Anyone wondering whether 100-hour weeks pay off should consider this resume: senior partner at Salomon Brothers, Treasury Secretary during the Nixon and Ford Administrations, the nation’s first “energy czar,” a successful pioneer in mergers and acquisitions, founder of a family merchant bank, board member of numerous Fortune 500 companies, and best-selling author.
And yes, they really were 100-hour weeks. William E. Simon, 72, refers back to his years in the Nixon Administration as an “endless race” requiring “the speed of a sprinter and the endurance of a marathoner.”
Simon has also had a 35-year involvement with the U.S. Olympic Committee, which included a four-year term as president, spanning the aftermath of the 1980 Olympic Boycott through the Los Angeles Games in 1984. (To this day, the ’84 Games remain the only one in the history of the Olympics to actually turn a profit.) That profit was then directed by Simon into a new U.S. Olympic Foundation to support Olympic athletes. In over three decades with the USOC, Simon helped build the organization’s endowment from nothing to more than $240 million and led the USOC’s move from New York to a new home in Colorado Springs, complete with a state-of-the-art training facility. In the process, he had a profound impact on the modern U.S. Olympic movement.
Friends and acquaintances know that Simon’s philanthropy coexists with a business-bred insistence on results. “We work terribly hard at the Olin Foundation. I like to get things done,” he says, in what staff and grantees probably view as something of an understatement.
Archbishop Theodore E. McCarrick of Newark, a friend since Simon’s days as Treasury Secretary, puts it this way: “There are two sides to his personality. He is a very determined and demanding businessman, but the other side is that there is a real inner need to reach out and help other people, a side that is nourished by faith.”
As one would expect, both sides show up in Simon’s philanthropy. Beginning in the late 1970s and through the 1980s and 1990s, he focused the grant programs of the John M. Olin Foundation on building the intellectual basis of conservative thought and on buttressing the intellectual underpinnings of the free enterprise system. In this past decade, Simon’s own personal charitable work has become more pronounced as he has dedicated more of his time to working on his own foundation, the William E. Simon Foundation, and in giving of his own time to those in need.
It is this latter bent that is arguably the more deeply rooted, dating back to the 1960s when Simon made small grants for scholarships and would take his young family down to New York City’s Covenant House, a home for runaway children, to work on what he calls the “chow line.”
Says Simon: “While writing checks for charities is necessary and important, it cannot compare in importance with the corporal works of mercy, which are infinitely greater. Your time, your energies and, most especially, your love are the greatest gifts you can give.”
Simon is quick to locate the impetus for his career of charity in his Christian faith, a faith which was not always nourished during his intense career. “But,” he says, “as I have strived to commit myself to Him, not just once a week, but every day, by offering my time, my wealth, and my willingness to do whatever is the task at hand, I’ve begun to discover His presence in many different places and many different ways.”
If all goes according to plan, a number of charities are about to discover William Simon’s presence as well. In keeping with Andrew Carnegie’s statement that the “man of wealth” should be a “trustee and agent for his poorer brethren,” Simon is giving away virtually his entire fortune—roughly half a billion dollars—to the William E. Simon Foundation. In addition to himself, the foundation’s board consists of his seven children, James Piereson (also executive director of the Olin Foundation), and attorneys Dan Mosley and William Wachenfeld.
Philanthropy interviewed Mr. Simon at his New York City office.
PHILANTHROPY: In a recent Philanthropy interview, Peter Drucker observed that perhaps “the idea that foundations should be around forever is a mistake.” What is your view?
MR. SIMON: I don’t think there’s any “perhaps” about it. Our foundation has a defined life to it, and John Olin wanted that to be my lifetime. I told him, “John, please give me a date.” He said, “You figure it out.” Anyway, we are on a schedule of phasing out the Olin Foundation over the next five to seven years. And we still have over $100 million left.
I have placed a similar sunset provision on the William E. Simon Foundation. The foundation has already given out more than $90 million, and we will eventually give out in excess of half a billion dollars. I have asked that the foundation’s work be complete by the end of the lives of my sons Billy and Peter, who are in their late 40s now. I have built some incentives into the foundation to make sure they do that, in the form of a lead trust that will start the day I die. There is a very complex process by which my children can recoup part of the trust, but only after all the foundation’s money has been given away.
PHILANTHROPY: Is this lead trust arrangement something you would encourage for other donors?
