Philanthropy Summer 2016

LAB HEADS ON SCIENCE GIFTS • MARRIAGE AID • EDUCATING ENTREPRENEURS & TECHIES A PUBLICATION OF THE

S U M M E R

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y t i r e p s o r p r op y h t n a l i h p

Donor experiments catalyze economic growth Also: An open letter to the Ford Foundation on inequality

by Michael Gerson & Peter Wehner

PhilMag.org

th Annual Meeting CHARLESTON, SC

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You are invited to The Philanthropy Roundtable’s 25th Annual Meeting Keynote Speakers Include:

Arthur Brooks

president American Enterprise Institute

Gary Haugen

CEO International Justice Mission

Angela Duckworth

author Grit: The Power of Passion and Perseverance

Greg Lukianoff

president and CEO Foundation for Individual Rights in Education (FIRE)

Jonathan Haidt

professor of ethical leadership Stern School of Business, New York University

Darren Walker president Ford Foundation

Register by August 31 and receive an early registration rate of $1,095. A $50 group discount is applied when three or more participants register at the same time. Attendance at our Annual Meeting is limited to donors who make charitable grants and contributions of $100,000 per year or who expect to do so in the future. This is a solicitation-free event.

Keynote Sessions: Grit and Self-control: Determinants of Success?

Brooks & Walker: The Best Ways to Open Opportunity for the Poor The Freedom From Speech Movement on Campus How to Interpret the Constitution: A debate sponsored by the National Constitution Center, featuring the Federalist Society and the American Constitution Society

The William E. Simon Prize for Philanthropic Leadership

honoring

Additional Session Topics Include: Cage-busting Curriculum: The Coming Revolution in K-12 Content Delivery Clear Thinking About Foundation Transparency

Bruce and Suzie Kovner The Philanthropy Roundtable is pleased to announce the selection of Bruce and Suzie Kovner as the 2016 recipients of the William E. Simon Prize for Philanthropic Leadership. The Simon Prize honors the ideals and principles that guided Mr. Simon’s giving, including personal responsibility, resourcefulness, volunteerism, scholarship, individual freedom, faith in God, and helping people to help themselves.

Helping Low-income Families Build Savings, Credit, and Financial Security

Mr. and Mrs. Kovner will be honored during a special luncheon on Wednesday, November 16.

Labor Reform Strategies That Protect Workers, Taxpayers, and the Public Interest

K-12 Pre-Conference The Next Stage for School Choice: Supplying the Demand for High-Quality Private Options Tuesday, November 15 11:30 a.m.–5:00 p.m.

Developing and Retaining the Nation’s Best Teachers The Uses and Limitations of Rigorous Evaluation in Philanthropy

As school choice grows nationwide, there’s an emerging need to build a private and faith-based supply of excellent schools, providers, and a support system that includes necessities like talent pipelines, facilities access, and data transparency. This sector is changing quickly, and donors will play an increasingly vital role in helping it develop to maximize choice, quality, and growth.

Understanding Your Grantees’ Financial Statements When to Include—and Not Include—Family Members on Your Foundation Board

The pre-conference is offered at no additional cost.

Attendees do not have to participate in the Annual Meeting to attend the pre-conference.

Understanding Your Investment Manager’s Advice

ONLINE

E-MAIL

PHONE

HOTEL RESERVATIONS

PhilanthropyRoundtable.org

AnnualMeeting@ PhilanthropyRoundtable.org

(202) 822-8333

Charleston Place Hotel (888) 635-2350

table of contents

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features

18 T he Power of Science Philanthropy

A P U B L I CATI O N O F THE

11 I nterviews Denny Sanford on his $1.4 billion in giving to medical research, physics, and more. Goodwill CEO Jim Gibbons discusses social enterprise and the power of work.

Why private funding is so important to the experimenting that makes us smarter, healthier, and richer.

By Karl Zinsmeister

32 C losing the Marriage Gap

49 Ideas Good Blue-Collar News That Donors Can Use Investments in “middle-skill” jobs can open powerful upward-mobility paths.

By David Bass

An inventive philanthropic undertaking seeks to strengthen America by bolstering marital ties.

By Heather Wilhelm

Educating Entrepreneurs Want to increase prosperity by cultivating the next generation of wealth creators? Six things to consider.

By Bruce Gjovig and Timothy O’Keefe

38 B eware of Blind Spots

The Ford Foundation recently announced it would reorient all of its giving—about $500 million annually—to combat economic inequality. Two veteran social reformers encourage the foundation not to overlook the tough elements that are essential to the success of tough love.

By Michael Gerson and Peter Wehner

54 Books The Quiet Man Behind the Computer Revolution Gordon Moore’s tech vision changed modern times. He wants his giving to change life 10,000 years from now.

By Adam Keiper

44 A Gateway to Peace and Prosperity

A Texas couple create a new community to help women exit cycles of abuse.

By Anne Snyder

A Watchdog With Only One Eye Jane Mayer’s selective “exposé” badly distorts reality.

By Scott Walter

departments 4

Books in Brief Is the Gates footprint too big?

Briefly Noted

C hicks on camera. Couch-surfing in disaster zones. Teachers union fights for facelifts.

One million missing Christians.

10 Nonprofit Spotlight A healthier $30 alternative to dirt floors.

59 F ace to Face

Photos from the ACR Summit.

60 P resident’s Note

Reasons to join us in Charleston.

By Adam Meyerson SUMMER 2016

Adam Meyerson PRE SI D E N T

Karl Zinsmeister

VI C E PR E S ID E N T , P U BL ICA T IO N S

Caitrin Keiper E D I TO R

Ashley May

MA NAG I N G E D ITO R

Andrea Scott

A SSO C I AT E E D IT O R

Taryn Wolf

A RT D I R E CT O R

Ryan Shinkel I NTE RN

Jen Para

SPE C I A L P R O J E CT E D IT O R

Arthur Brooks John Steele Gordon Leslie Lenkowsky Christopher Levenick Bruno Manno John J. Miller Tom Riley Naomi Schaefer Riley William Schambra Evan Sparks Justin Torres Scott Walter Liz Essley Whyte

C O NTRI B U T IN G E D IT O R S

Philanthropy is published quarterly by The Philanthropy Roundtable. The mission of the Roundtable, a 501c3 tax-exempt educational organization, is to foster excellence in philanthropy, to protect philanthropic freedom, to assist donors in achieving their philanthropic intent, and to help donors advance liberty, opportunity, and personal responsibility in America and abroad.

All editorial or business inquiries: Editor@PhilanthropyRoundtable.org Philanthropy 1120 20th Street NW Suite 550 South Washington, D.C. 20036 (202) 822-8333 Copyright © 2016 The Philanthropy Roundtable All rights reserved Cover: gettyimages/Science Photo Library

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Eagle hatchlings in the heart of Washington, D.C.

Private Schools for the Poor The disastrous state of public education in the very poor and historically ill-governed African nation of Liberia was spotlighted recently when 25,000 high-schoolers took the annual exam for admission to the University of Liberia and not a single one passed. To fill its new class of 1,600 students, the college had to drastically chop the required scores.

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This was the last straw for reformist President Ellen Sirleaf, who pronounced the government education bureaucracy “a mess” and demanded a new approach to schooling in her country. This spring the government announced a test program, which will be rolled out more broadly if it succeeds: Management of 50 elementary facilities will be outsourced to an operator of innovative private schools, with the bill paid by American investors. These schools will be run by Bridge International Academies, a social enterprise launched in 2009 with funding from Pierre ­Omidyar, and built up with further support from Steve Beck, David Weekley, Bill Gates, Vinod ­Khosla, and Mark Zuckerberg (who recently contributed $10 million). Research a few years earlier that provided intellectual backing for low-cost private schools like Bridge was paid for by the ­Templeton Foundation.

The result of all this support is a crop of new private schools created to serve families living in the world’s poorest slums. Officially, education in those places is provided by the government at no charge. In practice, these state-run schools are often ­terrible— with teaching jobs distributed by nepotism rather than skill, and instructors who often demand bribes, and frequently don’t show up, or teach when they do.

istockphoto.com / Riccardo Lennart Niels Mayer

Reality TV The American Eagle Foundation is a Tennessee nonprofit that helps conserve birds of prey. When some of its leaders were on Capitol Hill a few years ago for an educational presentation, they learned that a pair of wild eagles had just built a nest in a magnificent tulip poplar tree right in the heart of Washington. After the eagles left for their annual migration, foundation staffers returned to D.C. and, with the help of volunteer tree climbers, installed two high-definition video cameras right above the nest. This effort paid off when the eagles returned this February and laid two eggs, which hatched in March. The public was riveted by the remarkably vivid livestream, which was viewed more than 7 million times as the chicks (dubbed “Freedom” and “Liberty” after 36,000 votes) emerged from their shells. This yielded valuable publicity for the foundation’s conservation efforts.

In many other places as well, nest-cams have become enormously popular. The Cornell Lab of ­Ornithology has operated 16 different nest-cams, offering peeks at snowy owls in Alaska, ­California condors in a west coast cave, great blue herons in upstate New York, albatrosses in Hawaii, and hummingbirds in Texas. Some of the voyeurs tapping into today’s remarkable nature feeds, however, forget they are observing wild creatures, not Bambi movies. Eventually, a nonprofit wild-bird-cam is likely to capture aggressive sibling rivalry, all kinds of predation, even cannibalism.

Some viewers yowled when a cam in Pittsburgh revealed that a pair of bald eagles were feeding their chicks a housecat. If that raises the fur on the back of your neck, bear in mind that cats are also prime eaters of chicks—so that battle rages in both directions.

Sometimes even charitable education must be red in tooth and claw.

American Eagle Foundation

briefly noted

istockphoto.com / Riccardo Lennart Niels Mayer

American Eagle Foundation

Liberia’s recent disaster is just one example among many. Miserable student results are common in the public schools of many low-income countries. And then there are the millions of children who don’t even have access to a school at all.

In response, private schools are springing up like mushrooms—featuring bare-bones buildings but advanced, heavily scripted curricula distributed on electronic tablets, and energetic instructors hired from the same slum where the school is located. And poor parents are clamoring to enroll their children, despite monthly tuition of $2 to $6 per student, when government schools are free. (In the Liberian pilot, the government is paying the tuition, so parents bear no cost.)

Bridge is currently educating 110,000 children, and opens a new private “school in a box” in Africa or Asia every couple days, on average. In impoverished districts of south India, fully half of all children are now enrolled in a low-cost private school similar to the Bridge model. In the slums of Accra, Ghana and Lagos, Nigeria, it is two thirds to three quarters.

And in every region where they have been carefully studied, students from these super-cheap private schools significantly outscore counterparts in government schools (after adjustment for demographic differences, IQ, and so forth). The private-school teachers are much more likely to actually be t­ eaching when unannounced school visits are made. The school day is much fuller (at least eight hours of active instruction per day at a Bridge school). And the private schools are better equipped with toilets and drinking water. To top it all off, this is achieved at just a fraction of the total cost of the ineffective government schools.

Welcome, Liberians, to an exciting educational solution.

The Face Lift That Buffalo Schools Really Need In the Buffalo, New York, public schools, an abysmal 12 percent of students are proficient in reading and 15 percent proficient in math on state assessments. So what are local t­eachers’-union officials spending time and resources on? Trying to secure benefits for teachers who want to undergo cosmetic surgery. Though new superintendent ­Kriner Cash has announced he wants to give B ­ uffalo schools a new look, this is probably not what he had in mind.

Bridge opens a new private school in Africa or Asia every couple days.

In a small victory for common sense, the B ­ uffalo School Board rejected $5 million that would have gone toward adding cosmetic surgical procedures to an already plush teacher-benefit package. Those funds were instead redirected to future teacher salaries. Union officials, however, didn’t take kindly to that slap on their wrinkled faces, and are now ­fighting in court to retain the benefits.

Contrary to this silly news, there are serious education issues to attend to in Buffalo. The city is the latest in a string of struggling urban school districts that have adopted a “turnaround” model to try to fix chronically failing schools. Under New York’s “receivership” law, a school superintendent is given special authority to circumvent regulations that cramp any attempt to shake up a school.

Five schools in Buffalo classified by the state as “persistently failing” are now being put into turnaround status.

Other cities and school districts have followed this approach previously. These include Memphis, Tennessee; York, Pennsylvania; and of course New Orleans, Louisiana. In New Orleans, the new recovery school district allowed wide innovation and a bloom of charter academies that dramatically improved student results.

Education donors should keep an eye on the Buffalo receivership experiment. Whether it s­ ucceeds will to a considerable degree depend on whether the teachers’ union lets real reform unfold, or whether

PhilAphorism

The proper aim of giving is to put the recipient in a state where he no longer needs our gift.

—C. S. LEWIS

(from The Almanac of American Philanthropy) SUMMER 2016

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briefly noted

Record-breaking Gifts for Vets In April, billionaire hedge-fund manager Steven Cohen announced a $275 million commitment to mental health care for veterans and military families. The bulk of the funding will go to building a nationwide network of clinics that provide free mental health care to military servicemembers, veterans, and their families, with some funding to support research. This gift is the largest philanthropic commitment ever in support of Americans who serve in the military.

Cohen plans to open 25 clinics around the country by 2020 and serve 25,000 patients per year. The c­ linics will operate entirely outside of the ­Department of Veterans Affairs and address some of

Steven Cohen at a Veterans Summit run by the Robin Hood Foundation.

-35% 2013 applicants to Teach For America: 57,000 2016 applicants to Teach For America: 37,000 Lesson: Even the most inspired education reform can be damaged by a determined vilification effort run by unions and “equity” campaigners.

Washington Post, June 1, 2016 6

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Paying for Charitable Excellence One of the main influences of the popular charity raters that have sprung up over the last decade has been to put downward pressure on the indirect costs of nonprofits—salaries for staff, training, research, communications and marketing, fundraising, and administrative oversight. A 2015 poll for the Chronicle of Philanthropy found that when they are deciding where to donate, 84 percent of Americans now consider “spending a low amount on salaries, administration, and fundraising” important.

Avoiding bloat and inefficiency is highly desirable, especially since most nonprofits lack the market pressures that push businesses to be thrifty. But an exaggerated emphasis in this direction can result in low-quality employees, weak research and development, no money for tracking results, and other cut corners that damage charitable effectiveness.

When they fund a specific program or service, most donors today allow recipient organizations to factor in, above direct costs, just an additional 15 percent to run the organization. This sometimes results in what charities call a “starvation cycle.” They are expected to create and operate excellent initiatives, to conduct careful measurement and followup research, to innovate in ways that will make big dents in societal problems, but their supporters allow only scant funding to make this happen.

To get a better sense of actual indirect costs at charities, the Bridgespan Group recently did detailed analysis on the financial records of 20 p ­ rominent

airbnb

they entrench and block change. The results will influence whether this strategy is able to spread and yield good results in other cities with consistently low-performing public schools. Alas, there is no shortage of candidates. —Pat Burke

gettyimages / Bloomberg / Contributor

the many inadequacies that regularly bring scandal to that very dysfunctional $160 billion-a-year federal agency. They will provide same-day intake screenings, guarantee a first appointment within one week, and offer a range of solutions from transportation help to telemedicine, ensuring vets get the care they need when and where they need it. And eligibility extends beyond those covered by the VA, like family members. Alongside these clinics, Cohen Veterans Bioscience, a separate nonprofit focused purely on research, will work on improving diagnosis and treatment of brain disease.

This commitment isn’t Cohen’s first in the field; it isn’t even his first record-breaking gift to support vets. In conjunction with the Robin Hood Foundation he underwrote a free mental health clinic at NYU in 2013, and made a $17 million commitment to study post-traumatic stress and traumatic brain injury—the single largest philanthropic gift for research into these conditions. —Thomas Meyer

airbnb

gettyimages / Bloomberg / Contributor

nonprofits with annual budgets r­anging from $2 million to $650 million. It found that the indirect costs of these groups ranged from 25 percent for direct-service charities to 63 percent for nonprofit research labs. The overall median indirect cost of running good charitable programs was 40 percent.

Businesses also have varying levels of indirect costs. Bridgespan did the same analysis on firms in the S&P 500 and found that companies producing consumer staples had median indirect costs of 34 percent, while information technology firms reached 78 percent.

In an article about their work in Stanford Social Innovation Review, the researchers quote some funders who are trying to bring more nuance to their treatment of the overhead costs of doing good charitable work. Daniel Stid of the Hewlett Foundation has started providing grantees with resources that help them calculate their true indirect costs when applying for grants, and he modified the foundation’s application form to encourage grantees to account for these expenses fairly. Fred Ali, CEO of the Weingart Foundation, reported that his group is trying to help applicants in similar ways.

For more on this important subject, see “Paywhat-it-takes Philanthropy” at SSIR.org.

Disaster Response, Airbnb-style Among the 17 new signatories to the Giving Pledge in June are the Airbnb co-founders Brian Chesky, Joe Gebbia, and Nathan Blecharczyk. They’re no strangers to philanthropy.

The trio who started the online vacation-rental marketplace had their first large-scale experience in giving after Hurricane Sandy struck in 2012. One host in New York City offered her home for free, and 1,400 Airbnb hosts followed her lead.

Inspired by this spontaneous action, the co-founders began a formal disaster-response initiative the next year, to provide free hospitality around the world after calamities. Hosts have offered homes in Greece after an earthquake struck, in London following flooding, and in Canada with the recent wildfires. By staying in homes and neighborhoods after tragedies, people can put their lives back together with support from a community, rather than doing it on their own in an isolated hotel room or chaotic group shelter.

Most recently, the company gave more than $300,000 in credits to aid workers who responded to the refugee crisis in southern Europe. The leader of Airbnb’s disaster-relief program, Kellie Bentz, says that these donations give nonprofits more flexibility in placing aid workers. “Agencies use the travel-credit program for the first couple of weeks to identify a location that will allow them to build a base camp for a larger group of volunteers or relief workers,” Bentz told Philanthropy Age. “The ­short-term help is often useful in letting them create a more sustainable operation.”

Airbnb also started a random act of kindness campaign last year called #OneLessStranger. It gives 100,000 hosts $10 to do something nice for someone they didn’t know. With their recent pledge to give away most of their wealth, the co-founders have now put their personal fortunes into solving problems via philanthropy. —Jen Para

These pioneers of the “sharing economy” have committed to sharing over half of their fortunes.

A Million Missing Christians In March, Secretary of State John Kerry officially announced that ISIS violence against Yazidis, ­Christians, and Shiite Muslims was genocide—the first time the U.S. has declared genocide since 2004’s Darfur. He accused ISIS of “ethnic cleansing” and “crimes against humanity.”

As part of its extensive efforts to support ­C hristians in the Middle East, the Knights of

10,000

The number of black and Hispanic males alive today in NYC who would be dead if that city’s homicide rate had remained at its 1990s level.

Lesson: Public order and active policing are more valuable to minorities than to any other citizens, a reality being tragically underlined today in cities stretching from Baltimore to Chicago to Los Angeles.

CompStat data cited in AWC Family Foundation

Hillsdale College lecture by Heather Mac Donald, April 2016.

SUMMER 2016

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Toufic Baaklini speaks out for Middle Eastern Christians under siege.

A Mormon Mission Comes Home In April 2001, Gordon Hinckley, then the president of the Church of Jesus Christ of Latter-day Saints, announced the formation of the Perpetual Education Fund, a twenty-first-century successor to an 1849 program called the Perpetual Emigration Fund, which assisted European Mormon converts with immigrating to the United States and settling in the Utah Territory.

The 2001 version of the program would assist not with migration, but with helping members of the church in developing nations gain an education.

PhilAphorism

It is easy to love the people far away. It is not always easy to love those close to us.... This is where our love for each other must start.

—MOTHER TERESA

(from The Almanac of American Philanthropy) 8

PHILANTHROPY

“New York” / Geo Bellows / 146 E 19 / N.Y.

­ olumbus had co-authored a 278-page report C submitted to Kerry just eight days before this declaration. The report named more than 1,100 Christians believed to have been killed by ISIS. It listed churches that have been attacked. It reproduced a price list ISIS uses for Christian and Yazidi sexual slaves.

