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Chapter 11: Prepare to Be Surprised

Serendipity is not a strategy. Yet some of the greatest achievements in public-policy philanthropy were unexpected. One of the secrets to successful ­policy-oriented philanthropy is to position yourself so you’re ready if the stars suddenly align and an opportunity for action opens up.

As the Second World War came to an end in 1945, the United Nations was born—but it was born homeless, or nearly so. Its initial conferences took place in San Francisco, where a group of governments signed its charter. The next year, the General Assembly and Security Council met for the first time, in London. Other gatherings occurred at Hunter ­College in New York City and at Lake Success on Long Island.

As the new body searched for a permanent home, preferably in the United States, nothing seemed quite right. A committee proposed a tract in New York’s Westchester County, but the idea found little favor. The U.N., many felt, needed to be in a major urban location. Manhattan would be ideal, but large blocks of unbuilt real estate were almost impossible to assemble. Philadelphia and San Francisco stepped forward as candidates. The idea of a European location, perhaps Geneva, also presented itself.

John Rockefeller Jr. had taken an interest in the U.N. from its earliest beginnings in 1944, when Allied diplomats met at Dumbarton Oaks in Washington, D.C., proposing a successor organization to the ineffectual League of Nations. Rockefeller’s son Nelson was involved in an effort by New York City’s government to find a headquarters for the new assembly. A suggestion of the 1939 World’s Fair grounds in Flushing Meadows went nowhere, simply because it was not Manhattan. Nelson proposed Rockefeller Center, but his father overruled him, not wanting to break leases with existing tenants.

The U.N. finally set a deadline for a decision: December 11, 1946. On the day before the vote, Nelson and his brothers were holed up trying to find a solution. They considered surrendering their own portions of a family estate in Tarrytown, just north of the city. With 15 hours to go, Nelson phoned his father and began to explain the Tarrytown concept. “Is this what the United Nations prefers? Is this the ideal location?” asked the elder Rockefeller. “No,” said Nelson. “What is?” asked the father. “New York City, of course,” said Nelson.

One of the secrets to successful policy-oriented philanthropy is to position yourself so you’re ready if the stars suddenly align and an opportunity for action opens up.

Within minutes, John Rockefeller Jr. made a different proposal: He would buy the “Zeckendorf property”—17 acres along the East River in Manhattan, already planned for development—and give it to the U.N. His sons tracked down the owner at a nightclub and worked out a deal on the spot worth $8.5 million. The next morning, with time running out, the elder Rockefeller signed the papers at his breakfast table. The U.N. immediately accepted. At last it had found a home, thanks to the generosity of one of America’s leading philanthropic families.

The elderly Rockefeller was of course a shrewd businessman. Perhaps he felt that taking the Zeckendorf property out of commercial circulation would increase the value of Rockefeller Center, which was still relatively new and had space for tenants. Yet the donation was clearly offered with an idealistic spirit: Rockefeller hoped that aiding the creation of the U.N. could help prevent the eruption of a third world war.

The subsequent performance and value of the U.N. as an international institution is of course highly debatable. Yet the fact remains that although the U.N. was mostly passive throughout the Cold War and any number of other conflicts, there was at least no global cataclysm after it started meeting regularly. And the organization’s location in New York as made possible by public-policy philanthropy has provided the ­United States with many benefits, like easy access to foreign diplomats, and American acculturation of global elites. The Rockefeller gift made a difference. And it reveals that some of philanthropy’s best achievements are unplanned, ad hoc, and last-minute.

Another ad hoc grant that produced a big effect, despite being much tinier, was made by the John M. Olin Foundation in the early 1980s. A group of conservative law students at Chicago, Harvard, and Yale wanted some balance to the overwhelming liberalism of most law schools, and an alternative to the left-wing National Lawyers Guild that coordinated activism among attorneys across the country. The dissenters decided to call themselves the Federalist Society. The founders proposed an inaugural academic conference at Yale in the spring of 1982. The Institute for Educational Affairs, an organization that often served as a vehicle for the disbursement of Olin funds, awarded $15,000 to the project.

The event featured speakers like future Supreme Court justice Antonin Scalia, D.C. Court of Appeals judge Robert Bork, Ted Olson of the Department of Justice, and Richard Posner, the influential scholar of law and economics. The audience numbered about 200 law students, including some from as far away as California, Colorado, and Louisiana.

“When we started the Federalist Society, we didn’t know we were starting the Federalist Society,” said Lee Liberman Otis. The gathering turned out to be more than just a conference. The successful launch event encouraged the organizers to set up campus chapters that could organize more dissident gatherings. Before long, the leaders were raising funds, hiring staff, and growing rapidly in size and influence. Within a year and a half of the conference at Yale, private donors had seeded the Federalist Society with $103,000, with almost two thirds of it coming from the Olin Foundation. The organization quickly created a new balance of intellectual and ideological power within many of the nation’s best law schools, and as alumni graduated it eventually brought the same realignment to the legal profession itself.

At a 1988 event, President Reagan argued that the Federalist Society was changing the country, by reviving “the value and concepts of law as our founders understood them.” Within another decade, worried liberals were quizzing nominees at Senate confirmation hearings about whether they had ever participated in Federalist Society events. In 2013 the group had nearly 60,000 members, raised $12 million, held 1,500 events with speakers at law schools, and sponsored discussions at more than 75 lawyers’ chapters around the country. The Olin Foundation’s initial contribution of $15,000 (and lifetime investment of more than $5.5 million) paid off handsomely.

Many philanthropists regard the Federalist Society as so successful at shifting the tides within a major profession that they have tried to replicate its accomplishments in other fields. In 2007, the Ewing ­Marion Kauffman Foundation supported creation of the Benjamin Rush ­Society, which seeks to organize medical students and doctors. Soon that group was also receiving support from donors like the Achelis and Bodman Foundations, the Searle Freedom Trust, and the Paul Singer ­Family Foundation. Not long after, investor-turned-philanthropist Marilyn Fedak launched the Adam Smith Society, which works with students and professors at business schools. And in 2009, Roy Katzovicz, Roger Hertog, and other philanthropists joined with the Bradley Foundation to build the Alexander Hamilton Society, which focuses on informing professionals in the fields of foreign policy and national security.

It remains to be seen if these most recent groups will thrive as the Federalists have. If even one of them becomes a permanent presence in its profession, though, that could have deep and lasting effects on our society. Public-policy philanthropy often cannot be predicted. But sage giving can sometimes have wonderfully serendipitous effects. And often for a comparatively modest investment.

“It doesn’t take that much capital,” said Hertog. “We’re not building with bricks and mortar. We’re building intellectual capital—and that provides the highest return on investment that you can have.”

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