MR. SIMON: It would work for any foundation that is large enough. Of course, some people don’t believe in giving money to their children. I have watched it in my family, and I have watched it in many families, and I think it’s often a bad idea. Let’s just say that I am in the process of making the same mistake, but I am making sure that they work for it.
PHILANTHROPY: Should Congress require foundations to spend down?
MR. SIMON: Absolutely not. You pass a law, and the bureaucrats at IRS and Treasury go to work on it, and pretty soon nobody can understand it.
PHILANTHROPY: What was your relationship with John M. Olin?
MR. SIMON: John and I spent hundreds of hours together, at his home in East Hampton, and summers hunting down in Georgia. He was a great patriot, and wanted the principles and ideals that gave this country the greatest freedom and prosperity in the history of mankind to perpetuate themselves. One of my roles here is to be the interpreter of John Olin’s philosophy. We get thousands of grant requests a year. Some are so far away from our mandate that we don’t have a full-scale discussion, but the ones that do make the first muster first have to go through the staff and me, and then to the trustees. Whenever I review a grant request I ask myself, “Is this something that John would have liked?” We have generated our share of controversy over the years. Conservative foundations always do. But when I look up at John’s picture I think he’d be smiling, because we took ’em all on.
It’s remarkable how much the political climate has changed in the decades since I accepted John Olin’s offer to head his foundation. Twenty years ago, the accepted wisdom was that government, taxes, and regulation were necessary to manage the economy and promote a responsible rate of economic growth. That was a recipe for disaster, and it led to the economic calamity we had in this country in the late 1970s and early 1980s. Today there is a far greater appreciation for markets and the benefits of the free enterprise system, the very system that has produced the greatest prosperity and economic growth man has ever seen. It’s clear to me that the work of the John M. Olin Foundation and the scholars, writers, and thinkers we have supported are at least partly responsible for the change. And they have succeeded because they have focused on what works and on results.
I should point out that we are spending very aggressively on grants [at the Olin Foundation]. We are spending about $20 million per year on grants, or about 20 percent of our assets, compared to the legal minimum of 5 percent which most foundations spend. This is part of our plan to spend ourselves out of business over the next several years. I should also say that we are doing this very carefully. There is keen competition for our funds, and we are trying to support only the strongest programs.
PHILANTHROPY: This question of donor intent is more than a theoretical discussion for you. You were involved in a protracted board struggle with the late J. Roderick MacArthur, the son of MacArthur Foundation founder John D. MacArthur. The father was a successful businessman who caricatured environmentalists as “little old ladies and bearded jerks.” The son was a self-proclaimed draft dodger who founded the Chicago chapter of Republicans for McGovern. What was the struggle like, and what lessons do you draw from it?
MR. SIMON: It was the most frustrating experience of my life because I knew Catherine MacArthur and I had communicated with John MacArthur. After John MacArthur’s death, Catherine called and asked me if I would go on the board, and so I went down to Florida and met with her for half a day in her apartment. She told me that she wanted the MacArthur Foundation to have the same mandate as the John M. Olin Foundation, which I had written about in my book, A Time for Truth.
Well, the MacArthur Foundation, when I stepped in, was a very contentious place. Rod MacArthur was on the board. He hadn’t spoken to his father in 30 years, but the lawyers put him on the board because they were afraid he would sue if they didn’t. He came up with that idea for the “genius” awards. I try to bring levity to my work, so I applied for the first grant. However, I was summarily turned down! They all went along with Rod MacArthur because they didn’t want to antagonize him. We had a wonderful president, John Corbally, who had been president of the University of Illinois, but despite his best efforts, he was unable to bring order to that board. And as a result, the MacArthur Foundation lost its ability to do what its founder wanted it to do.
PHILANTHROPY: Shifting gears for a moment, the William E. Simon Foundation’s bylaws require your children to do several hours of volunteer work to keep their seats on the board. You volunteer generously of your own time, for example bringing Holy Communion to AIDS patients at the Terence Cardinal Cooke Health Care Center, and comforting the sick at the Memorial Sloan-Kettering Hospital. You yourself have said that such personal service—what Catholics like yourself call “corporal works of mercy”—is “infinitely greater” than giving away money. Why is service so important? Should all donors make time for service?
MR. SIMON: If you just limit your giving to writing a check, there’s not much satisfaction in that. When I started giving money away in the 1960s, I gave to Covenant House, mostly for poor people, mostly for scholarships. I could only give a small amount, but then I would try to go out and round up matching funds. When my children were still in high school and college, I would have them go down and see those kids at Covenant House. Those kids at Christmas all had presents, they all had loads of things, but they never had much love, they never had much family.
