After finishing his education with student debt from multiple schools, Paul Haaga practiced law in Washington, D.C., worked for a bit at the Securities and Exchange Commission, then entered finance at the Capital Research and
Management Company in Los Angeles, one of the oldest and most respected investment firms in the U.S. In 2012, Haaga retired as chairman of the board. Today Capital Group manages assets of around $1.5 trillion.
But don’t let his retirement fool you. Haaga is a very active supporter and adviser of prominent charities. He is a trustee of the Huntington Library Museum and Gardens, the Los Angeles County Museum of Natural History, Princeton University, Penn Law School, Georgetown Preparatory School, the Hoover Institution, the Ralph M. Parsons Foundation, and more. Since 2011, the active Republican has been a board member of NPR, and he served as interim president in 2013 and 2014.
In a wide-ranging interview, we asked Haaga about ideological diversity at NPR, what makes a good board member, and his namesake dinosaur. We even chatted about his old college friend Mitch Daniels and Neil Gorsuch.
Philanthropy: How did you end up on the board at NPR?
Haaga: When I came back to D.C. to work, my favorite show of any kind was bluegrass music on WAMU on Saturday and Sunday mornings. Then I would hear the newscast and say, “These are pretty good.” I came to love NPR.
When they fired Juan Williams, they realized that zero of their 17 board members were Republicans. People said, “Help! We’ve got to find a Republican.” My wife Heather and I had just given our local station a gift for their capital campaign and I’m pretty open about my Republicanness, so they contacted me and I was delighted
Philanthropy: If you were brought on for ideological diversity, do you think it worked?
Haaga: I don’t think there’s ever been a conscious effort at NPR to favor prospective board members who are Democrats. If the board got lopsided it likely had a lot more to do with drift, the same dynamic that makes the investment industry too male. You get comfortable with people, and you fail to ask, “Am I comfortable only because that person agrees with me?”
Many NPR board members are Democrats, but I’ve never been told that I’m on the wrong side of history when I’m here. I think my views are very well-respected.
Philanthropy: I tried to count how many CEOs preceded you at NPR. It seemed like maybe seven in seven years.
Haaga: Way too many.
Philanthropy: So what were your goals when you were interim president?
Haaga: On the board I had been the initiator of what we call the balanced budget amendment. It says that we are never going to approve a budget that doesn’t include realistic income projections and ultimately result in a balance. We made that a formal commitment. We’ve had balanced budgets the last three years now, so it seems to be working.
I focused on broader leadership goals like helping people talk to each other, putting the right people in the right positions, getting the stations and NPR to collaborate in fundraising, encouraging an increase in the amount of locally sourced content on the national news programs, and helping with our fundraising and sponsorship efforts.
When our previous CEO left, one of the first questions I was asked at the staff meeting was, “Are we ungovernable?” I really wanted to show the team at NPR that they are not only governable but that it is an honor and a privilege for any CEO to be able to work with them.
Philanthropy: Did you actually work for a dollar a year?
Haaga: They gave me a dollar, but I gave them a quarter back because I only lasted nine months. That was my only W-2 income that year. I put it on my tax form, and got the dollar framed.
Philanthropy: You always knew it was just an interim patch.
Haaga: Yes. I could organize a meeting, fundraise, balance budgets, hire good people. But I couldn’t really lead change to put them in a position to take advantage of, rather than get crushed by, all the changes going on in the media world, especially from technology.
They needed someone who could see the digital future, and my successor Jarl Mohn is the perfect person for that. And I’m not a really a journalist—although I was the editor-in-chief of the Georgetown Prep student newspaper 50 years ago!
Philanthropy: Speaking of Georgetown Prep, what do you think of fellow alumnus and Supreme Court nominee Neil Gorsuch?
Haaga: He’s 20 years after me, so I don’t know him personally, but he’s highly regarded in alumni circles. I think he’d be wonderful. He’s a very good example of the Jesuit high school motto, “Men for Others.” He’s certainly led a career focused on helping others. He’s a true public servant.
Philanthropy: You are a generous donor to the American Enterprise Institute and the Hoover Institution, as are many of our readers. What could someone with that philosophical bent learn from NPR?
