Based on what you have already read in this book, you can safely conclude that, while I admire the quest of wealthy individuals to put their money to work in trying to solve pressing social problems during their lifetimes, I have great concern about the likelihood that spending even the vast wealth they promise to deploy over a comparatively short period of time can achieve their ambition for impact on the scale to which they aspire. Nothing that I have written in this book, however, should be interpreted as intended to discourage individuals from spending great amounts of money in their lifetimes on a problem they wish to address, as long as the amount of resources available is aligned with the scale of the problem to be solved and a reasonable time frame within which to solve it. To the contrary, the phenomenon of individual philanthropists’ success is an important strand in the remarkable history of American philanthropy, beginning with Andrew Carnegie and continuing to the present day. Their choices about when to give in the present and what to put aside for giving in the future quite properly arise from their experience, their judgment, and their passions for particular kinds of public benefit. Fortunately, the world of philanthropy is rich with examples of significant achievement flowing from both kinds of decisions. This chapter will give examples of these, first from donors committed to completing their giving during their lifetimes and then from perpetual ones.
The Partnership for Public Service, founded in 2001, is the only nonprofit organization in the United States that is exclusively focused on trying to enable America’s national government to recruit and retain talented individuals. In 1963, after attending Harvard Law School, Samuel J. Heyman went to work for Attorney General Robert Kennedy in the US Department of Justice. He then began to watch, with growing dismay, the steadily declining percentage of law school and college graduates who were choosing to work for the federal government. While, according to his recollections, almost half of his Harvard Law class went into government service, by the mid-1990s the percentage had dropped to below 5 percent. He resolved to try to do something about this decline.
After taking over his family’s real estate business in Connecticut upon the death of his father and gradually creating a great deal of wealth, he initiated the Heyman Fellowship Program at Harvard Law School. Subsequently, he did the same at Yale Law School, Columbia Law School, and Seton Hall Law School for students who would agree to work for the federal government after finishing their legal education. As the number of Heyman Fellows working in Washington increased, he and his wife Ronnie organized annual gatherings of those alumni in the nation’s capital, also attended by important government officials. In the late 1990s, Heyman decided to reach out more widely in order to counter the negative perception of government among college and law school students that, according to many opinion surveys, was clearly discouraging them from considering federal employment. He organized conferences in Boston, New York, and Washington to seek advice from experts on government employment, recruitment, and retention, which eventually led him to create a nonpartisan, nonprofit organization called The Partnership for Public Service. He recruited Max Stier, a Stanford Law School graduate, former clerk to Supreme Court Justice David Souter, and former deputy general counsel of the US Department of Housing and Urban Development, as CEO. Heyman then constituted a board of trustees, of which he served as chairman, and agreed to donate $45 million over 10 years as seed money to prime the work of the partnership. Stier has succeeded in growing the partnership to the point that 80 percent of its budget—$17 million in fiscal year 2017—is now provided by fees for services rendered, mainly for training of government officials, and by foundations and corporations committed to enabling the federal government to recruit and retain talented young people devoted to the ideal of public service.
Over its first 15 years, which spanned both Republican and Democratic administrations, the Partnership for Public Service has become the most respected, successful, and influential champion of effective government. Alas, Mr. Heyman died in 2009, but, before his death, he had the satisfaction of seeing how well his vision was being implemented. The organization’s signature accomplishments include the following:
• Creating the Best Places to Work in the Federal Government® rankings—the most comprehensive examination of federal employee satisfaction and commitment. The rankings, based on detailed surveys of several hundred thousand federal government employees, provide government with the means to assess and rectify barriers to its own health and performance. Now agency heads and higher-ups in the executive branch and Congress have reliable, external quantitative performance data. It is not surprising that, after the first Best Places report was released, Congress mandated that the survey be repeated every year.
• Informing changes to laws, policies, and procedures by which our federal agencies must operate. The Partnership’s advocacy efforts have resulted in the enactment of more than 30 pieces of legislation that remove barriers to effective federal management and improve outdated government systems and regulations.