Should donors make time for service? Absolutely. I’ll make time. It’s the most important thing I do. My children are required to work somewhere each week to keep their seats on the board; they need to accumulate 150 hours of service each year. All seven of my children are active in their own charitable work. Billy is head of Covenant House in Los Angeles, is on the board of Williams College, and is going to be head of Catholic Charities in Los Angeles. Peter has been on the boards of various charities including the Gladney Center in Dallas, which is a wonderful organization that helps expectant mothers and places children with adoptive families. My daughter Leigh started a wonderful charity, Happiness Unlimited, that organizes trips and vacations for terminally-ill cancer patients. She would call up the hotels and get the rooms for free, she would call the airlines and get free tickets from the airlines. If you work at it, you can make a dollar into five or ten or fifteen. People want to help, they truly do.
PHILANTHROPY: You have said that there is room for more service-related work by the laity in the Catholic Church, that there is a willingness to be more involved in church affairs, but that you “have not seen great enthusiasm for this idea in some of the local parishes” you have visited.
MR. SIMON: I feel very strongly about that, because people get discouraged. I have spoken to many dedicated Catholics who would be willing to work on behalf of the church, but all they want you to do is “pay, pray, and obey.” When you get down to the pastor level, and even the diocesan level, people are very jealous of their prerogatives.
PHILANTHROPY: Is public service as important as philanthropic service?
MR. SIMON: Absolutely. When asked, I am horrified that anyone would turn down a chance to serve in government. I think it’s our responsibility as Americans. I had a big job at Salomon Brothers as one of the managing partners before I was Secretary of the Treasury. I gave up a lot. Then again, I loved being a private in the infantry.
PHILANTHROPY: Are you worried about the current cynicism about government service?
MR. SIMON: It waxes and wanes. I think the American people still love their country.
PHILANTHROPY: What about the relentless criticism and exposure of public figures?
MR. SIMON: I’m pretty sensitive about that because I’ve seen it happen. I’ve known people whose marriages were shattered because their wives couldn’t take it any more. The person wanted to stay in government, but his wife would be in tears reading some nasty article about her husband. But you know, you can go back to the time of Washington and Lincoln and it’s never been any different, though today the intensity is magnified by television.
PHILANTHROPY: People who know you say you are a perfectionist, and that you are demanding with your grantees—that you expect efficiency and results. Guilty as charged?
MR. SIMON: Well hands-on is the most important possible thing in charity. John Olin said any fool can give money away; it takes a smart man to give it away intelligently. In philanthropic giving, the risk is that people are going to waste it. And we’ve had that happen. But not often, and never twice. We expect the same kind of efficiency from our grant recipients as we expect from ourselves. I am a man who keeps the ball moving down the field. We have books four inches thick for each trustees’ meeting. We work terribly hard here. I like to get things done.
PHILANTHROPY: You do all that work with a very small staff. In so doing you are bucking a 30-year trend among foundations toward larger—some would say bloated—staffs. Is there an advantage in smallness?
MR. SIMON: Absolutely, because people are working together. You go to some foundations, and the staffs are so large that you can’t find the right person to answer your question. That’s not an efficient way to run any organization. I care about efficiency. And we can do our jobs better with a small staff where everybody is in on everything, where we all talk, and where we agree and disagree. I get proposals where the staff is split in half, and the trustees get to see all that. And we have the same kinds of debates in the trustee meetings.
PHILANTHROPY: When you look back on your charitable giving through your family foundation, which grant has given you the most satisfaction over the years?
MR. SIMON: All of our scholarship programs, and we have supported a great many of them. The doorman in my building holds down three jobs because he adopts children every chance he gets, and he educates them all in private Catholic schools. Those schools cost as much as $2,500 a year. There’s no kind of philanthropy more satisfying than helping someone like that. Also, I am very positive about the program we have at Morristown Memorial Hospital, where we give money to help people who are sick get through the financial crisis that can cause. That stemmed from my Eucharistic ministry. You have a fellow in the hospital who has lost his arm. He’s never going to be able to work again. The family needs some immediate financial help. We never give more than $3,000, but often it is enough to help them get by. We have spent over $1 million on that program. Boy, you can really help people in that kind of situation. And we have worked with many other organizations that we are proud to support.
PHILANTHROPY: Speaking of scholarships, there’s been a split among some conservative donors about the attractiveness of giving to higher education. They feel that it’s a lost cause, because colleges today are so liberal. The John M. Olin Foundation hasn’t taken that view.
