News. It inherited the idea from Minnesota’s Norwest Bank, which merged with Wells Fargo in 1998.
“Norwest was by no means the only bank using a decentralized approach,“ reports Dwight Bur-lingame of the Center on Philanthropy at Indiana University. Bank One, Bank of America, and Citigroup do as well. “The common assumption was that charity was purely a cost” for banks, Burlingame said, “but since the 1990s, the mindset has shifted toward considering philanthropy as an indirect benefit” because it burnishes the bank’s image and connects it “to cities and towns throughout a far-flung banking network.” Plus, studies show “a kind-hearted image can increase bank business.”
Brown to Head Daniels Fund
Former Senator Hank Brown has announced his intention to resign as president of the University of Northern Colorado to head the Daniels Fund, a Denver foundation created by cable TV mogul Bill Daniels. Despite shaking up the status quo at the university—Brown cut millions of dollars and dozens of jobs from administration and re-allocated the money to instruction—he is popular among faculty and students at the school. He has set fund raising records there, boosted both admission standards and the number of admissions, and raised faculty salaries—not on the across-the-board basis many professors favored but on a market basis determined by the demand in different fields.
The Denver Post describes him as a “fiscal conservative with law and accounting degrees.” He served Colorado in the U.S. House of Representatives and later spent one term in the Senate, where he was a vigorous early advocate of work-based welfare reform. A star football player and student body president at the University of Colorado, Brown later served as a naval aviator in Vietnam. He will stay on as university president until a successor is named and is expected to take the helm of the fund in mid-summer.
Bill Daniels, founder of the Daniels Fund, was also a naval aviator and served in World War II and Korea. A philanthropist with a long interest in expanding opportunities for underprivileged youth, he and the fund are perhaps best known for the Daniels College Prep and Scholarship Program (profiled in the March/April 2000 issue of Philanthropy), which helps students in their junior year of high school. They are given college preparation workshops throughout their junior year and then an intensive summer program on a local college campus. As seniors, they are matched with mentors “who help ensure that they successfully complete high school and the college and financial aid processes.” The program currently operates in 41 high schools in Colorado and is expanding to serve students in New Mexico, Wyoming, and Utah.
Bill Daniels died in March 2000, and the Daniels Fund he established in 1998 is still receiving assets from his estate. When the transfer is complete later this year, it will total nearly $1 billion, making the fund Colorado’s largest private foundation. In addition to its college prep program, it funds programs in Colorado, New Mexico, Wyoming, and Utah in the areas of early childhood education, the elderly, homelessness, mental health, substance abuse, disabilities, and amateur athletics.
Its philosophy includes a commitment “to continual learning in order to recognize our mistakes and incorporate lessons learned into future efforts.”