Open Wallets to Afghans
Although the precise amount is unclear, tens of millions of dollars are being donated to aid civilian Afghans, according to the Associated Press. The best-known instance is the request President Bush made to American children to give a dollar for their Afghan peers; more than $1.5 million in donations has been raised. American youth also collected around $4 million for Afghanistan during the annual UNICEF Halloween drive. And Jeff Meer, executive director of USA for UNHCR (the U.N. High Commissioner for Refugees), says that his group has raised about $1.6 million for Afghans and that the money has poured in faster than in any other refugee crisis except Kosovo. The Associated Press also cites workers at the And 1 basketball apparel company of Pennsylvania, who raised $300,000 for attack victims and decided to send part of it to victims’ families, part to local charities, and $50,000 to Afghans in need.
Making Vaccinations His Business
Bill Gates runs his $24 billion foundation in ways similar to his “famously hardball business tactics,” writes the Wall Street Journal. Specifically, “many of the projects provide financial incentives to the private sector and impose tough performance targets on all participants.” In the case of the billion-dollar Global Alliance for Vaccines and Immunization (GAVI), three-quarters funded by the Bill and Melinda Gates Foundation, recipient countries are required to improve both their records of child vaccinations and also their actual rates of immunization in order to continue receiving funds. Critics object that rural Kenya can’t be expected to keep accurate records, and the Journal repeats complaints that drug companies are “playing too large a role” in the effort. The paper also lambastes UNICEF for using dubious statistics to claim in 1990 that its targeted 80 percent vaccination rate had been reached. The agency then began shifting funds toward “more pressing needs” like “children’s rights.” By 1998 spending on vaccinations was less than a third of 1990 levels, vaccination rates were plummeting, and 3 million people a year were dying of preventable diseases.
Large Charities Block Funds
Fidelity Investments Charitable Gift Fund collected $1.1 billion last year, second only to the Salvation Army in American charities, but it won’t be sending a penny of its donor-advised funds to several prominent Islamic relief groups for fear the groups have connections to terrorist organizations. Two smaller funds run by Charles Schwab and the Vanguard Group told the New York Times they have also put certain Islamic charities on their “watch lists” of verboten groups. One of the charities, the Holy Land Foundation, had its assets frozen recently by the U.S. government, but the other charities on the watch lists have not been legally sanctioned, though the Treasury Department has them under scrutiny.
Chester E. Finn Jr. of the Thomas B. Fordham Foundation (and a Philanthropy Roundtable board member) throws cold water on Microsoft’s agreement to donate over a billion dollars’ worth of software, computers, training, and cash to schools that serve low-income children. “Despite the ‘billion dollar’ hype,” he writes in the Wall Street Journal, the after-tax cost to the company will be around $375 million. And the deal has other “dubious features.” For one, “it strengthens Microsoft’s quest for dominance in the school computing market—one of the rare domains where rival software makers have given the giant firm a fight.” But “most important” of all, the settlement is unlikely to help America’s most disadvantaged schools: “Lack of technology is not the main problem these schools face,” but rather a dearth of excellent teachers delivering a curriculum that demands high standards. Ironically, “some of the Microsofties know this. The Bill and Melinda Gates Foundation sponsors a number of promising low-tech education reform efforts, such as replicating successful schools and replacing vast, impersonal high schools with smaller units.”
In 1987, Avron Fogelman made news when he declared he would pay the college tuition of any low-income Memphis public school student who signed a contract agreeing to meet a few basic requirements. Thousands of students and parents signed up, but since Fogelman’s first scholarship students began attending the University of Memphis in 1994, only 13 students have graduated and only 33 are currently enrolled, school officials report, despite 194 students leaving high school as Fogelman scholars and 125 enrolling at the university. “I am so disappointed,” Fogelman tells the Memphis Commercial Appeal, “but not discouraged.” Students are eligible beginning in tenth grade and need only maintain a 2.75 grade point average, stay out of trouble, work on two service projects a year, write a 500-word essay, and turn in letters of recommendation. “I’m trying to make it so easy,” Fogelman says; over the years he’s raised the income limit and offered textbook stipends on top of tuition.