Haaga: I’ve learned from my experiences on the NPR board the same things I learned from serving on the AEI National Council and Hoover board, which is how important it is that the public sphere—policymakers, and voters, and citizens—have access to in-depth analysis of really important issues, and a civil public debate. Hoover and AEI and NPR all avoid bias because they do things in-depth. The greatest antidote to bias on either side is depth of analysis, because you realize that these issues are not simple enough to fit on a protest sign or a bumper sticker. None of those three organizations walks out on speakers or shouts others down, because they are listeners and thinkers.
Philanthropy: I tried to make a list of the boards you’ve been involved with, and it was very long. What drives you to join a board?
Haaga: In the earlier part of my career there were many invitations. Every institution in L.A. wanted somebody from Capital Group on its board. Philanthropy was part of our culture, started by our founder and our founder’s son, who was running it when I was first there.
I’ve said no many times, but it’s always been because of lack of capacity. I won’t join a board and say, “Yes, you can use my name, but I’m not coming to meetings.” I take boards seriously.
My eyes can be bigger than my stomach, but when I’m on multiple boards my strategy is to be a leader on only a few. Take the L.A. Natural History Museum. I’ve been on its board 20 years, but in the beginning, when I was really working hard, and chairing the board of our kids’ school, I told them “I’m a back-bencher. If you can accept me on those terms, I’ll come to the meetings, stay around, and be a leader later. But I’m not going to take leadership roles now.” I was eventually the board chair for seven years.
Philanthropy: What do you think makes for an excellent board member? What mistakes have you seen board members make that our readers should avoid?
Haaga: One of the mistakes boards make when looking for other board members is to not realize and acknowledge that being a board member is different from other, more singular endeavors in which people might be successful. Board members have to be collegial, they have to process a great deal of information, they have to be sure that all the right constituencies have been engaged, and then they have to make a decision and oversee its implementation.
I’ve been on boards with very bright, successful people who always want one more study or who don’t want to make a decision where there’s any risk. Effective board members realize that there’s a right amount of studying, there’s a right amount of analyzing. It’s not zero, but it’s also not infinite. You study things, then take some calculated risks or you’ll never change, never improve.
New start-up nonprofits can take people who’ve never been on boards before, who have passion and enthusiasm for the task at hand, even if they lack vision and governance experience and financial or other expertise. Get your training wheels and learn to be a board member at someplace small and local. But for major institutional boards, don’t even propose people who haven’t been on other boards before, where you can check how they served. Because it’s different from almost any other kind of work.
If you do bring on a first-timer, make sure he or she is the exception, or the entire board might be adversely impacted. Board failures generally take one of two forms. They either back too far off and just have happy talk. Or they micromanage the staff. This happens because the members don’t know how to tease out and resolve the truly
salient issues. They’re either too removed or too involved; they’re not involved at the right level, at a helpful level. I think perspective and experience really helps. I weigh that higher than even things like passion for the mission.
Philanthropy: What are the signs of an effective board?
Haaga: It’s important for boards to give and raise money and to build things, but a board is most effective when it presides over a change in the entire culture of the organization. An effective board does this by leading, supporting, helping the institution see and prepare for the future, and showing confidence in the staff and administration.
Philanthropy: Let’s talk about your time at Princeton. I hear you have a mutual non-aggression pact with Mitch Daniels, to not spill secrets about your undergraduate years.
Haaga: He’s a great guy. Could have been President. He was a real friend in college and ever since.
Philanthropy: Our readers are often interested in giving to their alma mater but there’s a hesitancy about how the money will be used. How have you navigated your gifts to Princeton and ensured that the money is used for its intended purpose?
Haaga: Money’s fungible. If a department gets a gift, often they’ll get less from the general fund. When Heather and I support things, we mostly do it with unrestricted gifts. But there are occasionally things that come up that wouldn’t happen without a restricted gift.
When my friends say, “Princeton’s rich,” I say, “No, it’s big. There’s a lot of stuff going on.” And there are a lot of new things that could happen, but only with an incremental financial gift. Our three biggest incremental gifts have been to the art museum, the rugby teams, and the internship program. In each of those areas—art, rugby, and internships—good things happen that literally wouldn’t happen without us.