The other nonprofit that co-authored this work with the Knights of Columbus was a group called In Defense of Christians. Started in 2014 by ­L ebanese-American businessman Toufic Baaklini and others, it advocates for Christians who live in the ­Middle East. That is a highly endangered population. In 2003, Iraq was home to more than 1.5 million ­Christians; today’s count is fewer than 500,000.

“Where there is widespread poverty among our people, we must do all we can to help them to lift themselves, to establish their lives upon a foundation of self-reliance that can come of training. Education is the key to opportunity,” said Hinckley.

Around the same time, Hinckley also authorized a separate program that would create hundreds of employment centers across the globe to provide assistance in finding and securing jobs. The two programs worked independently of each other for over a decade.

In 2012, Robert Gay, co-founder of a microlending nonprofit organization called Unitus, spearheaded a study of the Perpetual Education Fund and recommended combining it with the employment centers. That was done under Gay’s oversight, and the Perpetual Education Fund became an umbrella for offering poor people services, educational resources, and schooling loans.

Self-reliance service centers were set up in poor areas around the globe. More than simply helping people find employment, the program aims to teach people the requisite skills to secure long-term independence. Participants in a 12-week training program select one of three tracks: building job-search skills, starting a business, and pursuing education for better work. The help is free, but participants are held accountable for homework assignments, group discussions, and sequenced instruction.

“We teach everything in a group setting, which comes a little bit from my microcredit background,” says Gay. “That’s important because in addition to the individual mentoring we provide, the group itself provides peer mentoring.”

Today, nearly 1,200 international self-reliance centers rely on 5,000 volunteers who serve as group facilitators and mentors. The church employs around 350 people worldwide who work primarily behind the scenes, training the group facilitators and building the employment network. In 2015, self-reliance centers saw approximately 170,000 people actively involved in the training groups. After completing the program, average participants find work in less than a month.

The self-reliance services program has proven so successful that it is now expanding to North ­America.

By the end of 2016, hundreds of new locations will be established across the U.S. and Canada. In these wealthy countries as well, individuals who have struggled in the job market will get help.

The services are free. They are open to anybody. Worldwide, Gay estimates about three quarters of participants are Mormons. While program content is anchored in the tenets of the LDS faith, the church is currently working on a

In Defense of Christians

briefly noted

nondenominational version focusing on teachings and knowledge from a variety of religious leaders and philosophers.

“The ultimate goal,” says Mike Murray, vice chairman of Self-Reliance Services for the church, “is that people learn to live on their own and become positive contributors to their families, to their society, to their communities.” —Marques Chavez

“New York” / Geo Bellows / 146 E 19 / N.Y.

In Defense of Christians

Saving Education Savings In June 2015, Nevada lawmakers passed the nation’s first-ever program that lets any family in the state set up an Education Savings Account. Parents of students enrolled in public schools can save money useable for education in the best interest of their children. This could include private-school tuition, or supplemental therapies or tutoring, or online classes, or resources for students with special needs.

The bill’s sponsor and champion has been state Senator Scott Hammond, whose day job is as assistant principal at a Las Vegas charter school. As soon as the bill became law, though, school-choice opponents pounced with two separate legal challenges that are now making their way through the Nevada court system. A Las Vegas judge shot down one of these challenges, rejecting the argument that a parent using an ESA for his or her child’s education violates the separation of church and state. Further appeals will continue.

It’s likely that the two suits will ultimately be consolidated and end up before the Nevada state Supreme Court. Donors and advocates of school choice and parental empowerment will watch Nevada closely to determine whether ESAs can withstand legal attacks. If so, they could become a gamechanger for students in need of more schooling options in many states. —Pat Burke

The Political Agenda at the IRS Covering IRS double-standards on approving the nonprofit applications of different organizations, National Public Radio recently reported the following: “Republicans allege an organized effort, possibly run by the White House, to aggressively probe and then stall the applications in order to handicap its political opposition…. Democrats blame it all on bureaucratic mistakes, misjudgments, and understaffing…. Until now, what’s been missing is a list of the nonprofit groups that got special scrutiny—a

list that presumably would show whether the agency had a political agenda or not. Now, thanks to filings in a federal lawsuit in Ohio, there is such a list, with 426 names on it. And yes, it’s top-heavy with conservative groups.”

Fully 66 percent of the organizations whose applications were resisted had a conservative orientation, according to NPR, versus just 16 percent with a liberal orientation. The rest that got dragged out by IRS staff were other kinds of nonprofits.

A National Gallery Stocked By Private Citizens This year marks the 75th anniversary of our National Gallery of Art—a gift to the nation from financier Andrew Mellon.

It continues to be private donations that keep the gallery brimming. The institution notes that “every work of art in the collections of the National Gallery of Art has been privately given or purchased with privately donated funds.”

The painting above, “New York” by George Bellows, is one of approximately a thousand works of art that have been given to the NGA by the Mellon family alone.

SUMMER 2016

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nonprofit spotlight EarthEnable

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Solving health problems from the ground up. Dirt floors are a public-health problem throughout Africa. Read here about an American nonprofit’s solution—using an old California technology and a for-profit business structure.

I n an interesting example of the way “venture philanthropists” are using market disciplines to improve charitable work, the organization is fully owned by an American 501c3 but set up as a for-profit business in Rwanda, with an intention to be “financially sustainable.”

The effort was launched with and continues to receive significant support from donors large and small, including the Mulago Foundation. “If she is successful building her business,” states Mulago’s Laura Hattendorf, “millions of people currently living with dirt floors will be able to lead much healthier lives.”

EarthEnable has so far installed about 1,500 floors. It has eight full-time and PHILANTHROPY

nine part-time Rwandan staff working as masons, laborers, oil producers, marketers, and administrators. It is hiring a director of operations as this is written, and has plans to upgrade millions of homes in the years ahead. The floors cost about $30 each, which EarthEnable finances over several payments. It is looking for ways to make the floors even less expensive, including testing a do-it-yourself product.

The new floors affect more than health.

“The floors change the way people view their houses,” says Clovis Shyaka, a Rwandan manager at EarthEnable. For many families, they transform the “mindset on the way they see hygiene.” The house becomes “a place of pride.” —Andrew Evans

Kevin Tosh

Two termite nests—each about six inches across. That’s part of what a team of w ­ orkers found when they excavated the dirt floor inside Martha’s home. The ­R wandan woman living about a twohour drive from Kigali has been sleeping, cooking, and living with insects scurrying around her.

And that’s the least of it. Dirt floors— which is what 80 percent of Rwandans (and more than a billion people worldwide) have in their homes—are, by definition, dirty. Puddles form during rainy seasons.

The air is dusty when it’s dry. If someone spills food or gets sick or a baby soils its bed, germs soak in. The floor becomes a breeding ground for parasites and bacteria. The results are predictable: diarrhea, infections, respiratory issues, and insect-borne diseases.

C oncrete is the obvious solution, but the cost puts it out of reach for most Rwandans, 40 percent of whom live on well under a dollar a day. Enter an old California solution: adobe floors. Layers of gravel, sand, and fine clay are packed with pounders and then soaked with an evaporating oil that leaves the surface hard, washable, and inhospitable to most vermin. In the U.S., adobe floors are sealed with linseed oil, but that is too expensive in Rwanda. So Rick Zuzow, a Stanford-trained biochemist, and others have found local-oil alternatives that do the job affordably.

The result is a floor nearly as durable as concrete yet 40 to 80 percent less expensive. And sealed earthen floors reduce the incidence of childhood diarrhea by 49 percent and parasitic infections by 78 percent.

It’s a simple, practical, economic solution to a widespread problem.

The idea came out of an “extreme affordability” class that Gayatri Datar took while getting her MBA at Stanford. She co-founded EarthEnable in 2014 with a simple mission: “No more dirt floors.”

interviews Home Society for abused children who are legally removed from their families. We find them foster homes and adoptive homes.

More recently I created a nonprofit, Sanford Health, where we’re able to serve many more of these kinds of children.

I love children. That’s my passion.

Recently I was having lunch at a restaurant in Sioux Falls, and a pregnant woman comes up. She looked like she was nine and a half months pregnant. She had a hose coming from her nose and a medical device attached to her, and she said, “Mr. Sanford, I’m sorry for interrupting your lunch, but I just have to tell you, you saved my life and my baby’s life. Thank you very much.” She had gone to another healthcare system where they said, “Listen, we’re probably going to have to terminate your baby.” She went to get a second opinion at our hospital, and now she’s going to have a healthy delivery. Doesn’t get any better than that.

Denny Sanford, 80, tried to retire half his lifetime ago. He won’t make that mistake again. Today he continues to manage his credit-card business, while also handing out $1.4 billion (and counting) in philanthropy—without any foundation or staff.

Arizona State University

DENNY SANFORD Denny Sanford, motherless from a young age, spent the summer after high school in juvenile detention following a drunken brawl. A judge released him early on the condition that he go to college. Within a year of graduating he started a construction chemicals company, whose sale a couple decades later enabled him to comfortably retire at the age of 45. He went to Florida. He improved his golf game. He was bored.

Back on his home turf in the upper ­Midwest, he bought a small bank chain in Sioux Falls, South Dakota, and transformed it into a powerhouse national credit-card company. With its phenomenal success he began his philanthropy in earnest, initially focusing on foster children, whose problems he understood from his own life. From there

Philanthropy: Part of that network is a pediatric hospital disguised as a fairy-tale castle?

Sanford: The castle was unusual, but now we’re putting that same format into a lot of places around the country. The castle design makes hospitalization more special and less scary for child patients, who deserve everything that we can do to brighten their experience.

We’re also putting 300 medical clinics in Ghana, 30 in China. Sanford Health serves an area that is very rural. We go from ­Oregon to Oklahoma. In bringing good care to that lightly populated area we have developed a strong expertise in telemedicine, the dispensing of specialized medical advice electronically, even when you don’t have a doctor right in front of the patient.

We got good enough that we are now able to apply it to other populations.

he branched into medicine, consolidating regional health-care systems throughout the Dakotas and several neighboring states into a nonprofit super­system. He donated roughly $1 billion to various forms of medical philanthropy, including a children’s hospital designed like a fairy-tale castle, and a major effort to combine genomic medicine with primary care.

Sanford has also given more than $200 million to support regenerative medicine and encourage collaboration among top scientists at a group of f ive San Diego biomedical research institutes. It was at this medical mecca that Philanthropy caught up Philanthropy: So you’ve gone from localwith Sanford for a chat. ized giving in your own community to larger audiences.

Philanthropy: When did you first get Sanford: I like to put together organiinvolved in philanthropy? zations working on a common problem.

Sanford: About two decades ago, I gave Classic example: In San Diego we have $2 million to the South Dakota Children’s one of the biggest children’s hospitals in SUMMER 2016

11

interviews the country; Ernie Rady just donated $120 million to it for genetic research. I took a look and realized, “They’re going to develop a genetic database which is going to cost hundreds of millions of dollars. Once that tool is developed they should share it and combine it with work that other hospitals are doing.” So I created a national partnership of children’s hospitals. There are now 12 participating. Why not share information and get to solutions faster? It saves a lot of money and a lot of time.

and clinical practice. Our internists go through additional training to tailor the care of each individual patient to his or her genetic information. We’ll have medical staff involved in building a whole portfolio of people’s genomes—not just as researchers, but as trusted care providers who can translate this knowledge to the public.

A GOLD MINE FOR DARK MATTER

Philanthropy: Other kinds of science giving by you have spurred some of the most advanced physics experiments in the world.

How did you become involved in making that happen?

Sanford: One of the deepest gold mines in the world is located in South Dakota.

When it closed down, physicists started conducting experiments on neutrinos and other particles deep in its chambers, where the overlying earth shields out cosmic radiation. I invested a lot of money seven years ago in converting the mine so it could be used for these kinds of experiments.

I was just out at what’s now called the Sanford Underground Research ­Facility (Sanford Lab), and the scientists are so excited about making discoveries

Astronomers have demonstrated that as much as a quarter of the universe is made up of some material which is invisible to conventional imaging methods. The gravitational effects of this invisible matter can be seen, even though the material itself cannot currently be detected. Until someone figures out how to observe, measure, and categorize what is currently referred to as “dark matter,” many of today’s most pressing uncertainties in physics and cosmology will remain unexplained.

The Homestake gold mine in South Dakota is a perfect location for a dark-matter detector, because its open caverns have almost 5,000 feet of rock overhead to shield out the cosmic radiation that surrounds us on the surface of the Earth, creating false signals in instruments created to detect dark matter. After the mine closed in 2003, various government agencies had hoped to create a permanent physics lab in the underground site, but they all failed to find the necessary funding and organization.

In swooped Denny Sanford, who put up $70 million to secure the mine, pump water out of its shafts, and create the Sanford Underground Research Facility. This sparked

the state of South Dakota to commit additional funds, and the U.S. Department of Energy to underwrite the cost of science experiments on the premises.

The first such experiment, known as the Large Underground Xenon detector, went into operation in 2013 and soon excited physicists by ruling out one favored theory on the nature of dark matter. The sensitivity of the detector is now being increased several hundred times by physical upgrades, so successor tests can be run. A second important experiment underway at Sanford, called the Majorana Demonstrator, is searching to explain differences between matter and antimatter, which could rewrite today’s standard theory of physics. In 2014 Congress approved a third major particlephysics experiment to be conducted in the Sanford Lab. It will involve beaming a string of neutrinos right through the earth from Illinois to South Dakota to test the behavior of the particles and clear up some mysteries fundamental to the origins of the universe. Four other pioneering experiments are in process within the Sanford Underground Research Facility as this is written.

Philanthropy: You also made a major gift in the past couple years for personalized genetic medicine. Can you tell us more about that?

Sanford: The name of the program is ­Imagenetics. It aims to bridge the separation between laboratory research

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PHILANTHROPY

there that could change the world. The lab I was in last week was 4,850 feet ­underground—almost a mile. The deeper you go, the more shielded the experiments are from interference, and we could potentially put laboratories 8,500 feet down in our mine.

I wanted this to happen in South Dakota. South Dakota’s been so good to me. They’ve got a work ethic out there second to none. And my success, and all of my donations, are a result of my business in that state. So I went to the governor and said, “We need this. Look at the employment that we can bring into our state.

What’s it going to cost to go all the way down 8,500 feet?” He told me it would be $70 million beyond what the state could finance. I said, “I’m in. Let’s do it.”

Philanthropy: What’s it like down in the lab?

Sanford: Since the 1860s, 360 miles of tunnels were dug to take out millions of dollars worth of gold. The elevators used to take the miners down a mile deep in three minutes. Today, with increased safety regulations, visitors and scientists get to 4,850 feet in 10 to 15 minutes.

To avoid introducing outside contamination into the experiments much of the equipment and tools need to be made down there. And it’s a triple clean facility.

There are water drums surrounding the centrifuges. All kinds of exotic protections.

Philanthropy: How did you move from South Dakota donations to giving in ­California, and what’s your focus there?

Sanford: Well, I have some very serious allergies: I’m allergic to slipping off roads and shoveling snow. So, at my age, I decided to spend more time in southern California.

The first local project I connected with was what was then called the ­Burnham Institute. They approached me with an opportunity to make headway on Type I diabetes and some very rare children’s diseases. So I came aboard.

The joy for me: I held five kids on my lap in the past year who would not be alive today had we not done this. Their condition was so rare, only a handful of people around the world have it. We now have abilities to save their lives. The parents are so grateful, you feel good yourself.

And then there is longer-term work.

We’ve got a major group within our institute down here that’s studying children’s diseases.

They’ve got some new technologies that are absolutely state of the art, including applications of stem cells. Because of the FDA, they have to go through a lot of very expensive trials. It costs a minimum of a billion dollars to get a drug approved, often much more.

And so you better be sure where you’re going pretty early on.

Philanthropy: You’ve said that you see your giving as investments rather than donations. How do you set expectations for what your gifts are going to accomplish?

Sanford: The most difficult part about doing research philanthropy is that the payoff on your investments can be decades away. But I lost my mother at age four to breast cancer, so progress is one of my passions. I invested in Type I diabetes a decade or so ago, and we’re still a long way from solving that. But we’re getting there.

In fact, Sanford Health has a clinical trial underway right now where a child’s own cells are used to improve insulin ­production, the first such therapy to enroll adolescents. This advance, along with our work in genetics and pediatric cancers, was recently honored at a Vatican conference on regenerative medicine. Medical leaders from around the world were there, with different perspectives but a common purpose. It was a wonderful event, and we even had an opportunity to be greeted by the Pope. For a little Presbyterian kid, that was pretty good.

Philanthropy: The San Diego medical research institute was first known as the Burnham Institute, then Sanford Burnham when you supported it, and now Sanford Burnham Prebys Medical Institute. A mouthful! Each time a big donation came in, an additional name was added. How was this negotiated, and what are your thoughts about naming generally?

Sanford: There was consideration given to calling Sanford Burnham Prebys the La Jolla Cancer Institute instead, or just the ­Medical Research Institute. But that didn’t shake anybody’s bones. Malin Burnham is Mr. San Diego and putting his name on the organization had value beyond the money he gave. Then he twisted my arm and said, “Let’s put your name on it.” And we went

to our friend Conrad Prebys. I would say if I was introduced to National Unithe institute is really successful, in ten years versity president Mike Cunningham. I there are going to be ten names on that flag. told him, “Right here within two miles of each other in San Diego I’m involved Philanthropy: You don’t have any staff to with three major medical-research administer your philanthropy? groups that have the prestige to hire Sanford: You’re looking at him. I have a the best scientists in the world. But we bookkeeper and a great assistant who directs can’t find enough development people to traffic for me, but no, I just do it myself. I bring them here.” So he put together a focus on large projects, usually things that team to develop a textbook and training I’ve created or that really catch my eye. program to help nonprofit professionals improve their fundraising skills and Philanthropy: This includes a $19 million manage their programs. I’m pleased with gift to Arizona State University for teacher the result. In its first year, so far we’ve training—the Sanford Inspire Program.

Sanford: I was impressed with the work of PUSHING Teach For America, a great organization.

COLLABORATION Up in South Dakota, we have graduates from very impressive schools living on THAT TURNS Native American reservations and giving RESEARCH INTO those kids new opportunities.

Wendy Kopp, the founder of TFA, RESULTS came to me looking for funding, and I said, Denny Sanford has given more than $200 “Your program is too good to keep it just million to a “collaboratory” that aims to in poverty-level schools.” I talked her into knit together in cooperative investigations coming down to Arizona State University five adjacent San Diego research centers: and creating the Sanford Inspire Program, the Sanford Burnham Prebys Medical a curriculum we provide to teachers’ colDiscovery Institute, the Salk I­ nstitute for leges at no cost. We also have 33 modules Biological Studies, the Scripps Research that are freely available to teachers already Institute, the La Jolla Institute for Allergy in the profession. It shows them how to and Immunology, and the University of inspire, not just teach subject matter. New California, San Diego. Over 150 profitYork and other major school systems have making companies have been spun out of been using it, 4,000 teachers and counting. the five nonprofits that are members of the The chancellor raves about it, and the participants absolutely love it.

Sanford Consortium.

Guided by a Nobel-studded scientific I take surveys every so often. I ask, in your nine years of grade school, how many steering committee and what COO Jeff teachers did you have that really sat you Steindorf calls the “strongest board in San down and lit your fire and got you believDiego,” the consortium supports crossing in yourself ? Probably just a couple, organizational, interdisciplinary experiments right? And that’s the problem. All teachin state-of-the-art facilities. There is ers want to do this. They want to, but they a particular interest in getting useful don’t have the tools. Sanford Inspire gives discoveries out of the lab and into medical them a toolbox. Essentially, it’s getting kids practice. Currently the consortium has to believe in themselves, and setting high three clinical trials under way—­therapies standards and high goals. for cancer, for diabetes, and for spinal cord Philanthropy: Tell us about your latest project, a new program to help train a more effective philanthropic workforce.