• Engaging annually more than 5,000 career and politically appointed leaders with high-quality, high-impact training and other services. Improving the leadership capability of these individuals has a multiplying effect across the two-million-person federal workforce. As their numbers increase and their networks expand, the examples of their dedication to improving the functioning of the federal government cumulates.
• Building the “Call to Serve” network of more than 1,000 colleges and universities and 80 federal agencies that work together to inspire and educate a new generation about public service careers and advance the federal government’s ability to recruit mission-critical talent.
Taglit Birthright Israel is the largest organizer and funder of experiential and educational tours to Israel, which are available without cost to young Jewish men and women from all over the world.1 Similar to the understanding Samuel Heyman had that there was a need for an organization to encourage young people to pursue careers in public service, Michael Steinhardt, together with Charles Bronfman, had the vision to see how a new initiative might slow down or even reverse young Jewish people’s drift away from the religion and culture into which they had been born. Reliable social science research suggested that three discrete experiences make a substantial difference in strengthening young people’s Jewish identity: Jewish day school attendance, participation in Jewish overnight summer camps, and a period of time spent in Israel. The last of those three seemed to require the least amount of time for its influence to stick, so Steinhardt and Bronfman chose to focus their efforts on creating a program that would bring young people to Israel.
The two men led the way in priming the effort with their own funds, then persuaded many other Jewish philanthropists and foundations to participate, and ultimately convinced many Jewish federations in the United States and Jewish communities in other countries, as well as the State of Israel and the leaders of the Jewish Agency for Israel, to support what is called Birthright Israel. That organization began offering prepaid, well-organized 10-day tours for any Jewish high school graduate between the ages of 18 and 26 who has not already had an educational experience in Israel. The trips began in the winter of 1999, and since then more than 500,000 young people from 64 countries have participated, 80 percent of whom are from the United States and Canada. Approximately 40,000 people a year participate in Birthright trips, for which there is a much larger demand than can be satisfied because of the limited availability of funding.
Systematic research, conducted by independent scholars at Brandeis University, demonstrates that the impact of Birthright Israel is life changing. Participants, compared with similar non-participants, are significantly more likely to marry Jewish spouses, raise Jewish children, and be involved in the Jewish community.2
We encountered Bernie Marcus, cofounder of The Home Depot, earlier in this book, in Chapter 6, in which he explained his reluctance to turn his philanthropy over to a future generation of trustees. His preference for using his charitable assets during his lifetime has led to a number of impressive achievements. In the 1990s, Marcus created the Marcus Autism Center at Emory University to study the causes of and possible cures for autism and to provide clinical services to young people who had been diagnosed with this disease. He continues to support that center and also provides autism research support to other universities, including Duke University. After 10 years of involvement in the field, he concluded that a public advocacy organization was needed to create greater awareness of the disease and to spotlight the lack of adequate public and private funds required to conquer autism eventually. Marcus persuaded Robert Wright, then the CEO of NBC, along with his late wife Suzanne, to take on the leadership of Autism Speaks, which Marcus launched with a $25 million grant in 2005. In the years since its founding, Autism Speaks has become the dominant autism advocacy organization in the United States. Marcus continues to serve as a member of its board of directors.
In addition to the achievements of these three philanthropists, two of whom are still actively “giving while living” as this book is written, we have also touched on the accomplishments of many spend-down foundations of the past, including the creation of 5,000 schoolhouses catalyzed by the Julius Rosenwald Fund, the pioneering AIDS cocktail that came about with funding from the Aaron Diamond Foundation, and the John M. Olin Foundation’s creation of an influential conservative public policy intellectual infrastructure. Perhaps there are others of comparable importance but, as of now, additional examples are hard to come by.