Hef, Playmates, and Players
A little-known secret of the L.A. fund raising world: The Playboy Mansion can give your cause real sex appeal. As the New York Times puts it, “the mansion is one of the most lucrative places for established, buttoned-down philanthropies.” Groups that have sampled the mansion’s wares include the Cedars-Sinai Medical Center Diabetes Outpatient Training and Education Center, which has held a tournament on the tennis courts for 20 years, and the UCLA UniCamp for children. The latter group said it raised “five times as much profit at the mansion than at the year’s previous event, at a prominent museum.” A 500-guest event can cost $40,000 to $60,000, including food and tents. If desired, “cavorting Playmates” are available at $500 each for four-hour shifts (six to eight mates are recommended for 500 guests). The 31-room house itself is off limits, but the 5.5 acres of grounds offer a tropical forest, aviary, zoo, swimming grotto, and tented dance area. Groups intrigued by the possibilities should sign up soon: The mansion currently has a waiting list.
Giving for a Cure
The $150 million that New York clothing magnate Sidney Kimmel recently gave Johns Hopkins University’s cancer center was the largest gift in the school’s history, but Kimmel wasn’t just looking for headlines. “He wants to give away all his money to help find a cure for cancer,” Hopkins oncologist Curt I. Civin tells the Baltimore Sun, and he’s not just writing checks. Two years ago, Kimmel had a long meeting at the medical school with presentations by over a dozen cancer researchers who argued that their work at Hopkins was on the cutting edge. “Although he has no formal medical education, Kimmel fired back with pointed questions, Hopkins administrators said.” Then, after deliberating two years with his own scientific consultants, Kimmel concluded that his largest gift—his foundation has already endowed three other cancer centers around the country—should go to Hopkins. In a separate article, the Sun chronicles Kimmel’s dramatic life, from his impoverished childhood as the son of a Philadelphia cabbie, to a fashion industry billionaire, to a philanthropist who insists “he plans to give every last bit of it away.”
Scripps Howard columnist David Yount takes a less than optimistic view of the future of giving. He cites Harvard sociologist Robert D. Putnam’s fear that “a nation of joiners has slowly become a society of individuals going it alone.” Yount emphasizes that “nearly half of all social memberships in America remain faith-based, and half of all personal philanthropy and volunteer work is still church-related.” Yet churchgoing has been steadily declining over the past 40 years, with the famous claim that roughly half of Americans worship weekly turning out to be wrong. The decline is not only in absolute numbers but “generational.” Americans over 60 slightly increased their church attendance from 1960-90, but one estimate reckons that two-thirds of Baby Boomers raised in a religious tradition dropped out in early adulthood and fewer than half returned in middle age. Nine percent of Boomers entering college in 1968 said they “never” attended church; three decades later, 18 percent of their children entering college say they have “no involvement whatsoever in organized religion.” To Putnam, these numbers signal a country “becoming ever more clearly divided into two groups—the devoutly observant and the entirely unchurched.”
Private Giving, Public Schools
After officials at Chevy Chase Elementary School in Maryland rejected the elaborate renovation plans that a group of parents and neighbors had proposed, the parents started their own nonprofit, raised $200,000, and “paid for the extras themselves,” the Washington Post reports. Now the county school board is considering a policy that would explicitly approve of this common but extra-legal practice. Some critics, however, object that the policy will mean public schools in affluent neighborhoods will enjoy unfair advantages: “It just seems so un-American,” says one school board member. “This policy sends a message that not every child is equal.” State and national PTA groups also frown on such funding: “We know it happens,” national PTA president Shirley Igo tells the Post, “and I understand parents want what’s best for their child.” Igo, however, “wants parents to advocate for things at every school rather than providing for one small, select group of students.” By contrast, school board member Stephen N. Abrams notes that private funds for wealthy schools free up tax dollars that can be sent to poorer schools: “You’re going to see this regardless of a policy,” he says, “so why not increase the size of the pie?”
Lawrence Lindsey, director of the President’s National Economic Council, writes in the Pittsburgh Post-Gazette that America’s capitalist ethos helps explain the country’s generous giving to victims of September 11 and others in need. Capitalism, he writes, “is the ideology of building up.” By contrast, “the ethic of communism or socialism works to undermine humanitarianism. If one is told that the state will care for the needs of the individual, individuals are absolved from the responsibility of caring for their fellows.” This was brought home to Lindsey when he visited Romania a few years ago to adopt a daughter. When an American at the embassy gave food and cash to a neighbor’s widow and children, “her Romanian employees were furious,” insisting that the family was none of her business but solely “the state’s responsibility.” Christianity, Judaism, and Islam all teach individual giving, he concludes, and “there is no collective short cut.”