Sanford: This is for people trying to raise funds on a day-to-day basis to keep their organizations going. Our program is designed to help them better connect their needs with donors’ interests, to the benefit of all.

SUMMER 2016

­regeneration—that have emerged from its research. Stem cells are a particular area of interest. Pathologist David Cheresh, whose work focuses on reversing drug resistance in cancerous tumors, says these successes “could only have been done with Sanford’s vision” in combining disciplines and supporting the whole trajectory of discovery from basic research into useful therapies.

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interviews trained 5,550 boots-on-the-ground people who are hired to go out and knock on doors, giving them the basics to raise support for their programs effectively. A gal called me the other day and said, “I paid $400 to go to the class. The first day out working with a donor, he gave me a $10,000 check.” Investment paid off !

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The youngest of eight kids, Jim Gibbons started losing his vision in third grade. That didn’t stop him from rising to CEO of Goodwill Industries—one of the country’s largest and most effective nonprofits, with more than $5 billion of annual revenue and a flexible decentralized structure for helping the disabled and other strugglers support themselves through work.

JIM GIBBONS In an off ice park outside the Washington Beltway in Maryland, there’s a nondescript building marked “Member Services ­Center.”

It ’s the headquarters—or, better put, anti-headquarters—of Goodwill Industries.

Goodwill is one of America’s most effective trainers and employers of disabled, formerly addicted, and special-needs adults, and with more than 3,100 stores, hundreds of workforce programs, and over $5 billion of revenue every year, it is a sprawling enterprise. G ­ oodwill, though, is not a centralized institution; it’s a network—an association of 164 independent Goodwill members, each with its own board, business practices, and income streams.

This nonprofit ecosystem is loosely guided

by Jim Gibbons. The Indiana native graduated from Purdue University despite losing the last PHILANTHROPY

of his vision during college, became the first blind person to graduate from Harvard’s MBA program, oversaw a subsidiary of AT&T, and ran National Industries for the Blind before ­becoming Goodwill president in 2008.

Philanthropy sat with Gibbons to learn more about his organization’s mission, its decentralized structure, the barriers to work and self-support among workers with challenges, and how he manages and teaches resilience.

Philanthropy: Some of us may recognize Goodwill only as a thrift store. What are we missing?

Gibbons: Retailing used goods is our social enterprise. Our mission revolves around work and employment and services that help individuals overcome barriers so they can experience the power of work. Goodwill branches run programs that support people as they seek independence.

Taryn Wolf

Philanthropy: You recently received the Horatio Alger Award. Did you ever expect to be so successful that you’d be in this position?

Sanford: Not a clue. Not a clue. I came from a very poor family, and made my way along.

As I said, my mother died when I was four.

I had to become more independent because of that. Thank God my dad—he was a taskmaster. I worked virtually full-time for him since I was about eight or ten years old. He said it would pay off. It was tough to believe that when my buddies were all playing baseball and football.

Then I got into trouble getting out of high school. Got sentenced to a 90-day term in a very, very difficult place. I went to the judge and told him it was the best wake-up call I ever had, and he agreed to release me early if I would go to college.

After that, I knew I couldn’t mess around.

Horatio Alger was a failing writer who revived his career by writing about people who went through adversity, and then became successful and did something more for mankind. Presidents, entrepreneurs, athletes, and other public figures have been recognized with the award. It’s the biggest honor that I could ever imagine in my life.

My motto is “aspire to inspire before you expire.” I want others to look at me and think, “If this kid who barely got out of high school can do it, I can do it, too.”

A rising tide raises all ships—my philanthropy creates philanthropy in others.

I’m having a lot of fun with it, and it’s come back to me in spades. It truly has. I’ve given somewhere over $1.4 billion so far, and my net worth is still more than that— more than when I started giving money away. My businesses are going strong.

I’ve got about 2,500 employees, and am still very active in the business. No plans to retire. No way, Jose. Not even slowing down. My biggest bets are still ahead. P

Taryn Wolf

Last week I gave a speech to a group of nurses, and the president of the association came up to me and said, “I love Goodwill. Everything I have on right now is from Goodwill. But mostly I love the mission that revolves around employment.” She got the whole equation, so I didn’t need to say anything!

We do our own training and employment. There are also 75 Goodwills in partnerships with 144 community colleges to help individuals get specialized work credentials. People have children and daycare challenges and financial management needs that create barriers to working, and we help with those too.

Our 3,100 stores give us an inspirational brand. We were the only nonprofit to keep company with for-profits like Apple and Disney in a recent Forbes report.

And our social enterprise is not only a business—it is a mission-delivery vehicle.

We’re able to create direct work opportunities for people who would otherwise be jobless and socially isolated.

Together, we now provide job assistance to almost two million people annually in traditional face-to-face services, and tens of millions of people through v­ irtual-learning platforms. We’re placing over 312,000 people a year into employment. And we rely on our self-­ sustaining enterprise to fund all of this.

Philanthropy: Who are the people that Goodwill serves?

Gibbons: We directly employ nearly 30,000 people with disabilities, and serve many more through job training programs. We do a lot of work with ex-offenders. Many Goodwills across the country go into prisons before release to start the adjustment process, to help people get prepared and make sure they can land on their feet and become contributing members to society.

We have projects for seniors, and for young people who are entering the workforce.

We work with veterans who have challenges.

We even run some charter schools.

Philanthropy: What are some of the big barriers to employment you deal with?

Gibbons: A lot of our work is focused on how to navigate through life. It’s ­teaching individuals the soft skills that are so important to success. These are people who often never had high expectations placed on them. We help them learn what everyday workplace standards are—everything from how to get along in teams to “Hey, man, show up on time!”

We tell people how to overcome transportation issues. Many Goodwills do a lot of financial education. A guy who spent time in prison may have a child, and if he can’t manage his financials and misses his child support, he goes back to jail. A lot of wasted investment if you don’t put that whole package together.

When you look at someone as an entire person, not just a job applicant, you solve different problems. As a social enterprise, that’s what we try to do. And of course we also help hard-to-employ people learn technical skills that employers value, like computer skills.

Philanthropy: When you talk about the power of work, what do you mean?

Gibbons: Work is part of every person’s identity. It’s how we gain not only economic independence, but personal independence.

It’s really the core of a healthy community and a successful society.

When a Methodist minister founded Goodwill in 1902, he had this idea to collect used goods and give them to the poor, mostly immigrants in the Boston area. But when he put all these used goods together in a room, many of them in poor condition, it created an undignified environment. He realized there’s another way to do this. He started hiring immigrants to repair and sell products, and the first Goodwill store was born. He went from town to town, from Methodist church to Methodist church to build it, and now it’s a group of 164 regional Goodwill entities across the United States and Canada. Each is an autonomous organization with its own board of directors Philanthropy: Why is this mission important to you personally? drawn from that community.

SUMMER 2016

Gibbons: When I was in college, I struggled to get jobs. I began to lose my vision in third grade, and by the age of 19 or 20 I was completely blind. I always got pretty strong grades, and I earned an engineering degree because my dad and my brothers were engineers and I was good with math and science. Yet after my freshman year I couldn’t find a summer job.

A fter my sophomore year, I got a job as a janitor, and that experience had an impact on me. I learned that every job matters. People counted on me to do my job well so that they could do their job well, and that was big. It was very important for me to prove that I could show up and contribute.

After my junior year, I still couldn’t find an engineering-related job. I was creative and got a job where I didn’t get paid, which is more popular nowadays, but in my day it was unusual. I got some experience and some academic credits.

So then I’m a senior and I’ve got a couple of work experiences, and I’ve got decent grades. The HR people on campus seem to like me, and I interview with 50 companies—and I get 50 rejection letters. I finally got opportunities with AT&T and IBM, so when I graduated, I had a job, but it was frustrating.

As I grew, I realized this experience was significant in my life. Rejection is painful and scary but it’s important. I love the concept of resilience. Resilient people have a sense of purpose, a sense of connecting and relationships, and believe they have some control over their lives. When I received rejection letter number 49 I felt no sense of certainty or control. That’s why it was so important for me to push through and connect back to the power of work; pressing forward gave me back control.

I’ve been very fortunate to have steady work since. Seven out of ten people with disabilities in this country aren’t working today.

When I got approached by National Industries for the Blind I didn’t know the word social enterprise. I thought when I got old maybe I’d get on the board of 15

interviews an organization for the blind, but then I learned this was a business business. I thought, “Wow, I can use business skills to have a direct impact on the lives of people who are blind?” I served there for ten years.

I love business. I think business is the driver for employment, period.

Philanthropy: How do you teach someone resilience?

Gibbons: I encourage people to reach back to that toughest time in their life, and remember how they got through it. That knowledge is what will reinforce them for the next tough time. If you get through a tough time and you bury it and act like it didn’t happen, I think you’ve lost something. But if you recognize what allowed you to power through, that builds grit.

I think Goodwill is a pretty gritty organization. We always say we’re a workhorse, not a show horse organization. We are a rubber-meets-the-road kind of place.

Philanthropy: Why is it a focus at ­Goodwill right now to elevate the skills of already employed workers?

Gibbons: There are predictions that in 20 years, half of the jobs we do today won’t be there. There will be fewer traditional, entry-level opportunities, which means our workforce has to upskill and earn the capacities and credentials necessary for mid-market jobs. More critical thinking and becoming a continual learner will be important.

Philanthropy: You’ve been working with the Lumina Foundation on this.

Gibbons: Goodwills were already s­ tarting to work with community colleges on this.

It’s a hard leadership job, but I hear from top-down leaders all the time who Now we have an initiative with more struc- are trying to figure out to initiate more tured models for partnership. Lumina is cross-organizational leadership of the sort helping us turn vocational credentialing that exists in the Goodwill network. into real-world employment.

Philanthropy: Can you tell me about the Philanthropy: And you’ve been working Goodwill job creation fund?

Gibbons: In partnership with the Kresge, with Walmart?

Gibbons: We’re fortunate to work with a Casey, and Ford foundations, we launched lot of organizations and funders who want a $10 million fund that loans out money to take advantage of the Goodwill net- so branches can build new stores, donation work. It’s a sandbox to pilot, expand, and centers, or warehouses. We’ve so far loaned money to enhance 39 separate facilities sustain new strategies.

With Walmart we’ve done a vari- resulting in over 550 new jobs and more ety of things. One is working with floor wages for existing employees.

The loans are at a very competitive employees to move them up to manager jobs. We have about 500 people in this rate, and there has not been even one late program. In retail, people tend to move payment. It’s social-impact investing that around a lot. This program explores ways has had wonderful results.

We’re in the baby-steps stage right of investing in your current workforce to now and are reaching out to new funders. keep good employees.

At the same time, we’re an organiza- This is a good opportunity for philanthrotion where if somebody who works for us pists with donor-advised funds who want is able to get a bigger job somewhere else, to have immediate impact, with follow-on we’re ringing the bell. We like that. That’s opportunities in the future because the loan will be repaid and can be regranted to success for us. some new cause.

We started real narrow, where we had Philanthropy: I notice this headquarters is called the “Member Services Center.” the greatest confidence we could satisfy What does that say about your organiza- impact investors. As we go forward, we could expand the loans to new social entretional structure?

Gibbons: It’s a philosophy. We’re a mem- preneurial programs, which Goodwills are bership organization with a common launching all the time. Different ways of brand. Each member has to subscribe to investing could be offered, depending on a common mission and a set of mem- the impact investor’s expectations of social bership standards. Outside of that, they and economic return. are autonomous, and their boards of directors are their governing body, not Philanthropy: W hat qualities do ­Goodwill managers need to succeed?

Goodwill headquarters.

That structure allows each member Gibbons: Our leaders have to be able to to morph to its community needs. We are lead with both their head and their hearts. not top-down. My job is to work with the They have to have the discipline to succeed leaders throughout the network to expand in a very competitive marketplace. More their best ideas, and harness our collective than $5 billion of earned revenue across energy for maximum impact. My job is not 164 Goodwills, most of it from retail, is to dictate and direct. a pretty important thing to worry about.

Our primary competition is for-profit, and we’re going to have a higher cost structure because we’re bringing in a workforce with barriers to employment, and adding various mission activities that raise our cost structure. So our leaders have to be talented and focused on making that social enterprise work. P

Each Goodwill chapter subscribes to a common mission and set of membership standards. Outside of that, they are autonomous, and their boards of directors are their governing body.

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PHILANTHROPY

charleS Murray

andrew robertS

Jonathan SackS

Gary SiniSe

>> Social Scientist and Author >> W. H. Brady Scholar in Culture and Freedom at the American Enterprise Institute >> Recipient, the Irving Kristol Award >> Recipient, the Edmund Burke Award

>> Historian and Author >> Lecturer at Universities and Military Institutes Around the World >> Fellow, the Royal Society of Literature >> Trustee, the Margaret Thatcher Archive Trust

>> International Religious Leader, Philosopher and Author >> Knighted by Her Majesty Queen Elizabeth II >> Recipient, the Templeton Prize >> Emeritus Chief Rabbi of the United Hebrew Congregations of the Commonwealth

>> Actor and Humanitarian >> Advocate for First Responders and Veterans >> Founder, the Gary Sinise Foundation >> Recipient of many awards, including the Sylvanus Thayer Award from West Point Photo credit Blake Little

THE LYNDE AND HARRY BRADLEY FOUNDATION PRESENTED THE AWARDS AT A CEREMONY ON JUNE 15 AT THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS. Founded in 1985, The Lynde and Harry Bradley Foundation is devoted to strengthening American democratic capitalism and the institutions, principles and values that sustain and nurture it. Its programs support limited, competent government; a dynamic marketplace for economic, intellectual and cultural activity; and a vigorous defense, at home and abroad, of American ideas and institutions. Recognizing that responsible selfgovernment depends on enlightened citizens and informed public opinion, the Foundation supports scholarly studies and academic achievement.

THE OF

e c n e i S c t h ropy Philan

By Karl Zinsmeister

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H

arald Hess and Eric Betzig are both brilliant physicists. Both hate running in a bureaucratic herd. And both have a deep aversion to the administrative paper-shuffling of conventional modern science—especially the timid, risk-averse public mechanisms for doling out funding. “ I got to the point where I said ‘I’m really sick of the whole structure of academic science,’” states Betzig.

PHILANTHROPY

Illustrations: Vladimir Stankovic

Why private funding is so important to the experimenting that makes us smarter, healthier, and richer

Illustrations: Vladimir Stankovic

And so he left. He became a househusband for a while, then went to work at his dad’s machine-tool company in Michigan, manufacturing and selling parts for the auto industry. Hess relates that “around that same time I also quit my job,” for many of the same reasons, “to move to a small startup business.”

Eventually, Hess’s enterprise was bought out, and Betzig “realized that I’m a really bad salesman.” So both men took another jump, into pure intellectual freedom—and unemployment. “We visited parks, talked and talked and explored, and asked ourselves where the untrodden paths in science are,” says Hess. “We finally came up with a new concept for a super-high-resolution microscope that could look deep into cells at the molecular level.”

The stumbling block was funding. Who would pay for this microscope? “Do we go for government grant money?” they wondered. The thought “created nausea for both of us,” says Hess. Too much paperwork to write proposals. Too much explaining and self-justifying in defense of a dramatically new approach. Too much arguing with reviewers, and waiting for slow responses.

“So we decided to each put up about $25,000 of our own money and build it without a grant,” Hess recalls. “We set up a lab in my little condo and were able to work at lightning speed. We bought the necessary parts ourselves, and within a couple months we had the thing together.” (See a photo of their contraption, the Photoactivated Localization Microscope, sitting somewhat comically amid the antique furniture, fireplace, and beige carpeting of Hess’s San Diego living room, on page 20.)

This device established Eric Betzig and Harald Hess as leaders at a scientific frontier. It won them each directorship of a lab at Janelia Research Campus, the innovative facility created by the Howard Hughes Medical Institute, one of today’s most effective medical philanthropies. And in 2014 it transported Eric Betzig all the way to the Nobel Prize in chemistry. Not bad for a product of checkbook science.

The timidity of government science funding The National Institutes of Health may do more to improve human life in the long run than any other corner of government. NIH is the world’s largest source of funding for medical research. Hundreds of thousands of investigators, and winners of 87 Nobel Prizes, have received its grants. “The NIH’s $30 billion annual investment is an indispensable driver of medical progress,” is how the Broad Institute’s Eric Lander and Louis Gerstner put it in 2014.

But there are downsides to being a huge public institution. “When today’s researchers are asked what they do for a living, some joke that their full-time job is grantwriting and their part-time job is research,” reports Anthony Atala, a world leader in the exciting field of regenerative medicine. “Even scientists with good ideas and a history of progress must now spend many, many hours applying for grants. Researchers have to apply for an average of six NIH grants to be awarded a single one.”

What’s worse than the red tape is the crippling timidity of the granting agencies. “When you apply for federal grants at a place like the National Institutes of Health the game is that you propose to do what you’ve just done. Everybody knows that, though they won’t say it,” states Rick Horwitz, one of the nation’s leading biological researchers, and the director of an important new lab just set up by philanthropist Paul Allen. (More on that later.)

Another eminent biologist, Leroy Hood, echoes Horwitz. “At the National Institutes of Health, if you haven’t completed two thirds of your research, you’re probably not going to get a grant, because everything is so competitive and so cautious.” Top New York University researcher Charles Marmar says the same thing: “Government research is powerfully conservative. I’ve been an NIH researcher for decades, and to get an NIH grant today you essentially have to already have solved the problem in question.”

W hen Internet entrepreneur Sean Parker announced in April that he was putting $250 million into an unconventional effort to apply the insights of Karl Zinsmeister created The Almanac of American Philanthropy, which offers many other rich examples of science philanthropy.

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A super-high-resolution microscope that led to a Nobel Prize was built by Eric Betzig and Harald Hess in the living room of Hess’s condo, using $50,000 of parts they purchased with their own money to avoid the “nauseating” process of winning public funding.

“As a mentor for young, promising scientists with brilliant ideas, it is discouraging to see them struggling,” says Atala, who oversees hundreds of talented researchers at the Wake Forest Institute for Regenerative Medicine. “Of course there must be a vetting process for federal funds, but I think the current climate may discourage bright minds from entering—or staying in—research careers. It is increasingly common for doctoral and postdoctoral students, those with some of the most innovative and

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promising ideas, to leave research because they can’t get funded. Philanthropy dollars are therefore more important than ever. They allow us to overcome some of these challenges.”

Betzig warns young scientists of the terrible conformity and sluggishness at the heart of the government agencies that dominate science funding.

“It’s a mistake too many people make to take the safe route from a funding perspective. That’s why they go into fields that are already fairly mature. The thing to do is to strike your own path. But you have to have the courage of your convictions and not be upset when you don’t get a grant.”

That is often easier said than done. Many of our most inventive scientists have run head-on into this serious obstacle. Often they find that the most practical way to jump the hurdle is to use philanthropy.

Making the genetics revolution possible Leroy Hood was a professor at Caltech, and foresaw a genetics revolution that could completely transform medicine. He recognized, though, that automation of the decoding of genomes would be a necessary prerequisite. At the time, genes were “sequenced” by hand, by graduate students working with dangerous chemicals. It was painfully slow and expensive. Hood had an idea for a machine that would take over this labor-intensive process, and applied for NIH grants.

His bold new idea “got some of the worst scores the NIH had ever given,” Hood reports. “People said it was impossible. Or they said, ‘Why do this? Grad students can do it more easily.’”

S o Hood tried something dramatically unconventional for an academic scientist. He approached the entrepreneurial wiz who had originated the warehouse superstore concept behind Costco and Sam’s Club. Sol Price was a tough, hustling son of immigrants who made a fortune peddling tires, books, peanuts, and TVs from cavernous buildings in unfashionable neighborhoods. He later became known as a very savvy philanthropist.