The latter is called the Princeton Internships in Civic Service. A student gets $5,000 through the university to work for the summer in a nonprofit. The charity has a free person. And the student also gets an alumni sponsor, who often becomes a friend and ends up giving continuing career advice. Heather and I sponsor eight or ten of them every year, and every time I tell somebody about it they say, “My nonprofit would love that,” and I say, “Okay, I’ll do another one.” I love that for every $5,000 we give, one more student and one more nonprofit have a fabulous experience. I use that as an answer when people say “Oh, why throw money into the yawning $2 billion a year maw of Princeton?”
I hope I’ll be remembered for mentoring; that’s really important to me. Sharing my experiences and wisdom with young people. Being involved to help organizations work better.
But back to the original question. The unrestricted giving we do assumes the university has its own well-founded priorities. Even when we do restricted giving, it is usually for things the university has on its priority list but can’t do without our money. There’s always a panoply of things that you can support. Rarely do we substitute our ideas for their ideas, because then there’s no buy-in, and they’re not going to do it very well if it’s not something they want to do.
Philanthropy: I noticed that Princeton adopted in part the Chicago statement in support of free speech on campuses.
Haaga: I was very happy that the Princeton faculty led the way in voting to adopt the statement and (alas) remains one of the only professional bodies to do so.
Philanthropy: How can donors who care about free speech and intellectual independence pull colleges away from restrictive speech codes, safe spaces, and other efforts to prevent students from encountering ideas they may not like?
Haaga: At Princeton, Professor Robert George was the person who got the faculty to adopt the Chicago principles. He runs something called the Madison Project specifically to bring in speakers with conservative and religious ideas that are rarely voiced on campuses these days. So, one answer is to affirmatively support a campus organization like that.
Campuses need constructive people who don’t think in the conventional liberal ways that are now campus orthodoxy and who are smart and articulate—and brave—enough to come on campus and engage with people who can sometimes be unruly. Sadly, protesters at Middlebury recently shouted down Charles Murray of AEI and seriously injured the female professor who was accompanying him. They would have done better to listen to him, since Coming Apart was one of the best books I’ve ever read.
Philanthropy: What are you reading now?
Haaga: Right now I’m loving J. D. Vance’s Hillbilly Elegy. It’s intriguing how in his community, people thought that you got ahead either by being born off-the-charts brilliant, or born lucky—the silver spoon, parents who paved the way. They didn’t relate hard work to dramatic improvements in life. They realized you could go to work, you could get some money, you could pay the bills. But they didn’t think you could become enormously successful from hard work alone. Most of it was because they hadn’t observed that happening in their communities. They hadn’t seen people making more than modest changes in their circumstances through sheer dint of hard work.
One of the reasons I’m a Republican is that I grew up in the Johnson era, and I saw the havoc that the welfare state wrought. It’s not that I want to avoid paying more taxes—because we actually give away more than we pay in taxes—but because I saw the devastating effect that some well-meaning welfare programs had on breaking up families and institutionalizing the cycle of poverty.
Entry-level jobs are not dead ends. I delivered newspapers. I worked as a waiter. None of those things harmed me and they all helped me. Coastal-elite liberals sneering at manual work and service jobs is not helpful. Mobility requires that you start somewhere. How will you know you can be a manager at McDonald’s if you’re not a hamburger-flipper at McDonald’s first? How will you know the importance of getting up, and being on time, and being polite, and helping people figure out things if you don’t have to do that when you are young.
Philanthropy: I read that you’ve coached as many as 30 youth sports teams, and run 21 marathons. How did you have time to do all that?
Haaga: I ran one or two marathons a year. I haven’t done one in quite a while; my knees retired long before I did. The coaching piece, I just made time. They were little kids’ teams that practiced one or two days a week. I had to run out the door at 4:00 to make a 4:30 practice. That forced me to delegate more than came naturally to me at that point in my life. And that was a good thing. I was in my 40s and it was time to delegate more. I was often hovering too much over people who reported to me.
Philanthropy: What do you think students can gain from participating in sports that they can’t get in the classroom?
Haaga: Several things. One is a sense of teamwork and collaboration that they can’t get to the same extent in a classroom. The sense of burying your ego and looking at what’s good for the team, not just what’s good for you. Crew is a great sport for that; rugby is too. There’s not a lot of room for stars. There’s not a lot of individual stats, particularly in crew. It really is a team thing.