New Money Follows Old
Already home to idiosyncratic media tycoon Ted Turner and businessmen like J. B. Fuqua, J. Mack Robinson, and Michael C. Carlos, Atlanta is now beginning to take its place at the forefront of American philanthropy. Two donors just becoming prominent are Home Depot co-founders Bernard Marcus and Arthur Blank, worth billions between them. The Atlanta Journal-Constitution reports that they’ve stepped down from day-to-day management of the company, “pledging to dedicate their time and money to philanthropic and civic causes.” Marcus, for instance, is donating $200 million to a state-of-the-art aquarium, and Blank is putting $15 million toward a new symphony hall. Marcus has repeatedly pledged he’ll give away most of his wealth in his lifetime, but says giving it away is as hard as making it. “You have got to make sure that the trustees that follow you” don’t give money “for their own aggrandizement, that they follow the vision of their founder, even from the grave.” The home improvement tycoon added, “We can’t solve the problems of the world. My name is not Ted Turner. We are very focused on entrepreneurship, children causes, medicine, and Jewish causes. The aquarium is my gift to children.”
Playing the Slots
“Much of the way philanthropy does its business is dysfunctional,” argues one veteran philanthropist. In a thoughtful recent speech, Edward Skloot, executive director of the Surdna Foundation, a New York-based family foundation, said that philanthropists resemble “gamblers playing the two-dollar slots in Vegas . . . We sit straight ahead, rarely pulling our eyes away from the spinning icons. We don’t interact with the other players on our left or right. If we did, we wouldn’t learn much anyhow—they’re behaving in just the same way.
“Much of philanthropy, especially at the 100 largest foundations…works in isolation, rarely sharing the task or the results,” Skloot continued. “We make grants based on inadequate due diligence, partially relevant information, or simple intuition. After a grant is made we rarely share what we really know—‘the good, the bad, and the ugly’—with grantees or with our own colleagues…We don’t usually measure our successes, course-correct, and learn intentionally.”
Citing research by Peter Frumkin and Mark Kim of Harvard University and Jed Emerson of the Hewlett Foundation, Skloot argued that in all too many funding decisions, “the effectiveness of grantees seems to have little relevance.” He claims that a “massive undercapitalization of nonprofits” results from “widespread fragmentation of effort, poorly targeted dollars, and inadequate communication [with grantees] bordering on secrecy.”
“Serious research [in philanthropy] is still a rarity,” said Skloot; and “research relevant to the broad interests of the sector is even more rare.” Moreover, “in philanthropy there’s no need to be externally accountable, and no sanction from the marketplace, so there’s virtually no incentive to improve, individually or as a group.”
Skloot said it doesn’t have to be this way. “We can learn to collaborate among ourselves and with our grantees and, as they say, ‘leverage’ one another.” He cited examples of promising “funding collaboratives,” some with comprehensive websites. One need not agree with the ideological direction of Skloot’s favorite collaboratives—such as the Funders Network on Smart Growth and Livable Communities—to learn from their efforts to “make grant making more predictable and supportive of grantees [and add] regularity and consistency and sometimes a focus on outcomes.”
Skloot recommended that funders map the money flows—governmental and private—in specific fields. “This is seldom done, causing redundant or ineffective grant making. An obvious case is the field of educational reform in numerous cities. Here, more philanthropic and corporate money has been spent less effectively and more idiosyncratically than any field I know of.”
Skloot also urged funders to aim at “co-creating value” with their grantees. As a model, he cited Sumerset Houseboats, the world’s largest houseboat manufacturer. “Boat buyers engage in continuous interaction with the manufacturer. The two also build a relationship. The customer has access to the accumulated data of other buyers, as well as the company’s resident experts…All are involved in a continuous dialogue.”
If foundations are to be information resources and relationship-builders more than mere grant makers, then they need to look for different kinds of program officers and CEOs. “Knowledge of the field,” maturity, and “ability to collaborate” are as important as ability to analyze grant proposals.
Skloot’s speech was the inaugural address of the Waldemar A. Nielsen Issues in Philanthropy Seminar at Georgetown University on October 5, 2001. To read a full version of the speech, go to http://www.surdna.org/speeches.html.