“When the NIH funding didn’t work out for the automated sequencer, I went to Sol,” says Hood, who describes Price as “really smart and flexible, and excited by innovation and new ideas…. He was a hard-nosed,

PHILANTHROPY

Harald Hess

immunotherapy to battling cancer, he decried the slow “incrementalism” that has “taken hold of ” academic science in many places. This, he noted, is a symptom of the tendency of government agencies to fund only sure things. Most government research grants “aren’t really that interesting” because they are channeled to “the things that are already so obvious, experiments where the outcome is already so predictable.”

This fundamental timidity of government science funding, Horwitz points out, “creates terrible dilemmas for people experimenting at unproven boundaries, or young scientists. In theory a university will be willing to carry for a couple years a promising researcher who is trying something never done before. But universities are increasingly becoming as risk-averse as government funding agencies. So you end up with cases like Betzig and Hess, who had to put up their own money and deal with joblessness to make a breakthrough.”

DNA arrays that allowed tens of thousands of genes to be read at once. This instrument was soon commercialized and made available to other scientists, transforming genomics.

Hood then recognized that this huge flood of new data was going to require an entirely new kind of biology research, one that would cross disciplinary boundaries and look at health, disease, growth, and other processes in fresh ways. To encourage this, he proposed a new Institute for Systems Biology. It would rely on mathematical models, and focus on changes over time, not just frozen snapshots.

Once again, rustling up government grants (or commercial support) proved impossible in this new field. So the institute was established in 2000 as a nonprofit research organization supported by philanthropic funds. Individual donors like Bay Area financier Bill Bowes (whose foundation contributed $6 million) collectively put up $30 million to get

critical guy who asked tough questions. But when he was done, he was satisfied, and he more or less gave me a blank check to spend as I felt was needed. And that was enormously valuable.”

Hood received $200,000 a year from Price for a few years, and by 1986 the Caltech professor had his machine up and running. It was soon capable of sequencing 150 million DNA base pairs without the touch of a human hand. Without this breakthrough, the historic mapping of the human genome would not have been feasible.

Several years ago the Battelle Foundation estimated that automated DNA sequencing and the decoding of the human genome had created in excess of $800 billion of economic value. It was philanthropy that opened the door to this, when neither government grants nor private investment funds were forthcoming. Those gifts will produce outsized human and financial benefits for generations to come.

When you

Harald Hess

apply for federal grants at a place like the National Institutes of Health, the game is that you propose to do what you’ve just done. Everybody knows that.

Incubating systems biology That was only the first time in Hood’s illustrious career that he relied on voluntary donors when public funders lacked the vision to keep up with his pathbreaking ideas. A few years after his DNA-sequencing triumph, Hood was perched at the University of Washington medical school and was yet again hatching some nontraditional plans, this time for a new department focused on molecular biotechnology. Once more he found it impossible to garner funding for his unproven concepts. So he approached another nearby business scion: Bill Gates.

This was in 1992. At that point Gates was, in his own words, “in my acquisition phase…not in my philanthropic phase.” But his eye for talent and powerful ideas kicked in, and after hearing Hood’s pitch, Gates decided (somewhat to his own surprise) to put up $12 million out of his own pocket to make the new venture possible.

Hood’s donor-funded group soon became ground zero for blooming innovations in molecular biotechnology. Among other work, the team at Washington invented an inkjet device for creating

the ISB launched. Philanthropic support has since exceeded $83 million.

By 2015, the Institute for Systems Biology had produced more than 1,300 research publications, and scored very high in international rankings of scientific impact. It had spun off 19 separate for-profit companies. Having proven the economic value of its insights, it was able to attract rich venture-capital investments. Systems-biology centers have now sprouted in places like Princeton, Rockefeller University, Cold Spring Harbor Laboratory, and many other locations. (Most of these were also incubated with philanthropic donations.)

“That’s the kind of thing that brave front-end investment by donors can lead to,” comments Hood.

Challenging conventional thought Stanley Prusiner is another Nobel winner who learned that private giving can be the difference between productive scientific breakthroughs and harsh rejection. In the mid-1970s he was at the University of

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California, San Francisco studying scrapie, a degenerative brain disorder related to “mad-cow” disease. He was coming up with puzzling findings, and having a hard time getting the National Institutes of Health to support his research. He and other experts assumed that the cause of scrapie must be a small virus, so when his data suggested it was some kind of infectious protein, a hitherto unknown threat, everything about his investigation seemed to be going wrong. He was informed by UCSF that he would not be given tenure, and his research funding was not renewed.

At that point, writes Prusiner in his Nobel biography, “I was extremely fortunate to receive much larger funding from the R. J. Reynolds Company” through a philanthropic program administered by former Rockefeller University president Fred Seitz, a legendary philanthropic entrepreneur, followed by money from the Sherman Fairchild Foundation. “These private sources were crucial in providing funds for the infrastructure” of his next stage of research—which required thousands of mice and hamsters. With private money supplying the animal models he needed, Prusiner dove back into his work. “ I grew more confident that my findings were not artifacts and decided to summarize that work in an article”—in which he minted the new term “prion” to describe the previously unknown protein that wreaked havoc in brains. The scientific establishment unloaded on Prusiner. His highly contrary study “set off a firestorm. Virologists were generally incredulous and some investigators…were irate.”

Prusiner had constructed a new paradigm that lay outside accepted scientific explanations, and “the media provided the naysayers with a means to vent their frustration” at him. “The personal attacks,” he says, “became very vicious.” Ultimately, though, his identification of “prions” as the source of this scary disease held up. Stanley Prusiner was awarded the Nobel Prize in medicine in 1997—having been bridged from ignominy to triumph by risk-taking philanthropy.

The medical establishment was similarly dismissive when immigrant physician George Papanicolaou suggested in 1928 that microscopic examinations of vaginal smears could detect the presence of cancer. “I

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found myself totally deprived of funds for continuation of my research,” he later wrote. “When every hope had almost vanished, the Commonwealth Fund…stepped in.”

The Harkness family’s foundation offered what it knew was a “highly speculative” grant that allowed Papanicolaou to prove his theory. The Commonwealth Fund itself then published his findings in a groundbreaking study. The “Pap” smear, named for its originator, continues to be the most effective and affordable way to detect cervical cancer, heading off thousands of deaths every year.

Papanicolaou’s discovery was just one in a long chain of cancer treatments and preventions made possible by philanthropy. Take creation of the Sloan Kettering Institute in 1945. Charles Kettering was a famous inventor, best known for his automotive patents, but also maker of an incubator for premature infants, of magnetic devices for diagnosing bodily ills, and of treatments for venereal disease. He was a visionary philanthropist as well, and along with fellow General Motors executive Alfred Sloan put up the money and ideas for the first private biomedical research center focused on cancer. Today, Memorial Sloan Kettering Cancer Center treats more than 400 different subtypes of cancer with leading therapies, advances the state of the art in 120 research labs, and graduates its own Ph.D.s in cancer biology. It was bolstered in 2014 by a $100 million donation from Henry and Marie-Josée Kravis to create a new center for molecular oncology.

Twentieth-century magnate Daniel Ludwig, having built a shipping fleet from nothing, bequeathed almost his entire fortune to fighting cancer—$2.5 billion in gifts distributed to research organizations.

Johns Hopkins investigators Bert Vogelstein and Kenneth Kinzler, who have more citations in scientific papers over a decade than any other researchers in the world, are among the beneficiaries of Ludwig’s unusually open-ended grants.

“Our focus is not decided by committee,” states Kinzler when asked why his lab outperforms much larger counterparts in uncovering scientific breakthroughs.

“We try to develop research projects that are not in the mainstream…. Our Ludwig funding allows us to do what’s important. We do the most groundbreaking research without having to worry about where the next level of funding would come from.”

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Kinzler notes that “compared with treatment research, early detection and prevention research is underfunded, but it can potentially make more of an impact on reducing cancer deaths. It takes a long time and a sustained effort to see the results of cancer prevention and early detection studies. Ludwig funding will enable us to carry this and many other research projects forward.”

“The Ludwig bequests have revolutionized what we’ve been able to do,” agrees Vogelstein. “We’ve pursued some of the most important questions in cancer. Not necessarily the most fundable ones.”

Dramatically change research directions in response to unexpected experimental results? You’d be stupid not to! Yet almost none of those things can be done with government funding.

The rules that allowed the Markey grants to fuel so much innovation by recipients were explicit: Favor young investigators with promise and nurture them through the “valley of death” that extends from the end of their training until their reputations are established. Trust outstanding researchers with wide discretionary powers in using their funds. Support fields with the biggest upside. Fund areas that are important but not popular.

Allow not just basic science but also “translational” research that turns new discoveries into usable treatments and technologies. Pay for the infrastructure necessary for great research, not just the research itself. Be patient.

Private risks bring public rewards New scientific information is perhaps the surest and deepest root of economic growth and prosperity in modern society. But true breakthroughs in science are inherently chancy, and require funding systems that are risk-tolerant.

The federal science bureaucracies are hugely biased toward scientists who have The average age at which researchers already made their mark—the average receive their first federal grant is 43, and only age at which researchers receive their first federal grant is 43, and only 1 percent of NIH grants go to researchers 35 1 percent of NIH grants go to or younger! Yet most science breakthroughs researchers 35 or younger! Yet most science breakthroughs originate from originate from young inquirers. precisely those young inquirers, who haven’t yet fallen into conventional ways of approaching topics.

The Markey Scholar Awards offered funding Private funders are vastly more likely to support for five to seven years to each recipient, plus money young investigators. An excellent illustration is the to establish his or her own lab. The 113 Markey trust set up by Lucille Markey to support biomedical awardees turned out to be extraordinarily successful careers. It operated only from the mid-1980s to 1997, and productive. Eric Lander is an example. During his when it shut its doors for good after distributing fellowship he refined new concepts of gene mapping in more than $500 million. the lab Markey supported, and today he heads one of the The Markey funding was tremendously flexible. world’s leading genome and medical-research centers, Preliminary investigations and risky science of the the Broad Institute of MIT and Harvard (created with a sort that give NIH or NSF funders lockjaw? No $700 million gift from Edythe and Eli Broad). problem. Spend money recruiting new scientists Another supporter of risky projects and investigators or graduate students whose exact roles will be is the Howard Hughes Medical Institute, endowed by the determined in the future? Can do. Build or equip eccentric billionaire. It was founded primarily to conduct its a lab before the exact experiments that will unfold own research, instead of handing money to facilities with there have been plotted? Sure. Shift money from their own agendas. It focuses on scientific fundamentals: one year to another, or one project to another, to fuel cell biology, genetics, immunology, neuroscience, and the most promising avenues as they open up? Yup. structural biology. A 1985 sale of gifted stock made it the wealthiest medical philanthropy in the world.

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About 325 Hughes Investigators operate at more than 60 universities, hospitals, or labs across the country in an unusual organizational structure. Their dispersal allows them to benefit from cross-fertilization of ideas, yet they are employed by the institute rather than their host, and benefit from its independence and patience. HHMI also runs a large program to fund promising scientists at early stages of their career, as well as a program to support outstanding scientists working outside the U.S. (who do not qualify for federal support).

As a companion to these investigators spread far afield, Hughes created a major research campus of its own in northern Virginia, where it has concentrated more than 400 biologists to do high-risk, long-term research in large interdisciplinary teams. This campus is now a happy home for both Eric Betzig and Harald Hess, whose novel approaches and disgust with

Harald Hess agrees. “Eric Betzig and I certainly benefit by having HHMI open its doors to us and provide the research environment that matches our nonconformist style. And science benefits by having such alternative research ecosystems financed by philanthropy.”

The fact that private giving usually comes without onerous strings attached is one of the things that lab directors of all sorts most prize about philanthropy.

“Unrestricted funds are gold; they’re magic,” says the Broad Institute’s Eric Lander. Thanks to private giving, “when we have a good idea we’re able to say ‘Let’s start investing in it now rather than write a grant and start working on it two years from now after it wends its way through the NIH system.’”

Setting the stage for scientific breakthroughs Private donors are also vastly more willing to buy machines, erect

“Philanthropic funds are gold. They’re magic.”

So say the directors of America’s top medical labs. traditional science funding led them to pay out of pocket for the high-resolution microscope described earlier.

A 2009 study by the National Bureau of Economic Research found that the Howard Hughes philanthropic model is remarkably effective. “Investigators of the Howard Hughes Medical Institute, which tolerates early failure, rewards long-term success, and gives its appointees great freedom to experiment…produce high-impact papers at a much higher rate than a control group of similarly accomplished NIH-funded scientists,” the study concluded.

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buildings, and hire technology aides—creating the structures within which discoveries can take place.

Government grants are notoriously unwilling to pay for this sort of foundation-laying. Federal grants generally must be tailored for one discrete experiment and its immediate costs only. That makes it hard for directors to keep their labs operating and continuously improving.

For instance, in the late 1970s, researchers at the California Institute of Technology were ramping up all-new technology-intensive approaches to human biology research. But they needed a vessel in which researchers from the Caltech

PHILANTHROPY

Gifts, h c earto Toe s e Medical RHead from

In 2014, Sean Parker gave Stanford $24 million to research allergies, a poorly understood but growing health problem. As he learned more about immune disorders, he followed up with a $250 million gift in 2016 to see if immunotherapy could be applied to cancer suppression (see page 28).

A public-health campaign created by donor Tom Siebel reduced teen abuse of methamphetamine by 63 percent in Montana (where the drug was linked to half of all prison terms and foster-care cases), inspiring spinoff programs in many other states.

The John Hartford Foundation, created from the A&P grocery fortune, was the leading funder of biomedical research in the 1950s through 1970s. Among its accomplishments were supporting the world’s first successful kidney transplants and making dialysis practical for millions of patients who would otherwise have faced a death sentence.

To date, smallpox is the only infectious disease to have been completely eradicated, but thanks to the collaboration of the Carter Center, Gates Foundation, and untold volunteers, the Guinea worm will soon be next. This painful parasite has no known vaccine or cure, but aggressive preventive and eradication efforts have chopped cases from 3.5 million 30 years ago to just a handful today.

ts, Phil and Penny Knight made a $125 million gift to cardiovascular medicine with a 2012 grant to George Eastman was a pioneer in improving dental

the Oregon Health & Science University. They

care, and widening understanding of how much oral

have given $600 million, and raised $500 million

health affects a person’s overall well-being. Taking up

more, to build up a powerful cancer institute on

his mantle, donors like the Rasmuson and

the same campus, headed by a game-changing

W. K. Kellogg foundations have created programs to

leukemia researcher.

enhance dental care in rural areas by funding mobile treatment and training special practitioners.

Child vaccinations paid for by the Gates Foundation will save the lives of close to 8 million preschoolers around the globe over a couple decades.

The Robert Wood Johnson Foundation

Targeted investments from the Cystic Fibrosis

has allocated $1 billion to the

Foundation recently broke decades of stagnation

reduction of childhood obesity. Success

in treatment of this lung disease, resulting in two

in this effort will forestall many serious

drugs predicted to double the life expectancies

health problems down the road.

of some CF patients. The foundation sold rights to its breakthrough discoveries for $3.3 billion, which is being reinvested into patient care and additional research for therapies.

Eli and Edythe Broad founded a program that now funds 40 percent of the private

The Prostate Cancer Foundation

research on inflammatory bowel

was founded in 1993 by

disease, which afflicts 700,000

Michael Milken as a nimbler

people in the U.S.

alternative to inefficient and risk-averse publicly funded research. Its successes inspired the creation ten years later of FasterCures, which aims to speed progress against many diseases by making research more efficient. “Orphan diseases” too rare to receive significant Uncas Whitaker, James Clark, Charles Feeney, the Meinig family, and other donors gave billions

funding from government or private companies are one focus.

of dollars to first create (against academic and governmental resistance) and then expand the new field of biomedical engineering. Today it is one of the fastest growing and most exciting branches of medical science, and linked to triumphs like widespread joint replacement, laser surgery, labgrown organs, and working bionic limbs.

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biology and chemistry and math faculties could be mixed, along with some very advanced equipment and labs. Fortunately, five foundations, four major individual donors, and two companies offered gifts that allowed Caltech to build and open its new Braun Laboratories in 1982. The building almost immediately became an important center for new kinds of scientific collaboration, jump-starting work in recombinant DNA, monoclonal antibodies, and other early innovations in biotechnology. “We’re talking about investigations of the fundamental structure and mechanisms of life itself,” stated Caltech president Marvin Goldberger at the building’s dedication. One researcher called the Braun gifts “a beautiful example of philanthropy encouraging innovation and creating new opportunities that didn’t exist before.”

Asked why the laboratory was so important, Leroy Hood explains that “federal funding has almost always focused on specific kinds of projects. It isn’t focused on creating the infrastructure of a house

vaccination improvements to systematic suppression of diseases like polio, Guinea worm, enteric disorders, snail fever, river blindness, trachoma, HIV, malaria, tuberculosis, and others.

What is less well known is that donors are making big pushes to upgrade research and training in public health within the U.S. as well. When he announced his unprecedented $350 million gift to the public-health school at Harvard in 2014, investor Gerald Chan made the case: “While medical doctors give health benefits to individual patients, public health is a field that helps to give benefit to the whole population.” Other recent gifts to university public-health departments include $40 million from Michael Milken, $50 million donations from the Rollins family and from the Gillings family, Joseph Mailman’s $33 million investment, and the hundreds of millions of dollars Michael Bloomberg has channeled into this cause at Johns Hopkins University.

Donors often bring entrepreneurial energies into medical research. The AIDS epidemic was just a blurry terror when the Aaron Diamond Foundation into it with a nimbleness, speed, and “Without private philanthropy, we wouldn’t ripped tolerance for risk that allowed it to pioneer be able to take risks or get our research up some key research and treatment findings to scale,” says eminent neuroscientist Steven needed to battle the disease. By the time the foundation closed down at the end of 1996, Hyman, former director of the National it had invested $220 million and become the largest private supporter of AIDS Institute of Mental Health. research in the U.S., from basic research to drug development. Thanks in part to its that really good people can work in. With the Braun breakthroughs, the death rate from HIV in America is now building suddenly we had 200,000 square feet into one fifth of what it was 20 years ago. which we could bring all sorts of new people and Diamond also did important work on prevention. things. And without that enabler we couldn’t have One project, for instance, demonstrated that the rate of made that jump. You don’t get federal grants to build transmission of HIV from mothers to infants could be new buildings and create new visions. It’s philanthropy reduced from over 30 percent to less than that opens up opportunities in such ways.”

1 percent. The organization’s researchers also pursued various HIV vaccination strategies right through the Prioritizing public health stage of clinical trials, including some work using very Another valuable contribution of philanthropy is the innovative techniques that was co-funded by the way it takes interest in neglected disciplines. One Gates Foundation. Though never numbering more than non-glamorous corner of medical science that has about 75 researchers, the Diamond Center’s no-strings never attracted much government funding is public philanthropic money gave it a fast-moving vigor health. The biggest feet in this area for more than a that allowed it to repeatedly precede and outperform decade have belonged to Bill and Melinda Gates. They government labs. Its research saved hundreds of have engineered many massive upgrades in public thousands of lives. health in foreign lands—from hygiene, water, and

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PHILANTHROPY

The list of “orphan” maladies that neither government nor corporate funders were much interested in before donors became involved is long.

A great many tropical diseases, retinitis pigmentosa, Huntington’s disease, malaria, geriatric medicine, and other illnesses that once lay neglected are now being aggressively untangled. “Diseases like schizophrenia, bipolar disorder, and autism have been moved” out of obscurity by philanthropists, reports eminent neuroscientist Steven Hyman, former director of the National Institute of Mental Health. “Without private philanthropy, we wouldn’t be able to take risks or get our research up to scale.”

For instance, Hyman, who is investigating the genetic bases of mental illness, wanted to do work in Africa because of its unusually diverse genetic pool. “But it would take a huge administrative or bureaucratic effort to run federal grants there. We couldn’t think of doing that without private money.”

Trailblazers There is a rich history behind these current efforts.

John Rockefeller and the organizations he set up almost single-handedly created the discipline of “public health,” first by eradicating the hookworm plague that sapped the energy and productivity of millions of American Southerners, and then by creating the International Health Commission in 1913 to carry out similar work abroad. Rockefeller established the first school of public health at Johns Hopkins University in 1916, which he then duplicated at Harvard in 1921. In all, he spent $25 million establishing public-health programs at scores of universities across the globe.