The second positive is doing something different from how you’re spending the rest of your time. I think it’s important that there be a variety of things going on in your life because you learn different things from them. Our own children went to a school that was very competitive, called Polytechnic in Pasadena. I remember questioning a graduate: “These kids are all bright, but half of them are going to be below average in their class.” And she said, “There’s so much going on at Poly that no one’s in the bottom half all day.” And I have found that the converse—no one is going to be in the top half all day—is equally important.
The best mathematician is not likely to be on top at baseball. The best baseball player gets some humility when he tries to act in the spring musical. Different people are going to be good at different things. You have to challenge yourself and round out your skills. Athletics is one way to do that.
It’s also good to get physically tired. The aerobic aspect of sports is a good thing. If your main activity is singing or acting or debating or protesting, make sure you’re also working out a lot.
Philanthropy: There’s a big education theme in your giving. Why?
Haaga: I had financial aid in high school, college, law school, and business school, so that focused me on the idea of giving back. I was one of only three students in my 66-person high-school class who was on financial aid. I couldn’t have gone there without it. The same for Princeton, the same for law and business school.
Princeton is now accessible to anybody. If you’re a poor person, it can actually be cheaper to go to Princeton than to your local community college. It’s more challenging to educate some of today’s students, because they need more than just the classes—expanded counseling, internship programs, mentoring.
Philanthropy: I heard you have a namesake dinosaur.
Haaga: It was a new one they found, and through the L.A. Museum of Natural History it got named it after me: Fruitadens Haagarorum. It’s three pounds, has feathers, looks like a chicken. Because it has feathers, it’s an important link between the dinosaurs and the birds.
It’s the smallest dinosaur in North America. On a shelf at my home I’ve got a full life-sized model of a dinosaur, yet it’s not so big that it frightens our grandchildren. You couldn’t do that with a triceratops.
Philanthropy: What do you think about donors putting their names on things?
Haaga: Some people have asked us why we don’t give anonymously. The answer is that it doesn’t inspire or challenge other people. We like the idea of giving something, like the exercise room at our local Y, and then having people see us driving around in ten-year-old cars and not living in the biggest house in the neighborhood. It causes people to think, “Whoa, maybe I’m thinking of the wrong standard about how much one gives.”
Naming things and being recognized does challenge other people. It gives them an idea of what’s normal, and maybe raises their sights about what they could possibly do; especially when they see somebody who they think of as a peer doing something that’s larger than what they were thinking of.
I don’t think anything should be forever. When you’re repurposing a building, it’s time to change. You can put that into the gift agreement up front: this will be for a certain period of time.
Philanthropy: It appears that you and Heather give without a foundation apparatus. Was that a conscious decision?
Haaga: When we got married, we both had a negative net worth from student loans. Neither of us inherited anything. I had a good income, but I didn’t have big uneven chunks of money. A lot of times, people use a foundation to smooth out income surges, but there was never a year when we needed a larger deduction than came from the gifts we wanted to make currently. So we never felt a need for a foundation.
My income and assets went up gradually. There was no moment when I said, “Oh look, I’ve got more money than I need.” We started by giving small gifts. That’s why I always tell nonprofits to not forget small donors. Based on my own experience, you give big gifts later to the places you used to give the small gifts. So make sure you’re
getting the small gifts from your supporters. Don’t wait until they’re wealthy and then go try to reintroduce yourself.
Heather and I do all this together. When we were deciding to get married we talked about having children, what religion they should be, where are we going to live, big things like that. But neither of us ever thought we would be lucky enough to end up in a situation where we could make important decisions about which nonprofits to fund. While we each have some interests that are our own, happily we tend to agree most of the time on amounts and recipients, so that has never been a source of contention.
Philanthropy: How have you taught philanthropy to your children?
Haaga: We’d talk to them about what we were giving to and what it was doing. We wouldn’t crow about it. But we did explain why we disappeared so often in the evening to go to a board meeting, or to go do something for a nonprofit. They had a pretty good idea what we were doing and why we were doing it. I think it became natural. My children are both on nonprofit boards now and are both very generous with their own money. I think it caught on.