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Chapter 9: Lead Donors

Success in public-policy philanthropy requires potent ideas and competent institutions, but most of all it requires wise people capable of leading troops through the treacherous, quicksilver process of inducing useful social change. Charles Loring Brace once said that only astute “practical philanthropists” could orchestrate this. He himself was an excellent example of the type.

Born in 1826 to a prominent Connecticut family, Brace graduated from Yale and considered a career in the ministry. For a time, he worked as a missionary in New York City, trying to assist adults who had fallen on hard times or into prison. The experience disillusioned him: He feared that many of his charges were beyond help.

Brace believed it would make more sense for volunteers and philanthropists to focus on children: “As Christian men, we cannot look upon this great multitude of unhappy, deserted, and degraded boys and girls without feeling our responsibility to God for them,” he wrote. Brace found his true calling as an urban youth reformer, a vocation he pursued for the rest of his life through the Children’s Aid Society, which he founded in 1853.

“Something must be done to meet the increasing crime and poverty among the destitute children of New York,” wrote Brace in his first circular for the society. “These boys and girls, it should be remembered, will soon form the great lower class of our city. They will influence elections; they may shape the policy of the city; they will, assuredly, if unreclaimed, poison society all around them.”

Brace’s solution was to establish trade schools, lodging houses, and rural camps—anything that would take orphaned and abandoned children off the streets and give them opportunities to improve themselves, before they turned into the hopeless adults he had encountered through his initial missionary work. Self-improvement was a constant theme of his work: “The worst evil in the world is not poverty or hunger, but the want of manhood or character which almsgiving directly occasions.”

Self-improvement, he believed, sometimes requires a drastic change of scenery. So his Children’s Aid Society popularized the practice of resettling troubled youngsters with adoptive families in the Midwest and far West, where urban pathologies were absent, and work was available and sometimes highly rewarding. This activity was known as “placing out,” and led to the advent of “orphan trains”—groups of children who left the east coast for a new life in the American interior.

It was a controversial practice. A few abolitionists condemned it as a new form of slavery. Some Southerners regarded it as an abolitionist plot to make slavery uneconomic in the territories by bringing in surplus labor. Modern-day critics are more likely to concentrate on the permanent separation of children from their parents: Not all of the passengers on the “orphan trains” were orphans, and many were in fact surrendered by mothers who could not support them.

By the time the practice ceased in 1929, the Children’s Aid Society had placed out at least 150,000 children. Combined with other groups that copied this strategy, the total number of children relocated from east coast urban poverty to rural life out west may have approached 200,000. “To judge the success of placing out is not easy,” writes Marilyn Irvin Holt, a historian. “The Aid Society had no rigid criteria, since its purposes were bound to ideals of self-help and self-improvement, impossible qualities to measure.”

Brace knew his work depended on the generosity of others. He raised the funds for the Children’s Aid Society through “incessant publicity.” He once commented that he wrote so many articles for newspapers and magazines, calling attention to the problems his group tried to address, that he often felt like a “daily editor.”

Brace’s first major financial supporter was Margaret Astor, wife of businessman William Astor, who offered a gift of $50. By 1870, Brace was raising $200,000 per year. “A State charity has the advantage of greater solidity and more thorough and expensive machinery,” wrote Brace.

He foreshadows a type of figure who would become important in philanthropy: the charitable activist who doesn’t just rustle up money, but leads, acts as an impresario, and inspires.
“But, as compared with our private charities, the public institutions of beneficence are dull and lifeless. They have not the individual enthusiasm working through them, with its ardor and power. They are more like machines.”

 

Brace foreshadows a type of figure who would become important in philanthropy: the charitable activist who is not just someone who rustles up money, but leads, acts as an impresario, and inspires. A century after Brace took up the cause of children, another example of the type emerged in New York City. Louis Schweitzer was at a Manhattan dinner party in 1960 when a friend shared a startling statistic: Across the river in Brooklyn at that very moment, more than 1,000 boys had been sitting in jail for at least ten months, waiting for their trials to begin, simply because they were too poor to make bail. Schweitzer was astonished by this. He became determined to learn more, and possibly do something about it through his own action and philanthropy.

Born in 1899, Schweitzer had immigrated to the United States from Ukraine at the age of four. His immigrant father thrived in America and built a fortune running a company that manufactured cigarette paper. Louis trained as a chemical engineer and took over the family firm. He also put his wealth to a variety of colorful uses. He bought a theater in New York for his wife, a stage actress. When he learned about a cabbie who by sheer coincidence shared his name, he acquired a taxi medallion and gave it to the driver, asking him simply to split the proceeds and take Mrs. Schweitzer to the theater when she needed a lift. For his favorite barber, Schweitzer purchased a shop in the basement of the Chrysler Building, on the condition that he could get his hair cut for free, after hours, when he would not have to wait in line.