Rockefeller was the trailblazer in all kinds of medical research as we know it today. He first poured money into disease study and treatment in 1901, after the death of one of his grandsons from scarlet fever. At the time, there was scant effort to fight back against common threats to human health like tuberculosis, diphtheria, typhoid, and bacterial infection. Rockefeller created the Rockefeller Institute for Medical Research, which eventually grew into Rockefeller University. It produced landmarks like blood typing, blood banking, vital knowledge of the structure of antibodies, of electrical signaling in the nervous system, on the

operation of optic nerves, and fundamental new understandings of DNA and genetics.

Many lifesaving drugs and therapies emerged from Rockefeller’s walls: penicillin, Simon Flexner’s anti-meningitis serum, Hideyo Noguchi’s treatments for syphilis and yellow fever, Louise Pearce’s drugs to treat African sleeping sickness, methadone to manage heroin addiction, anti-AIDS “cocktail” drugs, and much more. Two dozen individuals associated with the institution have received the Nobel Prize, and 20 have been awarded the National Medal of Science.

When scientists working elsewhere with Rockefeller Foundation funding are included, the tally of Nobel winners who were influenced by Rockefeller support exceeds 60.

The modern template for supporting biomedical research was established by Rockefeller and succeeding donors like the Harkness family (and their Commonwealth Fund), Albert Lasker, John Hartford, and Lucille Markey. It was difficult even to accurately discuss medical maladies until the Commonwealth Fund financed and published the Standard Classif ied Nomenclature of Disease in 1933, creating medicine’s first universal definitions and standards. This both aided clinical practice and made accurate health statistics possible for the first time. Creation of the Albert Lasker Awards for medical research likewise helped set priorities and recognize successes within the field. Since first being presented in 1945, the Lasker prizes have anointed 87 American scientists who subsequently went on to win a Nobel.

New ways of attacking complex problems Major breakthroughs funded by philanthropy are not a musty thing of the past. Donors today are continuing to create new fields and approaches to research. “What we are doing would be absolutely impossible to fund except via philanthropy,” Rick Horwitz tells me in describing the new Allen Institute for Cell Science that he runs.

“It’s too large, too novel, too complex, too collaborative, too speculative. It’s not conventional prove-the-hypothesis science. It’s not traditional heroic-lone-researcher work. What we’re pursuing requires the long-term, cooperative work of a large team. The conventional funding mechanisms just don’t match up to what we’re doing.”

Fortunately Horwitz has a philanthropic sponsor who is not only willing but anxious to help;

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indeed, this institute was the donor’s idea. Microsoft co-founder and major philanthropist Paul Allen personally recruited Horwitz and created the new lab with an initial $100 million gift in 2014. The goal is to better understand how living cells change and interact with each other.

Relying on current genetic, molecular, and chemical information about cells to understand how they develop, and anticipate what they will do, is like trying to appreciate a car by looking at a list of parts, explains Horwitz, or trying to understand San Francisco by reading the phone book. What the Allen Institute aims to do is to create a kind of “Google Maps” of cells.

“Nobody studies how these entities function as complex systems, and how they interact to determine cellular behaviors. Instead, people focus on just a small, manageable part,” he says. This is mostly because of the way academic labs are structured (to support deep dives on narrow slices of a problem) and the way government research money is distributed (to tightly defined projects, not for exhaustive, boundary-breaking macro-examinations).

To get a clearer picture of the ways cells transform themselves, signal each other, migrate, and take various kinds of “action,” one must watch the whole sprawling “movie” of what the cell does over time. That essentially is what Paul Allen has asked Rick Horwitz to do.

The cell-science institute’s 70 researchers will work as one interdisciplinary team. They will use induced pluripotent stem cells—a new technology that allows a common skin cell, for instance, to be converted into a stem cell. This stem cell is capable of growing into other specialized cells, such as blood or bone. By taking long, complete sequences of images of those stem cells transforming themselves into something more complex, the Allen Institute scientists believe they will gather tremendous amounts of big-picture information about the workings of life. The institute will advance biology by releasing to all interested researchers both the original “movies” and any analysis the Allen investigators put together.

Another sector where new approaches and new funding are needed is regenerative medicine—where things like replacement organs and new skin are being grown in labs for transplanting into desperately ill patients. The problem for regenerative medicine is that

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it is breaking all new ground. Anthony Atala notes that “practically everything we do is beyond the commonly accepted limits of science. We are a whole new field.

The long established regulatory guidelines do not fit.”

“We need funds that will allow us to explore new territory. We need funds that will allow us to take one disease issue all the way from bench to patient,” argues Atala. Fortunately, “some of our most promising translational research with the most potential to treat patients is beginning to be funded by private donors.

It is thanks to them that we have treatments now showing promise in the clinical-trial phase.”

Sean Parker is one donor who understands that the most important thing a philanthropist brings to the table is often openness to new approaches and a willingness to fund pioneering efforts. When he donated $250 million from his Facebook proceeds to found his unusual cancer institute this April, he explained his reasons for backing cancer immunology (use of the body’s own immune system to fight tumors). Until very recently, states Parker, immunology was “the red-headed stepchild of the oncology world.

There was a dedicated band of scientists who were convinced that the immune system played an important role in cancer, but they were essentially refugees from the cancer establishment.”

So Parker took two new approaches. First, he put up a lot of money to allow more thorough experimentation with cancer immunotherapy. And, second, he launched this through an unconventional structure that will push six top cancer centers that don’t always share information smoothly to collaborate much more in order to speed progress. Memorial Sloan Kettering, Stanford, UCLA, UCSF, M. D. Anderson, and the University of Pennsylvania will be required to share resources and pool findings.

Philanthropy, Parker notes in explaining his effort to eliminate intellectual barriers, is not “giving away money so much as trying to solve a set of not-easilyaddressable problems.” He told the Financial Times recently that if you “form a scientific advisory board composed of the luminaries in the field—who are all at that point the establishment—and then you let those people determine how your resources are going to be allocated, you’re going to end up doing essentially more of the same thing that everyone else is doing.” Smart philanthropy often looks instead for roads not taken

PHILANTHROPY

and new tacks by fresh thinkers. There are topics and approaches, summarizes Parker, that are “either too far ahead, or they’re unpopular for some reason, or the establishment isn’t yet interested, where private philanthropists can step in and have a huge impact.”

tools of neurobiology. It created interactive online atlases of the mouse brain and the human brain, for instance, that have become staple instruments for experimenters worldwide. The productivity of the Allen Institute isn’t just a function of being freed from the need to repeatedly apply for government grants.

Its 350 staff are organized in flexible teams—more like an Internet firm or a corporate lab—and this has yielded rapid progress.

The philanthropic brain-science blitz now underway also involves thousands of everyday givers.

One pioneering effort was the Brain & Behavior Research Foundation, launched in 1981 by a group of family and friends of persons afflicted by mental illness. In 1987 the group began to pool donations to provide grants and prizes to promising young researchers having a hard time qualifying for government support. It also sponsored more senior

A current donor focus: brain research Brain research is an area where philanthropists have powered many important gains in recent years.

The latest boost came in May, when Sanford Weill announced a $185 million gift to create a new center for neuroscience at the University of California, San Francisco. “We’ve always liked to support the underdog,” he explained, and “research on the brain is far behind other areas of medicine.” The donation will pay for work extending from “research bench to bedside,” said Weill. UCSF chancellor Sam Hawgood underlined this, saying the gift “will remove the completely artificial boundaries that we in academia use.”

Donor-funded scientists “produce high-impact Other donors like papers at a much higher rate than a control group Ted Stanley, Paul Allen, Peter O’Donnell, Patrick of similarly accomplished NIH-funded scientists,” McGovern, Fred Kavli, reported the National Bureau of Economic Research, Mortimer Zuckerman, and many small-to-moderate because philanthropy “tolerates early failure, rewards givers have poured billions long-term success, and gives its appointees great of dollars into brain science of late. After concluding freedom to experiment.” that government health agencies were massively underresearching maladies like schizophrenia and scientists pursuing novel approaches unlikely to bipolar disorder, Stanley became a leader. He started receive conventional funding. The group gathers and putting what eventually totaled more than a billion distributes more than $30 million in a typical year, dollars into the field, funding between a quarter and a and has now awarded $346 million to 4,000 scientists half of all the research on those illnesses. His investment to increase understanding of brain functioning and paid off in January of this year when scientists improve treatments. announced that the Stanley Institute may have narrowed Brain injuries suffered by veterans of the Iraq and the single greatest genetic risk factor for schizophrenia Afghanistan wars are another aspect of neuroscience that to a single aberrant gene variation—a finding they has recently drawn strong philanthropic interest. Large described as “amazingly consequential.” (See “Big Payoff portions of a $243 million donation to servicemembers on Brain Philanthropy” in the Briefly Noted section of by hedge-fund founder David Gelbaum were used to Philanthropy’s Spring 2016 issue.) create centers for researching and treating brain injuries Paul Allen’s Institute for Brain Science is another and traumatic stress. Home Depot co-creator deeply influential donor creation. The Seattle Bernie Marcus has given more than $100 million to nonprofit has been launched with $500 million of build up centers for treatment of brain injuries, for gifts from Allen, and a mandate to improve the general studies in neuroscience, and for trailblazing explorations of autism. This April, financier

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ades— H s tolanthropy n e i v From Hea ce Ph More Scien Steven Cohen and his wife, Alexandra, pledged $275 million to mental-health clinics for vets. They had earlier donated $17 million to a five-year program at New York University to detect biomarkers (like distinctive brain images, blood chemistry, or hormone levels) linked to traumatic stress disorders. NYU psychiatrist Charles Marmar says his lab hopes to find concrete “physical standards” that can take some of the subjectivity out of mental-health treatment. Because of the speculative nature of his lab’s work, says Marmar, philanthropy was essential to getting it launched. “Donors,” he notes, “tend to have business acumen and know how to get things done.”

The invaluable catalyst Even with the billions of dollars gushing out of federal science funders, philanthropy remains crucial to scientific progress. MIT professor Fiona Murray recently studied the 50 universities that top the list for science-research spending in the U.S. and found that private donors now provide about 30 percent of the total research funding at these places. The sheer volume of private dollars is consequential.

What’s even more important about science philanthropy, though, is the way it is structured: adaptable, tolerant of risk, patient, willing to fund the infrastructure that scientific discoveries require, open to unproven innovators.

“What I’ve always loved about philanthropy is it’s money that has a potential to be flexible. It’s money that can catalyze new ideas. It’s money that lets you push the frontiers, follow the leading edge,” states Leroy Hood. “So a philanthropist who is willing to say ‘Yes, I’ll step in and help you find something new’ is a jewel.” P

A mile underground, some of today’s greatest experiments in particle physics are underway thanks to private money. Pioneering research on dark matter (which makes up perhaps a quarter of the universe, though we know almost nothing about it) is being carried out deep in an abandoned gold mine in South Dakota. A major investigation comparing matter and anti-matter is taking place in an adjoining chamber. And an important test of the properties of neutrinos will unfold there soon. All of these were made possible when donor Denny Sanford gave $70 million to transform the former mine into an underground research facility. (For more on Sanford, see page 11.)

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The great telescopes with which scientists peer into the depths of the universe have all been filled with light by philanthropy. The Lick, Yerkes, Mount Wilson, Palomar, and Keck observatories were products of some of the largest and most important science gifts in history. That tradition continues. Several years ago, Intel founder Gordon Moore donated $250 million (matched by nearly another billion from other donors) to design and launch the Thirty-Meter Telescope, which will have nine times the light-collecting power of any existing telescope. The Giant Magellan Telescope being constructed in the southern hemisphere with a similar visual power was likewise catalyzed by gifts from donors like George Mitchell and Richard Caris. A special survey telescope designed to map the entire visible sky every few nights (so images can be compared over time to find places that have changed) was stuck in the conceptual phase until Charles Simonyi and Bill Gates came along with gifts ($20 million and $10 million respectively) that spurred the National Science Foundation and U.S. Department of Energy to join in and allow construction. This May, financier and philanthropist James Simons put up $40 million to create another new At sea level, philanthropy created the field of oceanography.

kind of telescope that will seek out possible gravitational

In 1903, nature-loving donor Ellen Scripps launched

waves remaining from the birth of the universe. When

the Scripps Institution of Oceanography in San Diego,

they begin to operate in the 2020s, these new exemplars

which remains one of the top centers for marine

of science philanthropy will have revolutionary effects on

research. Gifts from the Rockefeller Foundation created

cosmology and physics.

a sister organization on the East Coast: the Woods Hole Oceanographic Institution, opened in Massachusetts in 1930. Bicoastal marine philanthropy continues in our current era. Computer builder and philanthropist David Packard donated $55 million to open the Monterey Bay Aquarium in 1984 as a major education and research facility. Home Depot co-founder and philanthropist Bernie Marcus created the world’s largest aquarium in Atlanta with a $250 million gift in 2005. It includes the world’s only veterinary teaching hospital integrated into an aquarium.

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An inventive philanthropic experiment seeks to strengthen America by bolstering marital ties

W

hile teaching a marriage class with his wife at church 25 years ago, Richard Albertson was shocked. In what was a routine exercise, his wife rated their own marriage a lowly two on a scale of one to ten.

“I said, ‘No, no, Elizabeth, ten is the high score. Two is incredibly low,’” Albertson recalls. He pauses. “And she’s like, ‘I know.’”

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After that wake-up call, the Albertsons worked to restore their marriage—and, along the way, ­discovered a serious lack of resources available for troubled married couples. Today, Richard serves as president of Live the Life, a Tallahassee-based nonprofit dedicated to strengthening marriage and families. “Most people want a good marriage,”

PHILANTHROPY

Photos by Taryn Wolf and Andrea Scott

By Heather Wilhelm

CLOSING THE

Photos by Taryn Wolf and Andrea Scott

GAP Albertson says. “But here’s the problem: They don’t really know how to be married.”

In addition to the many couples who find their marriages floundering, there are others who never even get started in the first place. After decades of marital decline, the percentage of American adults who have never been married is at an all-time high, according to the Pew Research Center, and the percentage of children born outside of marriage is near it.

Forty percent of all births were to unwed mothers in 2014. That’s up from 5 percent in 1960. When it comes to giving their children a mother and father joined in a marriage bond, many millennials seem to be throwing in the towel.

As Charles Murray documented in his 2012 book Coming Apart, cratering marriage rates also widen a cultural divide. The marriage gap between upper-middle and working-class Americans, he has noted, now spans a whopping 35 percentage

points—up from 10 in 1960. Single parenthood exhibits the same class split.

For a nation concerned with upward mobility and economic inequality, it’s a recipe for disaster—and for those who hoped that government programs could do more than flounder at solving the problem, it’s a source of quiet despair. Among social scientists there’s little disagreement: Intact families often offer the surest formula for economic success. “Children born into a continuously married family have much better economic mobility than those in single-parent families,” writes Isabel Sawhill, a scholar with the Brookings Institution.

According to the Census Bureau, when a child has married parents, the likelihood of child poverty Heather Wilhelm is a weekly columnist at RealClearPolitics.com and a senior contributor at the Federalist. Her syndicated column appears in the Chicago Tribune, Dallas Morning News, and Kansas City Star, among other newspapers.

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drops by 82 percent. Single parents with children, meanwhile, are nearly six times more likely to face poverty than their married cohorts. While other factors certainly impact economic mobility—race, class, and educational attainment, among others—marriage is one of the strongest predictors when it comes to both family poverty and ability to climb the economic ladder.

“The retreat from marriage—a retreat that has been concentrated among ­lower-income Americans—plays a key role in the changing economic fortunes of American family life,” wrote Robert Lerman and Brad Wilcox in their 2014 study For Richer, For Poorer: How Family Structures Economic Success in America. They report that the marriage decline has brought stagnant family-income levels, increased class inequality, and contributed to a drop in men’s employment rates. “We estimate that the growth in median income of

privately funded cross-country partnership designed to strengthen families, and the religious participation that bolsters family life, in three most robust predictor” when it comes to mobility, Chetty’s study reports, “is the demonstration communities: Phoenix, fraction of children with single parents…. Arizona; Jacksonville, Florida; and Children of married parents also have Dayton, Ohio. The name, explains ­ higher rates of upward mobility if they live De Gance, was chosen to remind in communities with fewer single parents.” potential donors of the cultural root of Despite these well-established benefits, a healthy society: the self-governing “marriage,” says Catherine Tijerina, who individuals created by strong families. leads a family support nonprofit with The initiative has raised $18 million her husband, Ron, in Ohio, “is treated as over the past year to launch its pilot disposable. In our culture, the family is programs, with the goal of reaching an seen as disposable, too. Many people accept initial $40 to $50 million by the end of this as no big deal, without understanding 2017. These funds will be used to boost or accepting the far-reaching negative local nonprofits capable of making an implications of this cultural shift.” impact in its target cities. During the next five years, this first phase of a long-term Trying something new effort will seek to increase two gauges of The crisis in the modern family has community health: marital success and been a subject of cultural and political family attendance at worship services. concern for years. Various solutions The Culture of Freedom Initiative have been proposed—like the works in partnership with the National Marriage Project at the University of Virginia run by Brad Wilcox. The program connects anchor nonprofits that have an established footprint in each of the target cities with national experts, event partners, media tools, marketing assistance, and measurement methods.

It is guided by a task force of ten philanthropists with interests and families with children would be 44 percent Healthy Marriage Initiative launched at expertise in this area.

“In my view, the breakdown of the higher if the United States enjoyed 1980 the federal level in 2001. But nothing has altered the troubling national family is the most significant problem levels of married parenthood today.” facing the country today,” says task force trend lines.

The benefits of marriage go far member Toby Neugebauer, co-founder beyond dollars and cents. A robust “These are not problems that a bureaucrat or a legislator or a regulator of Quantum Energy Partners, “and field of social science suggests that the the Culture of Freedom Initiative is can really fix,” suggests J. P. De Gance, children of married parents are more executive vice president at The targeting it in an innovative way. I was resistant to drug and alcohol addiction, overwhelmed and very impressed with Philanthropy Roundtable. “These are have higher educational achievements, the sophistication and professionalism better mental health, and fewer run-ins issues of family and faith. As a friend here. I think we’re taking a fresh approach with the law. Married adults, meanwhile, from Texas once told me, trying to to a massive problem—an approach that change the country by focusing on tend to have better physical health and heretofore has not been applied.” lower rates of domestic violence than politics is a lot like trying to change the weather by playing with the thermometer. cohabiting or single adults.

This is an issue for civil society.” Such a Partners in marriage Healthy marriages also might have a powerful cultural ripple effect: personal and private challenge, even one With the goal of connecting successful with far-reaching public implications, nonprofits with other nonprofits—and Raj Chetty, a Stanford economist, has led calls for a personal approach. with analytics, communications, and research showing that a neighborhood’s With this in mind, The Philanthropy opinion- and behavior-altering tools used norms regarding marriage and family can Roundtable has recently launched a by many of the nation’s most successful alter the economic prospects of children new “Culture of Freedom Initiative”—a businesses—the initiative was designed who grow up there. “The strongest and

If the United States enjoyed 1980 levels of married parenthood today, the growth in median income of families with children would be 44 percent higher.

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PHILANTHROPY

as a “platform” approach. Rather than pushing a single top-down effort, a platform structure provides communal resources and then encourages many participants to take up issues in their own ways, with everyone working in parallel but independently toward common goals.

“Facebook is a platform that has basic rules and conditions that allow millions of people to create order around them in spontaneous ways. They can set up their own Facebook pages and communicate with each other and take action on common problems,” notes De Gance. “Likewise, across America, there are plenty of programs and individual champions out there who are, on a micro level, producing major changes in their areas when it comes to faith and family. We’re connecting and amplifying their efforts.”

