The Foundation Center has attached some numbers to a truth that everybody in the nonprofit field already knows: foundation giving has continued to surge as the bull market roars on. In 1999, American foundations made a record $22.8 billion in grants, up over 17 percent from the year before. Grants from corporate foundations grew (for the first time this decade) faster than grants from private foundations. Corporate giving surged over 22 percent for the year (not coincidentally, the S&P 500 rose by approximately the same figure). Maybe it’s time to coin a new corollary for an old saying: What’s good for General Motors is good for philanthropy.
More “Micro” by the Minute
But no good thing lasts forever. On Wednesday, March 15, 35-year old MicroStrategy founder and CEO Michael Saylor was on top of the world. He made above-the-fold headlines and national network news by announcing his plans to donate $100 million towards the creation of an “online university.” This “Internet Ivy” would offer videotaped lectures by the world’s foremost scholars on a range of topics, all available for free via the Internet. But the following Monday it was shares in MicroStrategy that were taken to school, plummeting 140 points, or 62 percent, upon the revelation that the company was downwardly revising figures from a previous revenue report. The Washington Post reports that the one-day stock implosion knocked $6.1 billion off the personal fortune of Saylor, who laconically observed that it was just “paper wealth..I mean, it comes, it goes, right?” No word yet on whether he still plans on going ahead with the ambitious “Cyber U,” but it doesn’t seem unlikely judging by his response to the Post’s question about “how does it feel” to lose all that money: “It feels like nothing, actually,” replied Saylor, who is still worth over $3 billion.
School for Scandal
Many Americans no doubt watched the motley collection of nose-ringed protestors who disrupted the World Trade Organization (WTO) summit in Seattle earlier this year on TV and asked themselves the same question: Where on Earth did these people come from? Now we know. Reuters reports that a foundation-supported group calling itself “The Ruckus Society” has trained 2,000 people since 1995 “to raise hell in the name of social justice, human rights, and a sustainable environment.” The group schools would-be activists in “high-profile, confrontational, risky” tactics calculated to garner maximum media attention—and minimal jail time. Trainees learn how to scout a prospective protest site, rappel from buildings, and form human barricades. All good fun, but who actually pays for all this specialized training? Ruckus Society founder Mike Roselle, an “Earth First!” founder who once protested acid rain by illegally climbing Mt. Rushmore to drape a gasmask on George Washington, explains that in “our early years, we struggled for funding because there weren’t too many groups that wanted to work with us, because our specialty was breaking the law.” But those rough patches are a thing of the past. According to Reuters, the Ruckus Society now has a half-million-dollar budget to facilitate the 18 weeklong training camps it sponsors in the United States and Canada each year. Funding comes from foundations (40 percent), “individuals of means” (40 percent) and other nonprofit organizations. Is it worth it? Just ask Ruckus activist (and benefactress) Elaine Broadhead, heiress to a Chicago mail-order fortune who has hosted two training camps at her 150-acre estate in posh Middleburg, Virginia and who describes Ruckus as her “favorite group.” “They’re not loonies out painting signs, they’re extremely dedicated. They take risks too; it’s not just a lot of words,” says Broadhead.
The Scoop on Ben & Jerry’s
Like, no way dude! Ben & Jerry’s, the warm and fuzzy Vermont-based ice cream company that is as famous for its well-publicized progressive philanthropy as it is for such flavors as “Chunky Monkey” and “Cherry Garcia,” is “selling out” to multinational behemoth Unilever. According to Reuters, founders Ben Cohen and Jerry Greenfield will remain involved in the firm, and the parent company will “contribute 7.5 percent of pre-tax profits to the company’s philanthropic foundation.”
Who Wants to Be a Millionaire?
One of the best-selling business books of recent years was The Millionaire Next Door, which revealed that, contrary to popular myth, most American millionaires were modest-living small business owners who drove unassuming cars and watched their pennies. The recently-released triennial Federal Reserve survey of household wealth confirmed that the number of “average” American millionaires has been growing. Still, given the notoriously fretted-over low savings rates of average Americans, the results of a recent survey reported on in Business Wire come as something of a surprise, albeit an encouraging one. The surveyors asked the typical man in the street: “How would you spend a million dollars?” (respondents were allowed to name three things):
“Pay off debts or bills”………50%
“Donate to charity”…………48%
“Buy a bigger house”………32%
“Splurge on luxury items”…23%
Say It Ain’t So, Sammy!