Schweitzer was also passionate about the Bill of Rights. He was concerned that the languishing of so many unconvicted boys in Brooklyn didn’t match the Sixth Amendment’s promise of a “speedy and public trial,” and the Eighth Amendment’s pledge that “excessive bail shall not be required.” So he hired young journalist Herb Sturz to help him look into the matter. They visited detention centers around the city and encountered some wretched squalor.

Before long, Schweitzer recognized that an amateur operation would not suffice. They needed a nonprofit group, possibly to run a bail fund. So, in 1961, he and Sturz founded the Vera Institute.

Schweitzer possessed an extensive list of powerful contacts and secured an appointment with Robert Wagner, the mayor of New York City. At Gracie Mansion, Wagner saw the promise of a criminal-justice reform that would not cost his administration any money. During the meeting, the mayor called the city’s chief magistrate, Abraham Bloch, and handed the phone to Sturz, who made his pitch for new bail funds. This led to another conversation with a different judge, John Murtagh, who pointed out that the core problem was a lack of good information. Judges, he said, were often forced to make bail decisions based on nothing more than the names of defendants and the charges filed against them. He suggested that Vera examine the character of defendants and make informed recommendations about which of them could be released on their own recognizance.

To outsiders it may have seemed an unlikely collaboration. ­Schweitzer was a liberal. Judge Murtagh had a tough-on-crime reputation. In 1970, the left-wing Weathermen terrorist group tried to kill him and his family by firebombing his house, while he was presiding over a trial of Black Panthers. But the two men were united by an interest in true justice—dealing appropriately with the innocent as well as the guilty, and not letting them become confused.

What soon emerged was the Manhattan Bail Project, sponsored by the Vera Institute and funded initially by Schweitzer and later by the Ford Foundation. (By 1966, Schweizer had contributed $200,000 and the Ford Foundation had given $376,000.) Sturz oversaw the development of a fact-finding process that aimed to learn more about defendants. It relied on a four-page questionnaire: Were they married? Did they have jobs? Had they served in the military? What were their ties to the community? Did they have a prior arrest record?

Armed with this information, plus recommendations from the Vera Institute’s investigators, judges suddenly found themselves able to make better decisions about bail. As the months passed and the results trickled in, the Vera model began to show strong results: Judges who worked with Vera’s data were much more likely to release defendants, and very few of them failed to appear in court later.

“By mid-1964, Vera workers had interviewed 10,000 defendants and recommended 4,000 of them for release. Of the 2,200 or so who had been released without bail, the proportion of no-shows was 0.7 percent—less than one fourth the typical rate when money bail was imposed,” wrote Sam Roberts in his book on the subject. Liberals and conservatives alike appreciated a reform that both improved justice and saved money.

Data-based bail reform quickly spread through the five boroughs of New York City, then to other locales like Chicago, Des Moines, ­­­St. Louis, San Francisco, and Washington, D.C., and next to 15 states. It even prompted copycats in Canada and Great Britain. Finally, in 1966, the success of Vera led to congressional passage of the Bail Reform Act. Schweitzer attended a ceremony in the East Room of the White House when Lyndon Johnson signed the bill, where the President noted the power of “one man’s outrage against injustice.”

Success requires much more than outrage, of course. Schweitzer identified a problem that few others knew about or cared to address. He sought the expert advice of knowledgeable officials. He marshaled hard evidence, not rhetoric, to make his case. He made a wise staffing decision with Sturz. He used his connections to influential political actors. And Louis Schweitzer exerted real personal leadership. In all of this he demonstrated again the power of people in public-policy philanthropy.

Policy Player Profile: Art Pope

When Governor Pat McCrory of North Carolina took office in 2013, one of his top priorities was tax reform. And with fellow Republicans controlling the Tar Heel State’s executive and legislative branches simultaneously for the first time since Reconstruction, he had an opportunity to succeed. Within a few months, the North Carolina government had passed what Forbes magazine called “one of the most impressive tax-reform packages in any state in years.” State income and corporate taxes became both lower and flatter, with promises of more cuts to come. In 2014, McCrory became one of just four governors in the country to earn a grade of “A” on the Cato Institute’s fiscal-policy report card.

Partial credit for this accomplishment belongs to Art Pope. As McCrory’s budget director and in-house fiscal expert for two years, Pope was an essential part of the governor’s team. Yet he was also more than that. Pope was the indispensable philanthropist who helped create the underlying conditions for the success of tax reform and other policy shifts in North Carolina. Beginning in the late 1980s, he methodically funded the development of an intellectual, legal, economic, and media infrastructure capable of generating conservative innovations in public policy for his state. He built what the Washington Post labeled “a state version of what his friends Charles and David Koch have helped create on a national level.”

“My goal is to improve the lives of the people of North Carolina, and the United States,” says Pope. The primary vehicle for these efforts has been the John William Pope Foundation, named for his father. Since its creation in 1986, it has donated more than $60 million to think tanks and other organizations across North Carolina. This collection of groups, says the Washington Post, represents “a sphere of influence that has put [Pope] at the epicenter of North Carolina government and moved his state closer to the conservative vision he has long imagined.”