One of these local champions is Creciendo Unidos in Phoenix, whose executive director, Guille Sastre, has worked since 1997 to strengthen marriages and families in the city’s Hispanic community. “There is a real hunger for these programs,” she says. “We have a waiting list, always, and people sometimes wait for a year or more. There is a perception that people don’t want to get help, or don’t care. That is not true. They may get discouraged when there is no help—but no, that’s not true.” Through ­ word-of-mouth outreach alone, Creciendo Unidos has been reaching an average of 1,500 families per year. With help from the Culture of Freedom Initiative, the group has partnered with the Chicago-based organization Family Bridges for help in expanding its reach.

“There are many local efforts across the country working on the issues of family breakdown and family formation,” says Sean Fieler, a task force member and the president of Equinox Partners and the Kuroto Fund. “But there hadn’t been anything done to scale that was really going to help donors make a

sophisticated determination as to what will work and what doesn’t work. That’s what appealed to me about this project.

It pulls together the active leaders in this space who are proving to be effective, helps them, and helps others replicate their success.”

For Jacksonville, Live the Life, headed by Richard Albertson, serves as one such anchor nonprofit. “We started in 1998 with a $60,000 budget,” Albertson recalls. “Now we’re statewide in Florida.”

That first year, Live the Life spearheaded a community marriage initiative in Leon County, Florida, which harnessed the resources of 85 churches, the county commission, the chief of police, and school-board officials— “multisector participation,” as Albertson says. By 2015, the divorce rate in Leon County had dropped 48 percent, more than double the drop in the divorce rate across the rest of the state.

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Marital marketing Through the Culture of Freedom Initiative, Live the Life has also partnered with Alpha, a marriage-enrichment and evangelization program; All Pro Dad, which uses sports to encourage strong fatherhood; and ­ThinkMarriage.org, a multimedia advertising campaign, among others. Perhaps most importantly, Live the Life will be combining policy research with microtargeted marketing to try to change behavior. “Microtargeted marketing has long existed in the commercial world. It’s existed in the political world. It is even used in the intelligence world,” says De Gance. “But in a lot of ways, the family and faith sector is still living, technologically, in the 1990s. This project is bringing it forward.”

The initiative has partnered with Right Brain People, a brand-strategy firm that’s worked with companies ranging 35

from Walmart to General Motors.

“It took a deep dive to help us really understand the emotional drivers and emotional barriers for 18- to 35-year-old working-class Americans when it comes to marriage,” said David Riggs, vice president of philanthropic strategy at The Philanthropy Roundtable. “What do they think about marriage? What do they think about faith? We wanted to know the best ways to approach this issue.”

Using the insights produced by Right Brain People research, ThinkMarriage.org, the advertising campaign partnering with the initiative, invites visitors to “Be Someone’s Someone,” with individually targeted messages sorted by where visitors are in life—Single? Married? Engaged?—with specialized messages for people in each of these areas. A campaign devoted to the idea of “Marriage Before Carriage” is now in the works.

Another project partner is Cambridge Analytica, which specializes in microtargeted outreach marketing to draw people into classes, programs, and events sponsored by the initiative.

“With our budget, we’d normally never get to access this level of advertising and outreach,” says Richard Albertson of Live the Life. “If the Culture of Freedom Initiative just did that one thing—microtargeting for nonprofits—it would be enormous. But it’s also assisting the collaboration of all these different partners with different strengths, mobilizing different partners (from the academic world to the advertising world), all to put a laser beam on this critical social issue. It’s exciting. Let’s see if we can really produce results.”

projects like the federal Healthy Marriage Initiative is that we recognize that if you’re going to gut and remove faith from the equation, you’re going to have a hard time changing family behaviors.” Although the federal program emphasized partnerships with faith-based nonprofits, he explains, Why faith and family? working with the government meant that they could not talk about their For most of the initiative’s partner nonprofits, faith is a central building faith in context, which “cut out the core” of what they had to offer. block for successful marriages; how Faith and family tend to be that plays out in programming varies by organization. “The members of the task mutually reinforcing, De Gance notes.

Married couples are more likely to force have a wide range of theological perspectives and backgrounds,” attend church, and churchgoers are more likely to form and maintain De Gance notes, “but they all agree that this is one of the most crucial healthy marriages. The groups the Culture of Freedom works with reach challenges facing our country. I think what makes the Culture of Freedom people at both ends, some checking out a congregation after participating in Initiative different from government 36

PHILANTHROPY

its couples’ class, others finding family services through their church networks.

In addition to having a moral language for understanding marital commitment, a supply of mentors and models, and practical services ranging from child care to date nights, De Gance notes, church-based groups are very efficient. Dollar for dollar, they have the furthest reach of any organization working at reinforcing family cohesion.

Their combination of experience, infrastructure, and efficiency give churches natural advantages.

But for couples seeking help but not sold on the religious angle, the initiative also includes some secular options.

Ron Tijerina, who heads Ohio’s pro-family RIDGE project with his wife, Catherine, describes his approach this way: “We’re a Christian organization,

but we teach secular programming. We are serving people from all walks of life—Buddhists, Hindus, Muslims, Jews, Christians. When we go into prisons, it’s Latin Kings, Bloods, and Crips. We have a common understanding of the importance of family, and of wanting something better for your children.”

The Tijerinas gained firsthand experience with prison when Ron spent 15 years incarcerated for an accusation that was later recanted. Through RIDGE they focus on character and family development for incarcerated fathers and at-risk teens. Over its history, RIDGE has seen 7,500 families go through its program, along with approximately a thousand young people per year.

“A lot of families have never seen what healthy looks like,” Ron says.

“They’ve been in generational cycles of divorce and incarceration and poverty.

It sounds so basic, doesn’t it? But it’s really important to us that people learn about the value of truth and commitment and family. You have to be taught how to become a man or woman of your word. This is not automatic; it has to be learned. It’s cultural. Right now, for a lot of people, it’s simply not taught.”

Fundamentally, says De Gance, “lives are influenced because of relationships. Those authentic personal relationships are the bread and butter of civil society.” Extending and deepening constructive relationships is the goal of this initiative.

indicators for later behavioral change on marriage and faith. It will additionally see whether or not a coalition of nonprofits and churches can move more than 300,000 people in these communities through some form of face-to-face, self-improvement program by the end of next year. As data comes back on those proxies, efforts will turn to producing tangible improvements in the marriage rate, divorce rate, out-of-wedlock birth rate, and church attendance rate by the end of 2020 in these three cities. If that success is achieved, philanthropists will bring its techniques to new communities.

“Even though this is a daunting task, I think it’s the most critical and important thing we can do,” says Debra Waller, the CEO of Jockey International and another member of the task force. “In these test cities, we’re starting to see results. We’re seeing that people are receptive, and craving this sort of outreach. These nonprofits across the country are grassroots; they’re people helping people; and they’re focusing

the rubber meets the road. “We have a limited window of time to prove that we can move the numbers here,” says Sean Fieler. “There’s a sense of purpose and timeline and accountability in this project. I think we’ll know what has worked and what hasn’t worked as we head into 2017—and I think that’s going to be pretty significant.”

“Look, we know these principles—strong marriages, strong families—work for a successful country,” says task force member Michael Leven, currently chairman of the Georgia Aquarium and retired president of the Las Vegas Sands Corporation. Research has shown a “success sequence”—a prescription for life that involves graduating from school, working, getting married, and then having babies—that can help to make a “culture of prosperity” available to almost any American.

You have to be taught how to become a man or woman of your word. This is not automatic; it has to be learned. It’s cultural. Right now, for a lot of people, it’s simply not taught.

on the crucial cultural elements that are necessary to sustain this country in the long run.”

Alicia La Hoz, CEO of Family Bridges, which focuses on strengthening family relationships in the Hispanic community, agrees that Small steps, big plans Is it possible for grassroots efforts to the challenge is daunting. “But what I’ve found,” she says, “is that you don’t have make a difference on such a massive to change everything right away. It takes cultural issue? At the end of 2017, the initiative plans to take stock of small steps, maybe even a single step, for successes, and what doesn’t work. While people to start turning their lives around.

For instance, when couples are able to demographic behaviors are unlikely to shift in just two years, the initiative learn and apply basic communication and conflict-resolution skills, for instance—this is tracking a number of proxies to determine if it is moving in the is what we focus on—it impacts their right direction. children, their spouses, their co-workers, For instance, the project will seek and their community.” to understand whether or not specific Now, in the three “culturalattitudes improve against an established enterprise zones” across the country benchmark—attitudes seen as leading where the initiative has gone to work, SUMMER 2016

“You can be cynical, sure. But we know the solution. We know what works. Why would you sit back and watch it go away without an effort?”

Leven asks.

Where there has been major cultural change in our country in the past, says De Gance, philanthropists and grassroots organizations have generally been the spark. “There have been many seemingly intractable social ills in our society that folks said could never be altered. Time and again we’ve shown that smart, savvy social entrepreneurs and committed donors can change them. That’s really the story of philanthropy throughout our country’s history. When it comes to faith and family, we’ve got a whole lot of people working together to make that the story again.” P 37

S POT S

By Michael Gerson and Peter Wehner

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The Ford Foundation recently announced it would reorient all of its giving—about $500 million annually—to combat economic inequality.

Two veteran social reformers encourage the foundation not to overlook the tough elements that are essential to the success of tough love.

Photos by Noah Zinsmeister

B E WA R E OF

Photos by Noah Zinsmeister

D

ear President Darren Walker and friends at the Ford Foundation: Your recent decision to direct all of the revenue of one of America’s larger foundations to reducing inequality among our people is an ambitious approach to a serious problem. Millions of Americans are having trouble advancing economically and are losing hope.

Private foundations like yours have the advantage over government of being able to invest in higher-risk, region-specific, religious-influenced, or experimental efforts that can pioneer new approaches. We wish your effort every success.

And rather than just wishing, we want to offer some ideas, unsolicited but offered in good faith, that might otherwise get overlooked in the normal processes of a large, liberal foundation.

We can all agree that the causes of income inequality defy easy partisan explanations and that solutions will be needed from all corners of our society to fight this pressing problem. This includes addressing our blind spots—those areas and gaps our ideologies skip over. What follows are some attempts to fill in those gaps: particularly in the progressive philanthropy establishment’s conventional understandings of poverty and economic stagnation.

While income inequality has increased steadily since the 1970s, that’s because the rich are getting

richer more quickly, while the middle class is getting richer at a slower pace, and the bottom 20 percent of households are getting richer at a lower rate still. Let’s start by recognizing that while this is not desirable, it would be worse if the income gap was narrowing because everyone was stagnant or getting poorer.

The social pattern most treasured by those of us on the center-right side of the opinion spectrum is not equality but income mobility. A dynamic society where overall wealth is increasing and “have-nots” get opportunities to become “haves” is where human dreams are most often happily fulfilled. It’s when reduced opportunities to rise are combined with stalled overall economic growth that social resentments and divisions tend to become most inflamed.

Among most Americans, there remains a fair degree of economic mobility today. Our problem is found near the bottom of the income scale, where mobility is weak and people often get stuck. As Isabel Sawhill and Ron Haskins of the Brookings Institution put it: “for low-income Americans…going from rags to riches in a generation is rare. Instead, if you are born poor, you are likely to stay that way.”

The deep sources of stalled social mobility In his book Our Kids, Robert Putnam sketches the social roots of stalled mobility. The educated and wealthier put a heavier emphasis on family

Michael Gerson is a visiting fellow with the Center for Public Justice and a syndicated columnist. Peter Wehner is a senior fellow at the Ethics and Public Policy Center and a contributing opinion writer for the New York Times.

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stability and community cohesion.

Parents invest time and resources in their kids—including the early childhood interaction that Putnam calls “Goodnight Moon” time. These families move themselves to places with better schools. If schools don’t live up to expectations, there are tutors or moving vans. When children get into trouble (as youngsters of every background do) there are lawyers, psychologists, and addiction-treatment counselors. In this world, children are more likely to participate in extracurricular activities and church-related groups, where they learn important social lessons. They are more likely to have links to adults beyond their family who can help with advice, internships, and jobs.

religious participation for the affluent and the poor was similar in the U.S. Thus, when children get into trouble, there are fewer “airbags” that deploy, as Putnam puts it. The result is a class divide that is fundamentally at odds with the American ideal.

Many of these social and cultural problems are related to the collapse of the blue-collar economy. Global economic trends and the soaring importance of technology in work have made rewarding careers rarer for people with limited education. As their wages stagnate, more low-income people leave the workforce entirely, relying on transfer payments and other arrangements. This can further socially isolate the poor.

Reinforce family responsibility Ford and any other philanthropy that aims to improve life for the most vulnerable should start by bolstering the family­—society’s most important contributor to human happiness and success, and the place where children get the social impulsions that influence them for the rest of their lives.

Promoting marriage, and keeping childrearing families together, communicating and working in healthy ways, is difficult as a matter of policy.

But there is no better antidote to the root causes of income inequality. Local civic initiatives designed to strengthen family life exist in nascent form. (See the article on pages 32-37 of this issue for a description of a new effort that is testing ways donors can equip There are thus three problems and strengthen our most vulnerable that any philanthropist interested in families.) There is enormous room for increasing mobility and breaching class expansion of groups like First Things divisions must take interest in.

First (which provides education on First, how can the breakdown of marriage, fatherhood, and parenting), families be stopped and reversed; how can Family Bridges (which counsels adults the positive involvement of fathers in the and helps children forge stronger lives of their children be strengthened; connections with their parents in the and how can we provide practical help to wake of a divorce), and Project 1.27 single parents raising children? (which mobilizes and reinforces church Second, how do we give more members to provide foster-care and Americans the education, skills, and adoption for hard-to-place children). social capital to compete in a modern The Ford Foundation and other economy, and reinvent themselves when donors could launch public-education industrial winds shift?

The wrong kind of philanthropic help can actually reduce economic mobility by drawing households into low-level subsistence instead of equipping them to seek something better.

Our blue-collar and low-income classes, in contrast, often live with family instability, community breakdown, and economic stagnation. The connection between childbearing and marriage has been broken, and the role of the father has become voluntary. Chronically stressed single parents are unable to invest in their children. Community institutions, including public schools, are often weak. And though research proves that churchgoing kids are less prone to things like substance abuse and delinquency, poor families are now less religiously involved, even though, historically,

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Third, how do we invigorate civic institutions in distressed communities, in order to build individual character, and provide the mentors, role models, and economic networking that a rising generation needs?

PHILANTHROPY

campaigns to help young people understand the “success sequence” that social scientists have shown to be powerfully connected to economic and emotional prosperity. We know that young adults who steadily pursue basic education, full-time work even at very modest wages, loyal marriage, and then parenthood, in that order, almost never languish in poverty.

A person need not star at any of these undertakings to make progress. (Most of us don’t.) But this remains the best path to the middle class. Public-education campaigns focused against smoking, drunk driving, and teen pregnancies have had success; this one is emphatically worth a try.

in learning. “The largest-scale experiment…in the United States” is how liberal writer Jonathan Chait describes it, “a complete overhaul, undertaken all at once,” where “the results have vindicated the strategy. As the authors [of a major assessment] concluded, ‘We are not aware of any other districts that have made such large improvements in such a short time.’”

Leaders of the Ford Foundation and all others who care about mobility should be seeking inventive ways to bring New Orleans-style charter-school revolutions to fresh fields of need. Exciting models exist not just in the Crescent City but all across our country. At KIPP’s charter Embrace the education revolution The second big influence on the economic high school in New York, for instance, the success and mobility of the next generation student body is 100 percent minority and 87 percent economically disadvantaged, yet of Americans will be their schooling. In the institution has a 96 percent graduation this area, philanthropists have already rate and is ranked as one of the best public energetically explored, proven, and made schools in New York. The KIPP network, available in many localities positive alternatives to our disappointing status quo. which now serves 70,000 students in 183 schools nationwide, and expanding Now we are at a stage where bold reforms rapidly, is perhaps our country’s single best can be rolled out on a large scale—if there example of the power of nonprofit social is the will (and willingness to put the interests of our next generation ahead of the entrepreneurship in action. And there are now many other excellent charter-school special interests that often predominate in chains with similarly impressive results, our public schools). and vast upside potential.

One remarkable template for Charter schools, like all institutions, what could be done in hundreds of vary, and not all are excellent. But studies other places is the New Orleans school

by Stanford researchers and others have system—where after Hurricane Katrina proven that, as a whole, they perform way a disastrously failed apparatus was replaced by a revolutionary, decentralized, above the average. In some places like competitive ecosystem of charter schools. Boston, the charter movement has not only changed the life course of even the most More than 90 percent of that city’s children are enrolled in charters, and they deprived children but done so, remarkably, have made remarkable improvements

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without producing a single school that would qualify as a disappointing “lemon.”

Ford and other donors should also be supporting the extraordinary work of Catholic schools in lifting up underprivileged youths. Data show that Catholic high schools substantially increase high-school graduation and college enrollment rates, improve citizenship, and build character, with the greatest positive effects on urban minority students.

Academies like St. Benedict’s Prep in Newark, New Jersey, despite being run on a shoestring, and enrolling student bodies that are almost completely low-income, minority, and non-Catholic, outperform peers in vastly better-funded public schools nearby. Tuition covers just a fraction of the budget at most Catholic (and other religious) schools; the rest is provided by donations. There are wide opportunities here for generous philanthropies. For reducing inequality among children facing high hurdles in life, you could hardly find a better bet than proven educational alternatives like religious schools, schools of choice, and charter schools.

Use civic organizations to build social capital Some of our most serious economic-mobility problems at the moment involve immigrants. Supporting organizations that help new arrivals acculturate and participate fully in society triply serve those individuals, their communities, and our national ideals.

Catholic Charities of Fort Worth is an example of the many groups now doing valuable work to help immigrants and

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refugees establish themselves in their new home. In addition to working one-on-one with many families, CCFW coordinates important social enterprises, like being the leading provider of translation and interpretation services in the Dallas-Fort Worth region, offering non-English-speakers better access to health care, education, and legal services.

Such philanthropically launched and funded enterprises help immigrants become self-supporting, while also earning the charity revenue to fund its wider work.

If the long-term economic success and mobility of a household is the goal, then philanthropists must take an interest in much more than just providing immediate services and palliatives. The wrong kind of palliatives can even reduce mobility by locking a family into low-level subsistence instead of motivating it to seek something better. A crucial feature donors should look for is whether a charity strives to ultimately get its beneficiaries off of government assistance and in a position to support themselves. This “welfare to W2” mentality generates efforts to help individuals become the drivers of their own lives.

Another essential component to independence is financial literacy.

There are now hundreds of local nonprofit projects that teach budgeting, credit-building, saving, and avoidance of expensive credit like payday loans to individuals who have little sense of such things. These are skills crucial to getting a first foot on the economic ladder. One 42

example is the Doorways to Dreams Fund, which uses video games imaginatively to educate users on personal finance and provides prize incentives that spur savings. Other nonprofits and churches have organized lending circles that help members keep one another accountable, and allow them to pool money toward goals such as tuition payments, debt reduction, or small-business creation.

Safety and order are the foundations of success To have a hospitable, economically healthy, and neighborly community, you need order. Nothing much good can happen by way of human development in settings that are dangerous, chaotic, or anti-social. That’s why progressive foundations like Ford need to be careful not to get pulled into activist movements that would undo the so-called “pro-active policing” revolution that has done so much over the past 25 years to make life safer for the urban poor. We must never forget that, to take just one representative example, there were 2,245 homicides in New York City in 1990, versus just 328 in 2014. There’s a whole lot of human relief and progress in that triumph over criminality.

We are strong supporters of juvenile justice reform that attempts to interrupt the schools-to-prison pipeline. In too many juvenile justice facilities, violence is commonplace, solitary confinement is routine, and many inmates are diagnosed with mental illness. For some juvenile offenders, alternatives to incarceration such as “intensive family treatment” PHILANTHROPY

have shown great, humane promise— confronting risk factors such as lack of supervision and poor academic skills.

Society often acts most effectively when it strengthens the ability of community institutions—in this case, families—to confront problems. And no one benefits when children are lost to a cycle of criminality, imprisonment, and recidivism.

