Idea-based Philanthropy in New York City

A Donor-assisted Urban Turnaround

  • Local Projects
  • 1996

Beneath its sometimes rude exterior, New York City is actually a generous town. A study by the Center on Wealth and Philanthropy concludes that, adjusted in the center’s own way for the cost of living, high-income households in the New York metropolitan area give more to charity than in any other city—on average, nearly 9 percent of their disposable income. This dates way back. For instance, when a collection of businessmen decided after the Civil War that the city needed to add some polish to its industrial vigor, they quickly provided funds for what became the Metropolitan Museum of Art. Today, local cultural institutions supported by philanthropic giving are some of the most important elements in making New York what it is.

What happens, though, when it’s not a museum that needs help, but the culture of the city itself? By the end of the 1970s, New York City was broke, the Bronx was burning, crime and drug abuse were spiking, essential agencies seemed ungovernable, and racial tension was literally murderous. Dystopia lurked around every corner.

Once again, private philanthropy stepped in. Nonprofit “business improvement districts” were created to provide basic street services where the city government was falling down. Philanthropically supported research organizations like the Manhattan Institute spewed new ideas on how to tame and revive the metropolis. Donor-funded researchers like Charles Murray, Lawrence Mead, the Working Seminar on Poverty, and others churned out fresh ideas that, within a decade, led to new laws undoing the excesses of what Bill Clinton criticized as “welfare as we know it.”

Idea-based philanthropy similarly helped spread the “broken-windows” understanding that tolerating petty offenses and visual blight will quickly lead to bigger crimes. Acting on this new insight eventually pushed New York City crime down to less than a fifth of its 1990 peak. As urban war zones stopped smoking, Habitat for Humanity and other housing charities built blocks and blocks of single-family homes ringed by carefully tended lawns in places like the Bronx, where just a few years before, arson-scorched empty towers had seemed likely to molder forever.

As the gravest emergencies were gradually solved, smart philanthropists improved other aspects of the city’s quality of life, often by challenging prevailing assumptions. Richard Gilder and allied donors (capped by a $100 million gift from John Paulson) formed the privately funded Central Park Conservancy to resuscitate the worn fields, dangerous thickets, and dilapidated structures of the city’s crown jewel open space. Stephen Schwarzman led a rehabilitation of the New York Public Library, Roger Hertog revived the New York Historical Society, and David Koch and cadres of other donors revitalized important institutions like Lincoln Center and the Metropolitan Museum. Robert Rosenkranz established a brainy live debate series in the city called “Intelligence Squared.” Another group of donors created the High Line, which attracts 4.4 million annual visitors and is estimated to have sparked $2 billion of surrounding real-estate development. Sandy Weill, the Kraus family, and others funded an explosion of enhancements to the city’s hospitals.

A city where ugliness, dysfunction, and danger had become the norm was once again made livable. And private giving sparked many of the turnarounds.