MR. SIMON: No, and we won’t. From the beginning, we have had an interest in funding good programs at very selective colleges. We have been successful in getting law and economics programs started at many of the top law schools. We are very particular in what we support, and we won’t fund programs that undermine the free enterprise system. We give to Harvard University, to the John M. Olin Center for Law, Economics and Business, which is a very substantial and important program. And to name it after John M. Olin is something that wouldn’t have occurred 20 years ago. We also give to Yale, Berkeley, the University of Chicago, Cornell, [the University of] Virginia, and Columbia. These are the top schools in the country, and our programs are reaching the next generation of American leaders. But, again, as I said, we are very selective in the programs we fund. But no, we are not going to give up on higher education. We’d like to change it.
PHILANTHROPY: You have observed that some foundations—particularly corporate foundations—seem to be out to undermine the market economy which made them possible in the first place.
MR. SIMON: Yes, corporations have this habit of supporting their own demise. I used to make a habit of asking corporate officers and trustees why they were giving money to the very people who seek to destroy capitalism and free markets in this country.
PHILANTHROPY: What was the reaction?
MR. SIMON: Corporations were upset at my stridency. They would say, “We’re not guilty of that.” And I would pull out their list of grants, which were, sure enough, to all of the typical anti-business organizations. They didn’t find that to be very friendly, especially since I sat on some of their boards at the time. I have always believed that those who have been successful in business should aim to strengthen the system that made their wealth possible so that future generations will have the same freedom to create and compete. Some people have found this controversial. I can’t for the life of me understand why.
PHILANTHROPY: You raised a great deal of money from corporations when you were on the board of the U.S. Olympic Committee. What do you think about the recent scandals involving the International Olympic Committee? Have they hurt the Olympics?
MR. SIMON: The corruption is a problem I warned the IOC about years ago, but I think the Olympics continue to captivate the American people. These problems will be ironed out in time.
PHILANTHROPY: How did the U.S. Olympic Foundation come into existence?
MR. SIMON: In 1968, I was made the first chairman of the national fundraising committee. At the Mexico City games, I hired Don Miller, who was then a full colonel in the Army. He retired to come on board and fundraise. We had a dream of one day establishing a foundation that would support the training of Olympic athletes. Our goal for the first four years was $5 million, a sum I was told was wildly unrealistic. We raised $8 million. It was then that I realized that the American people and our businesses were eager to support the Olympic games. When we were awarded the 1984 Games in Los Angeles, we set the goal of running the Games at a profit. This was unheard of at the time. After all, the ’72 Games in Munich and the ’76 Games in Montreal had suffered huge losses. And when we succeeded at generating a profit in 1984, the proceeds were used to create the U.S. Olympic Foundation. The assets have now grown to over $250 million.
PHILANTHROPY: A lot of money is going to be invested in philanthropy over the next few decades. Microsoft founder Bill Gates, for example, has already given $22 billion to his foundation, most of it in the past year, and he has pledged to leave “most” of his fortune to a foundation. Any parting thoughts on the state of the field?
MR. SIMON: I think Bill Gates ought to rethink that, because that is a powerful amount of money. He ought to think about earmarking a lot of it while he is still alive, to educational programs or even to start his own educational institution. But giving away that amount of money is a huge challenge, and few people are up to it. It takes more time than you realize.
PHILANTHROPY: Do you have any advice to give to those who are engaged in philanthropic and charitable work?
MR. SIMON: Philanthropy is a highly personal endeavor, and it would be presumptuous of me to tell anyone what he or she should do with his or her money. Having had the experience of heading two foundations, and serving on the boards of a number of others, I have learned that giving away money properly is very difficult and it requires a great deal of attention, time and effort. I will say this: Milton Friedman has made the point, and I agree with this one 100 percent, that philanthropy is a challenge, and that a businessman needs to give as much care to his philanthropic decisions as he gives to making capital investments. A businessman should establish a clear focus for his grantmaking, and constantly evaluate and monitor his programs to make sure that they are succeeding. Just as in business, his philanthropy should be judged by results, not by intentions. He should minimize bureaucracy and “middlemen,” and find ways to get his money directly into the hands of people in need. There is great wisdom in Andrew Carnegie’s essay, “The Gospel of Wealth,” which makes the point that philanthropy should be a means to “help people to help themselves.” Our main goal should be to give all of our citizens the tools to work, to compete, and to give back to our society.