Yet as states and communities pursue criminal-justice reform and work to end the excessive use of force, they must avoid undermining necessary police work and necessary incarceration. The spike in murder rates and other violence that some cities are experiencing is damaging impoverished minority communities most of all. Already, pressure on police combined with backlashes against prison terms and drug prosecutions are leaving more predatory recidivists on public streets. (That’s why the police chief of Washington, D.C., recently tied a crime wave to the loosing of small numbers of repeat offenders.)

Crime control is a crucial foundation for achieving almost any other social goal. That’s why aggressively maintaining public safety is ultimately one of the kindest and most helpful things that can be done for the urban poor. It is to be hoped that philanthropists will not forget this hard reality.

Philanthropists can also help by supporting organizations that intervene directly with gang members and other high-risk individuals. This is another area where there are many grassroots charities doing good work at the neighborhood level, all across the country. The Boston-based

group Roca, to take just one example, attacks recidivism among juvenile offenders by way of intense mentoring relationships focused on life skills and job training.

Many of these efforts have a faith-based core. Churches and churchgoing volunteers are important in mentoring and guiding newly released prisoners, and in caring for family members left behind by the imprisoned. Programs like Amachi have served more than 300,000 children, and it is estimated that without effective intervention 70 percent of these children would likely have followed their parents’ path into prison.

Another important factor in building safe and healthy communities is to shift away from conventional public housing that densely clusters dysfunctional behavior and creates multigenerational poverty traps. There are many creative ways that philanthropy helps people secure good homes—rented or owned. These range from national efforts like Habitat for Humanity, to local programs such as ACTS Housing in Milwaukee, a combined real estate, property rehab, and alternate lending service. ACTS helps first-time homebuyers purchase vacant and vandalized houses, renovate them, and finance the effort through extended credit counseling and Drug detox, housing, character: special lending partnerships. In so doing, prime territories for philanthropy it has enabled low-income families to own Substance abuse is another destructive their own homes, and turned derelict, driver of antisocial behavior. And here abandoned neighborhoods into too, charitable programs have outsized functioning communities. importance. From ubiquitous Another useful exemplar is Alcoholics Anonymous chapters, to the Purpose Built Communities, founded by a Gospel Rescue Missions movement that donor who realized his years of traditional provides 300 emergency shelters and giving were not making a dent in poverty. long-term recovery havens across the He decided to focus on revitalizing a single country, to rehab programs like gang-ruled neighborhood. In partnership Outcry in the Barrio or Victory with several nonprofits, he started a charter Fellowship, the mechanism of former school, enhanced community services addicts helping current ones detox, in a and infrastructure, and replaced 650 units strictly disciplined but religiously loving of public housing with a mixed-income environment, has proven effective. Outcry, development. The transformed for instance, has now spread to cities across neighborhood attracted new residents North and South America. It turns no one and provided dramatically improved away, provides its services for free, accepts opportunities for existing residents. Violent no government funding, and boasts a crime decreased 90 percent, and the greater than 60 percent success rate among low-income employment rate went from 13 those who complete the 90-day program. to 70 percent. Purpose Built Communities More donor funding could spread these has now had similar successes in 12 helpful efforts. other locations.

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Donors can also play an important long-term role by supporting more general, and deeper, efforts to build human competence and character, and weave healthy social linkages. There are many worthy nonprofits that provide friendship and guidance to children, compassionate treatment of addictions, and tough-minded guidance on life skills and work training. One essential element of encouraging opportunity and mobility is building networks of volunteers and charitable staff that will take early, positive, active interests in the lives of disadvantaged children—before they become charges of truant officers and police and probation officers. There are many wonderful charities, ranging from the Boy Scouts of America to the Positive Coaching Alliance, that encourage productive habits and wholesome moral development in the young. These character-building organizations tend to be lightly funded, and with additional philanthropic angels could be expanded to create more of the “airbags” that struggling children need to protect them as they navigate life’s obstacles.

The worst gaps in our society are not measured in income or wealth—important as these are. The most serious gaps are shortages of education, skills, and human capital. Those kinds of gaps cannot be filled by transfer payments. They can only be bridged by people acting in true compassion to help fellow human beings in practical ways. That is the classic work of charitable action. And it can address the root causes of inequality, one young life at a time. P 43

A

A Texas couple create a new community to help women exit cycles of abuse

By Anne Snyder

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PHILANTHROPY

istockphoto.com / nicoolay; istockphoto.com / filo

and Prosperity

istockphoto.com / nicoolay; istockphoto.com / filo

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xcuse me, do you know anything about these apartments? I drive by them every day and they’re just beautiful. When will they be available for rent?”

I overhear this query upon walking into the welcome lobby of the Gatehouse, a 61-acre community in Grapevine, Texas, built to serve women and children trapped in cycles of domestic violence, unemployment, and poverty. The aesthetic is so cheery and elegant, the hopeful walk-in’s mistake makes sense.

“Oh, these apartments are not for rent,” a staff person explains gently. “We exist to serve women and children in crisis who need a home.” Though it’s encircled by dry Texas brush, freeways, and the landing strips of the Dallas-Fort Worth airport, the Gatehouse is an oasis.

Founded by Lisa Rose with her husband, Matt, executive chairman of BNSF, one of America’s largest railroad companies, the Gatehouse welcomed its first residents in April 2015. “Women have been calling since we’ve had heaped-up dirt and a website,” Lisa says. So far, 47 women and 80 children have been accepted into the Gatehouse’s supportive living program, although the organization has received over 950 requests.

The Gatehouse is a Christian response to domestic violence. It aims not just to shelter women by offering safe refuge, but also to help them achieve real success in life. It provides practical resources to help women become self-supporting and independent. It offers help in healing relationships. It ministers to children and entire families.

And it stands by its residents for an extended period of time as they build a new existence for themselves.

The Gatehouse stands out among transitional housing programs in the range of its offerings: shelter, child care, transportation, food, clothing, medical care (including dental and vision), professional counseling, and spiritual resources.

“There are many good programs out there,” says Deborah Lyons, architect of the Gatehouse’s Independent Life Program, “but we haven’t found any that offer such a comprehensive menu of services a woman needs in order to thrive.”

The program looks for candidates who are ready to end cycles of abuse, who are hungry for freedom and responsibility and simply need the support to get there. Then it works hard to instill confidence and practical independence, erasing perceptions of victimhood. “We are not a shelter.

We are a community,” says Lisa Rose. “We are a pathway to permanent change.”

Starting small—and getting big Rose admits she’s an unlikely face for such a project, having no personal experience with abuse. But since 2008, she has been running something called First Friday, a monthly gathering of women at a Dallas movie theater to hear “experts in their field give proven, practical ways to navigate life’s daily challenges.”

In five years, attendance

Anne Snyder is director of The Philanthropy Roundtable’s new Character Initiative.

SUMMER 2016

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grew from 40 to 400 women, spanning many ages and walks of life.

By 2011, First Friday participants were hungering for tangible ways of improving their community.

Rose founded a nonprofit called projectHandUp, where women could apply to receive funds for needs like dental work or a car. It was satisfying, but the sporadic financial gifts could not fix deeper problems Rose and her fellow volunteers were increasingly concerned about, such as domestic abuse, unemployment, and crime.

Around this time, Rose started volunteering as an emergency-assistance caseworker at a Dallas jail. That’s where she met Deborah Lyons, who was managing housing assistance for homeless women and children. The two women began discussing ways to get at the deeper roots of domestic violence.

within the facility and from the challenges of the outside world, is discouraged.

“This is about engagement,” Rose says. “It’s physical, spiritual, mental, emotional healing. It’s re-engaging for building, with a little chapel, additional the first time as yourself for yourself.” social supports, and more ambitious While Gatehouse “members”—as services. The idea appealed to the leaders the resident women are called—are of the First Friday group, which would granted space to progress at their own supply mentors and volunteers, and Lisa pace, they do so within a well-developed and Matt Rose offered to fund it. They structure. They can come to the found a six-acre site. Then they hesitated. Gatehouse without a job, but in order “I got an awful feeling that something to stay they need to either become wasn’t right,” she recalls. She wanted the employed or enroll in school. If they program to be more ambitious. “I told my don’t have a car, the program provides husband. And he got on the phone with one so they can leave the premises. his real-estate partner and said, ‘John, she For mothers of young children, needs more land.’” moderately priced day care can be They wound up closing on arranged. Gatehouse leaders hope to 61 acres, exploding Lyons’s original build a dedicated day-care facility and vision of basic services for 24 families. preschool on site in the next year.

The new property would fit 96 families, On the one hand, the Gatehouse strives to get residents fully and happily integrated into the world beyond—working jobs, going to classes, attending events, worshiping in churches, patronizing local businesses, becoming involved in civic groups.

At the same time, the ethos of the organization and physical structure of the property resemble a protective cocoon. All of the women and children a clothing store, a chapel, an events are surrounded and enfolded with center, and more. “It’s like a city,” Rose supports that make them feel safe says, still marveling at the potential of enough to take chances, grow, and the effort she’s now overseeing. transform themselves.

“A gatehouse is a small house that A healing environment leads to a bigger property,” Rose says, Rose and her colleagues consistently explaining the name choice. “This is speak the language of faith when they the entry to their bigger life.” reflect on the provision of resources When they walk into their and the original inspiration for the Gatehouse homes for the first time, Gatehouse. But they also are pouring it’s not uncommon for women to tear large measures of human ingenuity and up. Each bed is covered with a unique, effort into building it. When it comes handmade quilt. Above their beds are to the facility’s physical environment, framed portraits of something their they’re leaving no rock unturned. children (if they are mothers) conveyed “Even amid sad, traumatic stories,” about their life dreams during the Lisa says, “you can still have a happy intake interview process. When a environment.” The aesthetic is clean member graduates from the program, and airy, punctuated by photographs she and her family can take everything of radiant mothers and flowers. Four but the furniture—a practical help “neighborhoods” are arranged in wings in restarting the next chapter, and a with front patios facing one another to reminder of the cocoon that nurtured encourage sociability. Withdrawal, both them to independence.

“Lisa had seen the repetitiveness of other programs. Every other month the women need help with their electric bill and their rent. Problems go on and on.”

Grown children of beneficiaries were coming in with the same problems. “We were bothered by the lack of permanence, of change…by the fact that what was being given was so temporary.”

The program created by Lyons was having some long-term success with women from many socioeconomic and ethnic backgrounds. But she was constrained by government budgeting and short cycles that were forcing the participants to head back into problematic environments before they had a chance to complete their degrees.

Moreover, there was friction between the faith-based paradigm of Lyons’s program and its public funding. The two women began dreaming of expanding the program in a privately funded apartment 46

PHILANTHROPY

The Gatehouse

Women can come to the Gatehouse without a job, but to stay they need to become employed or enroll in school. If they don’t have a car, the program provides one so they can leave the premises.

The Gatehouse

Matt and Lisa Rose’s prominence as active and generous citizens within the larger Dallas-Fort Worth community has attracted support to the Gatehouse from all over the city—including other individual donors, big corporations, small businesses, and civic groups. Hundreds of volunteers have logged more than 11,500 hours mentoring, managing donations, setting up apartments, taking care of the grounds, providing transportation, and more. The Eagle Scouts built toy chests for the Gatehouse children; Girl Scouts painted them. J. C. Penney and Kimberly-Clark provide many of the personal products used by residents. IBM, AT&T, and Accenture help with electronics and communications.

Texas Health Resources is a tenant on the property, providing dental services of all sorts for a flat fee of $35.

When women arrive, they’re ushered into a boutique called Keeps, where they’re given a voucher to buy brand-new clothes. They get instruction on what’s appropriate for whatever workplace they’re entering, and advice on what colors and styles suit their skin tones and figures. A voucher is also provided for the general store next door that is stocked with healthy food items. These gifts have the power to shift a mindset.

“Over the course of my relationship with [the abuser],” a Gatehouse member recently wrote, “I gradually stopped caring for myself and slowly started dressing rattier and rattier. A combination of financial punishment and wanting more and more to

An apartment building on six acres wasn’t large enough for Lisa Rose’s vision.

The Gatehouse now encompasses 61 acres, and includes a variety of services that encourage self-reliance—like providing the work-appropriate clothing pictured above.

look like part of the background means that most of my clothing right now is bland, loose, and designed to look like I am unimportant. All of what I own, currently, is secondhand from a friend.

“When I knew I had to face my abuser in court for a custody hearing, I was shaking inside and out.

My lawyer said to ‘wear something that looks as if you have respect for the court proceedings,’ but the truth is, I didn’t even know how to wear something that looked like I had respect for myself, let alone the court. I had to bring a friend to my appointment at Keeps because my barometer for how to dress is so broken. I tried on multiple outfits and as I kept looking at myself in the mirror I began to see someone I didn’t know was still there.

“The morning of my hearing I suited up and chose the most official outfit they’d given me. As I walked into the courthouse I had my shoulders back and my chin up, and more than one person thought I was a lawyer. I felt like a million bucks. When I had to speak directly to the judge, right in front of him, something about being dressed properly and looking like I was valuable made it easier to act like I was.”

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PHILANTHROPY

The Gatehouse

of 2017. The Gatehouse has had to ask one member to leave after enrollment, because of her unwillingness to put forth the effort expected.

The Independent Life Program involves daily contact with an adviser, and weekly sessions addressing areas like household functioning, budgeting and debt resolution, income and employment, education and training, legal issues, and personal and spiritual development. After the first three or so months, the member begins to formulate long-term career aspirations with her adviser, including whether further education or skills training is needed. As she gets jobs, she is expected to contribute to her expenses, including paying rent (although rent payments are held in escrow and returned to the participant at graduation). Professional Matt and Lisa Rose are currently raising $60 counseling and twice-weekly classes million for a Gatehouse endowment. teaching life skills are ongoing.

By the end of her first year, Everything but the kitchen sink the member is expected to be fully Those are the feelings the Gatehouse engaged in self-education, maintaining aims to inculcate in all of its members: employment, and learning to live stably, bold, sunny, unapologetic, hopeful. with the goal of self-support in sight.

They’re not just aiming to help them Within two years a member should achieve material security, but also to have completed her education, begun exalt the sense of possibility in women a career, and learned to manage her whose insides and sense of self have household capably. At graduation, been distorted. “We want them to find generally around two and a half years what God made them to do, and be able in, she will be able to support her to fulfill their God-given potential,” family economically. The goal is women says Lisa. who are strong and independent With the Gatehouse open barely while also cognizant of their social over a year, no one has yet graduated and spiritual needs. It is hoped from its programs, but the carefully that at graduation each participant conceived aim of everything it does is can wholeheartedly affirm Mark to put each woman on a trajectory to 5:34—“Daughter, your faith has made permanent independence. To make sure you whole; go in peace and be freed new enrollees are committed to really from your suffering.” changing their lives, the intake process The annual operating budget requires a referral, a 15-page application, for all this is $4 million, with an and an interview. The program, now estimated $35,000 needed for each half full, chooses its members with member to “thrive.” In addition to an eye to those who are most ready to the many millions they are putting in benefit from its intensive services; Lyons themselves, Lisa and Matt Rose are expects it to be fully enrolled by the end currently raising $60 million for an

endowment so the Gatehouse might live on decades after its founders retire.

Current donors are a Who’s Who of Dallas and Fort Worth philanthropists: the Rowlings, Perots, and Washburnes, and the Rees-Jones, Amon Carter, and Sid Richardson foundations. The Gatehouse has no government funding.

While Matt Rose has long been a major supporter (and board member) of the Boy Scouts of America, and generous supporter of think tanks like the American Enterprise Institute and other contributors to public policy, this enterprise is Lisa Rose’s first major philanthropic effort. The demands of raising children previously kept her volunteering close to home, or focused on her church, where she led two women’s ministries for more than 20 years. But she is a methodical doer, unafraid of big demands, and powered by a desire to help others that comes from her deep Christian faith.

“I wasn’t raised in a family that was philanthropic,” she notes. “We never talked about helping other people.” Now, though, her personal example is inspiring others. John Fegan, Matt Rose’s longtime real-estate partner who has served as the Gatehouse’s construction developer on a pro bono basis, says, “When I signed on, what took me aback was how big it was.

I didn’t see Lisa’s vision. I tried to get them to go smaller.” Today, he’s totally won over.

The Gatehouse’s ambitions seem to be expanding every week. Community outreach is on the rise. There is interest in accommodating women with larger families. There are discussions about a longitudinal study tracking the later life course of Gatehouse members.

Meanwhile, the beds are made, the lawns manicured, the shelves stocked, the counselors busy. Women and children who have suffered are moving in and preparing to take control of their lives.

Everyone is expecting transformation.

“I want these women to have a second chance,” says Fegan, “to see what their real lives are like after the end of abuse.

But watching the kids bloom—that’s generational. That’s the stuff that will last, and break an ugly cycle.” P

ideas Good Blue-Collar News That Donors Can Use Investments in “middle-skill” jobs can open powerful paths to prosperity

BY DAVID BASS

Learning to Be Useful

A Wise Giver’s Guide to Supporting Career and Technical Education ????

PhilanthropyRoundtable.org (202) 822-8333

Free copies of this guidebook are available to qualified donors.

Print and e-book versions can be purchased from major online booksellers.

SUMMER 2016

erecting programs that can bridge this economic gap.

Unfortunately, career and technical education has an image problem. In some circles technical education is associated with blue-collar jobs without much upside.

With many K-12 schools defining success simply by the number of students they send to four-year colleges, the bias against career education can be pronounced.

“That’s not to say college access is bad, but if all we do is send the message that it’s college or bust, we’re not really giving the right kind of opportunities to everybody,” says Chauncy Lennon, who leads JPMorgan Chase’s philanthropic workforce development initiatives. ­N icholas Wyman of the Institute for Workplace Skills & Innovation confirms that even though programs now exist that give students stellar credentials and career prospects, technical training remains anathema to some. “Today, ­high-schoolers hear barely a whisper about the many doors that the vocational education path can open.”

What donors can do Enter private philanthropy. For the past year I’ve been researching the best ­d onor-funded efforts throughout the nation focused on connecting workers with opportunities to enter the middle class. These programs make sure workers are j­ob-ready in a basic sense, confirming David Bass is author of the forthcoming Philanthropy Roundtable book Learning to be Useful: A Wise Giver’s Learning to Be Useful Guide to Supporting Career and Technical Education, from which this is excerpted.

BASS

­ otential. The result is that for many p working adults, college is a failed and financially costly experience that doesn’t lead to useful credentials or improved life outcomes. Even some of those who persist all the way to a bachelor’s degree discover it isn’t a guaranteed path to economic prosperity. And employers find that in an era where four-year college degrees are diluted and pushed on everyone, this traditional proxy for skills and knowledge isn’t as valuable as it once was.

Yet, strikingly, there is a growing pool of jobs today—to the tune of 29 million— that require what academics call “middle skills.” These skills are generally conferred by apprenticeships or organized postsecondary education other than a bachelor’s degree. Persons capable of doing these jobs are in many places sought hungrily by employers, and the positions pay enough to launch any steadily working head of household into the middle class.

Despite attractive salaries and benefits, employers in many places are experiencing shortages of workers qualified for middle-skill jobs—particularly in fields like health care, advanced manufacturing, and energy. Some employers like Toyota and ExxonMobil have created their own training and credentialing programs, or have partnered with local community colleges and non­p rofits, in order to keep their labor pipeline filled. Other smaller businesses have created apprenticeships or worked with ­n onprofits to pull high-school graduates into programs that will leave them qualified for positions like electrician or stonemason. General appreciation of the breadth of middle-skill opportunities, however, remains low. Businesses and low-skill workers alike need help

LEARNING TO BE USEFUL

What kind of education does it take to obtain a middle-class wage in America today? The answer might surprise you.