Pope’s main job is to run Variety Wholesalers, which owns and operates a chain of nearly 400 retail-merchandise stores throughout the South. His father started the company and Pope always knew he’d play an important role with it, but early in life he also demonstrated an interest in ideas and politics. He majored in political science at the University of North Carolina at Chapel Hill, read the books of free-market economist Friedrich Hayek on his own—“because none of my teachers assigned them”—then went to law school at Duke. He worked in the administration of Governor Jim Martin, a Republican elected in 1984.

Government, however, became an exercise in frustration for Pope. “The state had been Democratic for so long that everything was oriented toward Democratic priorities,” he says. “There was nowhere to look for good public-policy ideas.”

Martin’s administration needed something like the Heritage Foundation and other free-market think tanks that were then generating ideas for President Reagan, but with a focus on Raleigh rather than Washington. Pope wasn’t immediately sure about how to build one. As he left the government to work at Variety Wholesalers, however, his father asked him to establish the Pope Foundation, with one of its goals being to defend the system of free enterprise that made the company’s success possible. “We want other people to have a chance to prosper, too,” says Pope. He decided that the family foundation might best serve its public mission by providing officials in North Carolina with good public-policy ideas.

The first step was to start a think tank: the John Locke Foundation (named for the English philosopher of liberty). The Pope Foundation provided seed money in 1990, and then generous long-term support. Today, the JLF is widely recognized as one of the most successful and influential state-level think tanks in the country. The foundation also created the Civitas Institute, which promotes citizen involvement in public policy, a public-interest law firm known as the North Carolina Institute for Constitutional Law, and the Pope Center for Higher Education Policy, which focuses on colleges and universities.

The Pope Foundation also gives a good deal to traditional charities. “If a person is starving and homeless, he needs food and shelter. So we support humanitarian causes,” says Pope. The foundation’s beneficiaries include the likes of the Salvation Army, homebuilder Habitat for Humanity, and StepUp Ministry, which offers job training and life skills. The foundation also promotes education (by supporting various schools) and character training and individual improvement (via the Boy Scouts and Girl Scouts, for instance).

“These are important projects,” he says. But “if we want a long-term cure for poverty, we need to promote a just society through individual liberty, limited and constitutional government, and the voluntary exchange of goods under the rule of law. That’s how we can do the most good for the most people in the long term, by promoting good public policy.”

Pope suggests that the famous parable about teaching a man to fish so he can eat for a lifetime, rather than just giving him a meal, is “all true. But there’s more to it.” Donors should help the poor become owners and producers and participants in America’s thriving world of business. “Does the fisherman have access to capital, a right to sell his catch in a marketplace, and rules that protect his efforts to better himself?” This comes back to public policy.

Pope also participates in traditional politics. He is a donor to candidates. He has been a candidate himself—serving several terms in North Carolina’s legislature, and running unsuccessfully for lieutenant governor. His latest stint as budget director was an appointed post.

But all of this traditional politics has only confirmed in Pope’s mind the need for philanthropists to support longer-range, detailed, unglamorous, but useful public-policy research. “The budget director,” for example, “doesn’t have the time or the resources to engage in broad public-policy research. That’s why think tanks and similar organizations are so helpful.”

When North Carolina’s tax reformers took charge in 2013, they didn’t have to invent an agenda from scratch. Instead, they could draw on years of investigation and advocacy, much of it supported by the Pope Foundation. “These things take time,” says John Hood, who headed the John Locke Foundation for many years before becoming president of the Pope Foundation in 2015. “You can’t parachute in with a new plan and expect immediate success. You need to build an infrastructure for ideas. You need to develop relationships over time. Tax reform worked in 2013 partly because we were forming relationships with legislators back when they were county commissioners in the 1990s.”

Pope emphasizes that good public-policy groups don’t serve partisan interests. They promote valuable ideas to lawmakers of all political persuasions. Back in 2009, amidst the Great Recession, “when Democrats needed ideas for cutting the budget, they knew they could turn to the John Locke Foundation,” he notes.

Thirty years later, Art Pope has solved the problem he encountered in the 1980s—the absence of mechanisms for generating reform ideas in North Carolina from the problem-solving Right. “In a generation, we’ve shifted the public-policy debate in North Carolina from the center-left to the center-right,” he says.

What’s the most important lesson Pope can share with philanthropists who might want to achieve similar results in their own states? “Find great people—you have to invest in great people,” he says. “You also have to risk failure. If you don’t make a few errors along the way, you’re probably not trying hard enough.”

Philanthropists also need to understand that just as central planners can’t actually steer an economy, ideas may take their own unexpected courses. “When we started the John Locke Foundation, we had no idea where we’d be now,” says Pope. The result is better than he probably ever dared to imagine.

The rest of the country has taken note. As the Washington Post observed in 2014, “There is no one in North Carolina, or likely in all of American politics, quite like Art Pope.”

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