Equally significant results have been achieved, and much more frequently, by perpetual foundations. This should make prospective limited-life foundation founders think twice about making the spend-down choice. What’s more, perpetual foundations that have achieved such outcomes have been remarkably successful in doing so while undertaking acceptable levels of risk. By balancing more-risky with less-risky initiatives, they have demonstrated a remarkable ability to achieve significant impact while maintaining the purchasing power of their capital and without suffering significant financial loss. Almost 100 cases detailing such perpetual foundation achievements are included in Casebook for The Foundation.3 Here is just a small but representative sampling of them: The Rockefeller Foundation’s efforts to produce a vaccine that prevents yellow fever, which earned Max Theiler, the foundation’s scientist, a Nobel Prize in Physiology or Medicine in 1951; the Robert Wood Johnson Foundation’s state-by-state initiatives to encourage clean-indoor-air laws and increase taxes on cigarettes, which significantly reduced teenage smoking; the Doerr Foundation’s pioneering collaboration with the New York and Connecticut Highway Departments to experiment with the creation of white lines on the borders of highways, which has reduced traffic accidents, saved many lives, and become the model for such highway lines nationally; George Soros’s Open Society Foundations’ funding of civil society organizations in Communist Eastern and Central Europe, which substantially contributed to the collapse of Communism there; and the Carnegie Corporation’s establishment of the National Board for Professional Teacher Certification, which created, for the first time, a national market credentialing public school teachers so that they could easily move to jobs in most other states.
In addition to the work of large foundations like these, numerous midsized and small perpetual foundations, many of them family foundations—and all of them focused primarily on a narrow geographical catchment area—are playing indispensable roles in their communities. The next chapter will look more closely at the ability of many family foundations to carry on generation after generation, maintaining both fidelity to their founders’ wishes and the philanthropic engagement of each new generation of family members. In today’s often heated ideological discussions about the social utility and/or fidelity to donor intent of perpetual foundations, the consistent performance of foundations such as these is almost always overlooked. Most of them are critical to solving or mitigating the problems that face their communities, and they often operate in close partnerships with community foundations.
It is also worth noting here that the decision to spend down a foundation is not necessarily irrevocable, and a few donors have found good reason to reconsider. For example, George Soros originally intended, and indeed announced, that his Open Society Foundations would be spent down in his lifetime but in 2011 made known that he had changed his mind. Following is what he wrote by way of explanation:
When I established the Open Society Foundations, I did not want them to survive me. The fate of other institutions has taught me that they tend to stray very far from the founder’s intentions. But as the Open Society Foundations took on a more substantial form, I changed my mind. I came to realize that terminating the foundations’ network at the time of my death would be an act of excessive selfishness, the equivalent of an Indian maharajah’s wives being burned on his funeral pyre. A number of very capable people are devoting their lives to the work of the Open Society Foundations; I have no right to pull the rug from under them. More importantly, we have identified a sphere of activity that needs to be carried on beyond my lifetime, and whose execution does not really require either Aryeh [Neier]’s presence [former president of Soros’s foundations] or mine. That niche consists in empowering civil society to hold government accountable.4
In my interview with Christopher Stone, Aryeh Neier’s successor as president and CEO of the Open Society Foundations, he elaborated on the plan for Soros’s continuing philanthropy:
We’re thinking of it now as an “indefinite foundation.” That is to say, it doesn’t have a spend-down plan. Its regular spending will be at a level that, given reasonable, prudent rates of return on the endowment, would allow it to go on indefinitely. But [Soros] is eager to have a budgeting process that allows us to respond with outsized spending when opportunities present themselves. He is not expecting the foundation to go. It’s not like Gates, where the Foundation has announced its plan to spend down twenty years after the death of the survivor of Bill and Melinda Gates. There’s nothing like that, but there is a desire… simply to allow it to continue for as long as that’s reasonable, given the opportunities presented by the circumstances.5
Meanwhile, other perpetual foundations are continually being created, including the Margaret A. Cargill Philanthropies. Cargill was one of the eight heirs to the Cargill grain corporation. When she died in 2006, she bequeathed the overwhelming bulk of her assets to a group of foundations she had earlier established. When her estate was settled in 2011, the value of the assets of the Margaret A. Cargill Philanthropies was estimated to be about $9 billion, placing her foundation among the wealthiest US foundations after Gates and Ford.6 Her instructions made clear that it was to be a presumably perpetual foundation, with a broad mandate to “address unmet needs; give individuals and communities the tools to become self-sufficient; [fund work] that will be sustainable after our support ends; and… build on and strengthen strong relationships within communities.”7