Chicago Cubs outfielder “Slammin” Sammy Sosa is himself being slammed by critics who complain that the charitable foundation bearing his name has been neither charitable nor even much of a foundation. Fortune magazine reports that the Sammy Sosa Charitable Foundation, founded in 1998 to help hurricane victims in Sosa’s native Dominican Republic, is now “broke and in disarray.” Despite the fact that the popular Sosa is in the middle of a four-year $42.5 million contract, records indicate that he has never been much of a contributor to the foundation that bears his name. One of the organization’s founders, Arturo Sandoval, now alleges that Sammy used foundation funds to buy a sports car for his brother. Sandoval, who was also retained as a paid consultant by the foundation, has since been fired, according to Forbes, but contends that “someone has to clarify with Sammy that he cannot take charitable contributions from the United States and directly deposit [them] into his business account in the Dominican Republic.” (A current foundation director dismisses Sandoval as “a disgruntled employee.”) In the meantime, thousands of pounds of relief supplies collected by the organization languish in warehouses until the foundation’s finances and management are brought back to something resembling major league shape.
Lucky Numbers (Part I)
Who says there are no second acts in American life? When he was playing linebacker for the Dallas Cowboys in the late 1970s, Thomas “Hollywood” Henderson was known as much for his big mouth and his off-field brushes with the law as he was for his football playing. After being arrested in 1983 for smoking crack cocaine with two teenage girls and being sentenced to prison for over two years, Henderson seemed destined to be remembered as yet another former athlete who had been laid low by drug addiction. But Henderson managed to get off drugs and get his life together, and has spent the last decade working in relative obscurity for community development programs in his hometown of Austin, Texas. Relative obscurity, that is, until last month. Henderson bought the winning ticket in the $28 million Texas lottery jackpot drawn on March 22, and plans to use his winnings to support his charitable work: “I’m just going to continue to do the charities that I do, take care of my children, and buy my momma a Town Car.”
Lucky Numbers (Part II)
Such lottery-generated charitable largesse is also in evidence north of the border, where just a week earlier a Canadian man found out just how rewarding charitable giving can be. Sixty-one-year-old Gerald Swan of the tiny Ontario town of Orton had been giving to charity since he was a teenager, and thought his modest $100 (Canadian) contribution to the Heart and Swan Foundation was just that—a contribution. Actually, it purchased him a ticket in the foundation’s lottery—netting Swan an unexpected $1 million. Generously enough, he plans to give the winnings back to charity, reasoning that since he had bought the ticket planning to give the money away, “now I can give $1 million . . . I have lived a good life, God has looked at me favorably, and I got a gift—it is my full intention to give it back.”
Triumph of the (Donor’s) Will
It has been a very rough patch indeed for the Allegheny Health, Education, and Research Foundation (better known as AHERF). Pennsylvania’s largest nonprofit healthcare provider spent 1998 trying to stave off bankruptcy proceedings—with ultimately disastrous consequences both for the institution and now for some of its executives. In March, according to the Pittsburgh Post-Gazette, three of the top executives at AHERF were arraigned by the state Attorney General for misusing $52 million that had been designated for charitable purposes. The funds had been designated by donors to be used for scholarship and other specified charitable purposes, but were redirected by AHERF executives to be used to pay mounting bills and day-to-day expenses. If convicted, the executives face up to 17 years in prison. Perhaps the only good that can be said to have come from the ordeal is what might be described as a reinvigorated sense of respect for donor intent.
Infecting with Kindness
Sometimes charitable intentions turn out to fall quite a bit short of charitable donations, witness a recent story in the Village Voice about ever-popular “gifts” of used (read: obsolete) computers. A New York teacher asked a number of corporations for help with computer equipment for her students’ filmmaking class. Investment banking firm J.P. Morgan graciously donated seven old computers. But the computers were so old that the students had to spend considerable time and money equipping them with the most basic components. When they finally got the computers up and running, they learned to their horror that the systems were infected with computer viruses that destroyed their projects. Donee emptor?
Good Intentions Not Enough?
The Thomas B. Fordham Foundation has just released a report that analyzes the results achieved by Walter Annenberg’s much-publicized $500 million gift to American public schools. The report’s conclusions: Not much. “Maybe there’s a place in America where Annenberg’s gift made a big difference,” says Fordham Foundation president Chester E. Finn Jr., “but in the giant urban school systems where most of the money went, the system swallowed, said ‘thank you,’ and went on pretty much as before.”