Oh, Rigoberta Menchu!
In 1992 the Nobel Peace Prize was awarded to Rigoberta Menchu, a Guatemalan Indian woman famous principally for her testament I, Rigoberta Menchu, in which she is portrayed as an oppressed yet ultimately triumphant victim of classism, racism, colonialism, and of course sexism. Proceeds from the award were used to start the Rigoberta Menchu Foundation, a public charity with branches in New York, Mexico, and Guatemala. But now it turns out that the book (required reading at many American colleges) is largely made up, and was not written entirely by Menchu. The Nobel Committee has indicated that it is not reconsidering its award, but potential donors to the foundation might want to do a little fact-checking before writing any checks.
Something from Nothing—and Quickly
Most foundations are funded with donations of appreciated stock, usually the result of a donor’s lifetime of work. But in Silicon Valley, where 30-year-old billionaires are considered “old money” if their IPOs came out more than a year ago, the fortunes of a new breed of foundation can appear (or vanish) overnight. eBay, an Internet auction firm that has been one of this year’s hottest IPOs, saw its share price rocket from $18 in late September to around $300 at press time. Interestingly, before their IPO eBay gave more than 100,000 shares of its stock to the nascent eBay Foundation. The value of the Foundation’s assets—it still has not finalized which causes it will support—now stands at roughly $30 million.
Whose Intent Is It Anyway?
When Charles L. McCune established the McCune Foundation, which made over $23 million in grants in Western Pennsylvania in 1997, it’s hard to believe he could have foreseen the turmoil that his generosity would occasion. Mr. McCune named Union National Bank (of which he had been CEO) as trustee of the foundation, and intended that his brother Marshall become co-trustee. But Marshall died soon after McCune, in 1979, and another family member was never named to the co-trustee position. Now National City Bank, successor to Union National due to a series of mergers, has informed the McCunes that it will not consider “now or ever” filling the co-trustee vacancy. National City, which pays itself a tidy $400,000 per year in fees from the foundation, has also consistently refused to grant a role to the heirs of Mr. McCune in overseeing the foundation’s finances. A cross-section of prominent Pittsburgers has recently formed the Committee of Legitimate Concern to work with National City and McCune’s heirs to resolve the matter.
Them That Has, Gets
Hard to believe, but the J. Paul Getty Trust, with assets of nearly $5 billion, is discussing a proposal to start fundraising. The Los Angeles Times reports that Getty president Barry Munitz (recently tapped to lead California Governor-elect Gray Davis’s transition team) is considering a variety of fundraising options, including establishing special paid memberships at the Getty Villa in Malibu and corporate sponsorships for exhibits. Some in the art world are worried about the prospect of competing with an 800-pound gorilla. Andrea Rich, president of the Los Angeles County Museum of Art said, “Obviously I’m disappointed. The philanthropic pool of the arts is not very abundant. I would have hoped they would add to the pool rather than take away from it.”
Putting Charitable Pitches on Hold
A recent survey shows general skepticism toward mail and phone solicitations from nonprofits. While over 80 percent of those surveyed reported having made a charitable contribution during the past year, two-thirds had doubts that the person on the other end of the line “really represents the organization they say they do.” According to the survey, conducted by the AARP, 79 percent said they were “not very likely” or “not at all likely” to respond to such solicitations. Despite the skepticism, only half of those who do respond to these solicitations actually ask how their money will be spent.
Harvard University has announced that it will bump up by “at least 20 percent” the amount of its endowment earnings devoted to operating expenses. This increased percentage comes on top of the market-beating returns (an annualized 20 percent over five years) that Harvard has achieved. A small adjustment might not make news, but when the asset base is over $13 billion, it translates into approximately an extra $100 million available each year for financial aid, equipment upgrades, faculty support, and research. Harvard’s endowment was off by roughly $1 billion during the recent market slump, though it has since bounced back.