On the one hand, the days of earning a living with only a high-school diploma are waning; 22 percent of young adults with this level of education are in poverty today, compared to 7 percent in 1979. While offshoring and trade are often blamed for the decline of ­working-class opportunities, the fact is that U.S. manufacturing is actually ­increasing its output. Technological advancements, however, are enabling machines to replace low-skill jobs. This means that ­working-class life can no longer be solidly built on toil alone—skills are required. A 2012 report by G ­ eorgetown University’s Public Policy Institute summarizes: “In the postindustrial economy, the notion of a muscular working class has gone the way of U.S. Steel, displaced by a new class of working families in postindustrial jobs that require at least some college.”

The conventional response to this trend is to push a four-year bachelor’s degree for everyone, more or less assuming job prospects on the other side will take care of themselves. And today’s college infra­ structure is in major ways built to push young people toward a bachelor’s degree over any other credential.

The unfortunate result is that many youths are prodded onto a traditional college path they are unprepared and unsuited for, leading to high dropout rates and a growing number of Americans with some college experience—and debt—but no completed degree. This approach has also failed adults in low-wage jobs who want to boost their economic prospects but can’t realistically devote four to six years to earning a degree that might or might not improve their earning

A Wise Giver’s Guide to Supporting Career and Technical Education David Bass

49

ideas they have the entry-level skills that were the focus of our previous guidebook C ­ learing Obstacles to Work: A Wise Giver’s Guide to Fostering Self-Reliance, and then offer detailed, sometimes complex, technical education that equips workers for a r­ ewarding career and greater upward mobility.

Some of the existing efforts are broad and national. For example, J­PMorgan Chase has committed $250 million over five years to further define and disseminate middle-skill career pathways.

The Lumina Foundation is using an endowment of over $1 billion to help raise the percentage of Americans with a high-­quality postsecondary degree to 60 percent by 2025. These larger initiatives employ a variety of means—national gatherings where standards are set and

necessary, among many other interventions and incremental improvements.

An example at the local level is the Pinkerton Foundation, which directs $14 million in annual giving to support career-internship opportunities, industry-specific certifications, and rigorous job-training programs that teach both the hard and soft skills needed to advance in the workplace. Focusing on at-risk youth in the New York City region, Pinkerton encourages trainers to work closely with local employers so the skill sets developed are in line with available local jobs.

Many other foundations are m ­ aking similar investments in young people.

The Claude Worthington Benedum ­Foundation is focusing on blue-collar workers in West Virginia and southwestern Pennsylvania, even embedding career academies into high schools. In

kitchen ventilation systems)—has woven apprenticeships both into his business and into his network of private schools in North Carolina. “Apprenticeship is the best of all worlds,” says Luddy, stressing the importance of on-the-job experience. As sophomores, students in Luddy’s Thales Academy can obtain a certificate in S ­ olidWorks, which alone would enable them to make between $40,000 and $60,000 in the marketplace.

The community-college connection Recently deceased donor and Intel co-founder Andrew Grove carved his niche by offering scholarships for career and technical education. He typically gave out 100 scholarships per year to students in community college who were

Movement-building is just one way for donors to get involved. Philanthropists are also working hard to raise STEM job awareness in high school, arrange internships with area employers, and pay for the research to understand current job opportunities. needs are identified, collaborations between companies and educators, public campaigns and a­ dvocacy—to advance their missions.

The Bill & Melinda Gates ­Foundation has become involved in ways ranging from providing financial aid to collecting important data. Gates is also trying to strengthen the public image of alternative career pathways by funding research incubators like Jobs for the Future and the ACT Foundation.

But movement-building is just one way for donors to get involved. Philanthropists are also working hard to raise STEM job awareness in high school, facilitate internships with area employers, and pay for the research to understand current job opportunities and the corresponding skills 50

the City of Brotherly Love, the Lenfest ­Foundation supports Penn ­M edicine’s volunteer ­p rograms for adults, college students, and teens. Students as young as 14 can volunteer over the summer at the university’s hospital, gaining exposure to well-paid careers in medicine that are currently short of qualified workers.

Business leaders are also getting involved. In Houston, local businessman Beau Pollock needed more electricians for his enterprise and started a direct relationship with YES Prep and his local KIPP charter schools. Now students showing interest in the electric profession can work directly with his company out of high school. Robert Luddy—a donor, entrepreneur, and founder of CaptiveAire Systems (America’s leading supplier of PHILANTHROPY

t­ransitioning directly to the workforce rather than a four-year school. As Grove found, improvements in community college curricula and delivery are an excellent mechanism for training the next generation of middle-skill workers.

For example, take Rio Salado C ­ ollege in Tempe, Arizona. Rio S ­ alado educates over 57,000 students at any given time—30,000 of whom are accessing all of their instruction online. It’s the largest online community college in the U.S., and has classes that start on 48 dates throughout the year—an especially attractive feature for adult learners. The college offers a vast variety of programs— mobile apps programming, infant and toddler development, dental assisting, quality customer service, small business

startup, and paralegal. With the help of the Gates Foundation and other donors, Rio S ­ alado has peer mentors, career coaches, and other support for learners to make sure that they enroll in classes that match available ­well-paying jobs needed in the community.

Another promising example with a slightly different twist is Valencia ­College in Orlando, Florida. Leaders at the college have found that a traditional academic model—here’s a list of classes, take a few over two or so years—isn’t working well for career advancement. So instead, Valencia is doubling down and accelerating many of its programs to take around five weeks. These short bursts of ­training are ideal for adults who are already w ­ orking. “If we take them through

supports and keep students on track, says Shugart, is one of the most valuable roles philanthropy can play. But he stresses that the best way to mitigate some of these barriers is to keep the program short—the longer the program, the more likely that something will come up.

Shugart describes Orlando as a juxtaposition between two e­ conomies— high-tech prosperous jobs and low-skilled, low-paying ones. “We have the most powerful economy in the world for putting unskilled people into ­low-paying jobs,” he says. “The problem is that these jobs are hard to move up from. It takes two body lengths to reach the next rung on the ladder. So our strategy has been to add more rungs to the ladder. We have lots of people in our community who need a very short burst of training that will move their value to an employer by $2 an hour or more.”

schools are condensing a nine-month class into 16 weeks. Low-income workers can’t afford to take off a year for training, but they might be able to take evening classes for four months.

Overcome negative perceptions about ­postsecondary education. L ­ ow-income workers might not view themselves as able to successfully swim in the waters of postsecondary education. Effective programs inspire their students and affirm that completing the credential is possible and expected.

Acknowledge and account for remedial learners. Some adult learners face the fundamental roadblock of lacking skills in the basics of reading, writing, and arithmetic. Accelerated programs to bring them up to speed is essential to completing higher credentials.

Funding partner organizations that offer supports to keep students on track is one of the most valuable roles philanthropy can play. But the best way to mitigate ­barriers is to keep the program short. a series of very short tunnels, where the opportunity cost of lost wages while they’re in school is small, they’re perfectly willing to enroll,” says Valencia president Sandy Shugart. Accelerated tracks are focused on obtaining a “stackable” credential that, in various combinations, leads to a middle-skill job. Valencia’s most popular tracks are in nursing, cardiovascular technology, engineering technologies, entertainment-related technologies, criminal justice, and paralegal work.

In addition to accelerated options, Valencia works with its local Goodwill (see Jim Gibbons interview on page 14) to provide services like child care and transportation for students who need them—eliminating common obstacles that prevent students from persisting all the way to a useful credential. Funding partner organizations that offer these

Five ways to kickstart career education This concept of putting more rungs on the ladder, or “upskilling,” is gaining traction among workforce nonprofits, community colleges, and employers. I interviewed dozens of donors, experts, and nonprofit practitioners on the subject, and their remarks coalesced around five common practices: Create clear pathways. Career mapping is essential, because adult workers need a discernable return on investment before they are willing to enroll in a program. Successful community colleges and other programs demonstrate each step a student needs to take to complete the program for a credential and embark on an upward career path.

Condense timef rames and increase schedule flexibility. Accelerated programs like the ones Valencia offers are very attractive to learners. In some cases, SUMMER 2016

Offer student services that make class attendance easier. The McKinsey Social Initiative has found that distance to class is the top indicator of whether a new arrival will persist. Transportation obstacles are serious. Addressing practical hurdles like that can often make or break an adult learner’s success.

Partly thanks to creative help from donors, the field of career and technical education is ready for a renaissance. Philanthropists willing to invest and explore career and technical education will be pleasantly surprised. “This isn’t your grandfather’s vocational education,” says Lucretia Murphy of Jobs for the Future, a national nonprofit expanding w ­ orkforce opportunities.

“These are good jobs. These are w ­ ell-paying jobs. These are jobs that put people in line for promotions. These are jobs that are fulfilling.” P 51

ideas Educating Entrepreneurs

Want to increase prosperity by cultivating the next generation of wealth creators? Six things to consider.

BY BRUCE GJOVIG AND TIMOTHY O’KEEFE

Entrepreneurship as an academic discipline is just a few decades old, but it has exploded in popularity, with over 3,000 colleges now offering some form of entrepreneurship education. Strengthening these programs can bolster our economy— which needs more enterprising vigor in the next generation. But it is also possible to waste a gift.

Donations from successful business creators have built nearly all of today’s vibrant entrepreneurship programs, and donors will continue to be the major influence on where the field goes in the future. What should a potential giver look for? Following is our list of the crucial factors to bear in mind.

1. Entrepreneurship is a broad art, not a deep science Entrepreneur education should be built horizontally across campus, as a creative discipline that can touch nearly any field.

It must be about the art of innovating, not the science of commerce. There are potential entrepreneurs within medical schools, within sports programs, in flight training, among those being trained in the law, in schools of hospitality and culinary instruction.

Entrepreneurship departments and programs are often located in schools of business today. Occasionally they exist in engineering colleges. A movement is ­brewing to disperse entrepreneurship across campus and embed it within various forms of professional and technical training.

D onors should look for a horizontal, multidisciplinar y approach.

Entrepreneurship is not generally about deep specialized knowledge; it is about applying insights across fields. Flexibility, improvisation, and learning by doing are essential. A curriculum structured like a buttoned-down business administration curriculum is sure to yield suboptimal results.

52

Be wary of curricula that effectively block students from sliding into parallel disciplines to work with scientists, artists, technicians, and other specialists. Venture thinking cannot be restricted to an isolated silo. Make sure students outside the college of business have an opportunity to take entrepreneurship classes.

Encourage it as a minor, or certificate, or double major, or double degree—with entrepreneurship being fostered as a form of practical thinking that overlaps with other specific areas of knowledge.

In sum: Seek out programs willing to make entrepreneurship a campuswide option, attractive to faculty and students across a range of disciplines. Look for joint appointments of faculty across campus.

Encourage entrepreneurship research in a variety of subject areas. Be wary of a curriculum that requires lots of prerequisite courses, a narrow range of study, or has a bias for classroom work over learning and engagement in real enterprises operated by entrepreneurs, which leads to our next point.

2. Practical experience is essential Donors should support or create entrepreneur training that includes business-plan competitions, internships, mentoring by successful business people, student startups, business incubators, real investment opportunities, and other working experiences. It is important that the program develop close ties to the regional entrepreneur ecosystem. Classes have more impact if they can take place in affiliation with actual startups and working entrepreneurs, perhaps through offering local venture development services and student labor.

A center run by a college may offer training, access to venture funding, help in the details of family business, idea hatcheries, mentoring programs, and venture prizes for startups in the community. Funding PHILANTHROPY

for such centers that bring together entrepreneurial students and w ­ orking firms often comes from endowments provided by successful entrepreneurs, federal or state agency grants, or fees charged for useful services. It’s essential for centers to be autonomous from the bureaucratic policies of universities. Centers often have strong boards made up of successful entrepreneurs and investors committed to the next generation of business builders.

Academic study and research need to be balanced with practical, professional engagement with active innovators and functioning startups. Look for roughly equal numbers of clinical faculty (many of them entrepreneurs in residence or other rotating practitioners with real-world experience) and research faculty (tenure-track professors), and make sure they have equal status within the program. Faculty, clinicians, and mentors alike should foster the actual practice of entrepreneurship. Learning happens most effectively when participants “get dirty” working in, starting up, and growing viable operating ventures.

3. Let students reap the benefits of their inventions Students often develop valuable ideas during their entrepreneurial education. University policies on the ownership of intellectual property should be structured to leave control of ideas in the hands of the students who originate them. If the university directly pays a student as an employee to invent, it is entitled to the intellectual property thus produced, but beyond that rare c­ ircumstance, university IP policies should not try to Bruce Gjovig is the founding CEO of the Center for Innovation Foundation at the University of North Dakota. Timothy O’Keefe is the executive director and chairman of UND’s School of Entrepreneurship.

capture inventions which take place in entrepreneurship programs.

U nfortunately, many colleges try to do exactly that. University IP policies are generally one-sided, controlling, and ­punitive—policing rather than incentivizing creation of new commercial activity. They are generally focused on maximizing potential income to the university, not on fostering creativity and new ventures as a public purpose. Such policies strongly discourage active entrepreneurs from engaging with students or faculty—out of fear that, for instance, anything a student helps create during an internship or mentoring experience could end up being claimed by the university.

A ggressive intellectual-property claims are ultimately counterproductive.

A recent study by the Association of ­University ­Technology Managers reported that 87 percent of the top 220 research universities in the U.S. actually expend more to run offices policing IP than they receive in revenue from all IP. The vast majority of universities are not very good at commercializing innovation; they should leave this to entrepreneurs, and structure their campus policies around doing everything possible to help their students (and any entrepreneurs willing to come to campus to work with them) learn and thrive.

Donors should ask tough questions of universities regarding student IP policies.

Make sure the policy encourages students to engage in real entrepreneurship without any risk of losing full ownership of the value of commercial ideas they p ­ roduce.

Donor funding can help remove this significant barrier to student entrepreneurship, resulting in more student ventures, a more successful educational experience, and a more vibrant economy.

4. Fund strong programs; don’t let all of the money get sucked into scholarships Universities often push scholarships as the best way to build up a department. ­S cholarships make it easier to increase enrollments and maximize tuition receipts.

But scholarship funds ultimately end up in the university’s general fund and do little to build up a particular program.

Although to some it may seem counterintuitive, donors may best help students by helping to improve the quality of instruction.

This is what ultimately attracts student talent and enrollment numbers. Because entrepreneurship can only be developed with a strong focus on clinical and professional practice, funds are desperately needed to get students out into startups, functioning businesses, and student ventures. Donors will usually get far more impact from funding internships or seed capital for new business creation. In this discipline, targeted support for efforts to encourage students in the field and help them engage in real-world commerce will often be the catalyst for excellence.

A lthough donors will surely feel resistance from administration, it is worth asking universities what happens to scholarship dollars after a student’s tuition is paid. Want to double the impact of scholarship funds? Insist they flow from tuition payment into program funding for the entrepreneurship program.

5. Tightly define the uses of the gift Universities have been known to change the purpose of an endowment, insisting that evolving academic views, practical conditions, or university priorities demand it. A gift for entrepreneurship education that is only loosely defined will sometimes be used to fund activities far removed from what the donor had in mind. Gift agreements need to be crafted carefully to tie funds closely to the work of creating future entrepreneurs.

This will involve attention to details like spelling out the aims of the grant, specifying who has authority to spend funds, even reserving a right for the donor to further refine the intent and purpose of his or her gift in the future based on performance and results. Donors should focus on large intended outcomes, and avoid being overly controlling or prescriptive. Entrepreneurship is often highly improvisational, and flexibility in how funds can be spent is actually incredibly helpful to programs training the next generation of inventors. So focus on broad desired results, then insist on annual reports that spell out fund usage and actual impact. Outline in advance a means of resolving disagreements.

A ll giving is based on trust, and understanding that gifts will be used in a mutually acceptable way. Philanthropy cannot be successful if that trust is compromised. Donors should not be SUMMER 2016

imperious, but university leaders also need to be disciplined and humble if they are to remain faithful to donor intent. Make sure that partners on campus are vigilant and willing to subordinate institutional interests and enthusiasms to the purposes spelled out at the time of the gift, not only today but in the future when administrations, boards, and staff may change.

To keep things on track, donors should make site visits, sit in on classes, and remain involved with administrators and students.

To assess compliance and performance, donors may want to delay large lump-sum gifts and instead make smaller annual gifts for a period of time. Also, always keep in mind that a successful donor has a lot more than funds to contribute to the success of a program, such as entrepreneurship expertise, knowledge, and networks.

The ultimate protection against disappointing compliance and performance is a good claw-back provision. An experienced attorney can help write a reversion clause into the donation agreement, stipulating that if the university no longer applies the gift as the donor intended, the gift reverts to another charity or is applied to another purpose chosen by the donor. Consider putting an expiration on the agreement—perhaps 25 years—that is long enough to accomplish the philanthropic goal but short enough to ensure that funds will flow out the door while there is still understanding of, and commitment to, the intended purposes.

6. Find partners A final way to maximize the value of the donation is to encourage, or require, matching donations. These can come from other donors, from the university, or from state appropriations. Matching clauses can bring extra energy and commitment to entrepreneurship programs beyond what an individual donor can contribute. And the match doesn’t have to be in dollars.

It could be time, opportunity, space, etc.

A flexible matching requirement makes it likelier that interested parties will get involved and offer internships, provide mentoring, support student startups, and inject the other tangible and intangible supports from outside business partners that are more vital to entrepreneurship education than to other disciplines. P 53

books

The Quiet Man Behind the Computer Revolution Gordon Moore’s tech vision changed modern times. He wants his philanthropy to change life 10,000 years from now.

BY ADAM KE IP ER

Every few months, the same story briefly ripples across the news media: Moore’s law will soon be kaput. To the extent that the general public can be said to know anything about Moore’s law, it seems to know two things. First, Moore’s law is a rule of thumb that describes how computer chips will keep getting better and cheaper. And second, reports of its death have been greatly exaggerated.

But few people, even among the high-tech cognoscenti, know much about the Moore behind the law. Gordon Moore helped create and then guide the microchip industry. As that industry transformed modern life, he became vastly wealthy. Today he gives away his fortune through one of the biggest foundations in the United States. And yet, because he has always been a low-key individual, intensely focused on work, business, and technology, he is less familiar to the public than many Silicon Valley figures who have taken more pleasure in the limelight.

A new biography makes it possible to know Moore much better. Written with the cooperation of its subject and his family, Moore’s Law is the product of a trio of authors who draw on interviews with everyone they could think of and archival materials from every conceivable source. The result is an exhaustive, if at times exhausting, account of the man’s professional career, private life, and philanthropic aspirations. It shows how this constitutionally conservative man—a self-described “accidental entrepreneur”—came to lead a revolution.

Gordon Moore was born in 1929 into a family that had arrived in California just before the Gold Rush. He spent his first nine years in a small farming community originally settled by his great-grandfather. Moore’s father, a WWI infantry veteran, was an undersheriff; Moore’s mother came from the family that ran the only store in town; they were practical, stoic, thrifty people. Natural introversion and the presence of the Pescadero Creek near his backyard led Moore to a lifelong interest in fishing.

Moore’s intense reserve caused him problems in school—he nearly had to repeat first grade and 54

Moore’s Law: The Life of Gordon Moore, Silicon Valley’s Quiet Revolutionary

By Arnold Thackray, David Brock, and Rachel Jones

PHILANTHROPY

was later tossed into a remedial speech class—until he discovered chemistry, which his biographers call “his first true love.” Moore’s next-door neighbor had received a chemistry set for Christmas. The two boys started blowing stuff up. There followed years of hands-on, and sometimes hands-scorching, experience in a home lab he built for himself. “Most people who knew me then would have described me as quiet,” he recalls, “except for the bombs.”

Moore spent his first two years of college at San Jose State, where he studied chemistry (and would still make “a bomb now and then, for old times’ sake”), and where he met Betty Whitaker, a journalism student. Betty had grown up on a fruits-and-nuts ranch in what was then known as the Valley of Heart’s Delight, now known as Silicon Valley. The two stayed an item even when he transferred to Berkeley, where his professors included three future Nobel laureates.

The summer after his commencement, he asked her to marry him, which she did, after planning the event all on her own. “I was even going to work on my wedding day,” he recalls. A day and a half later, he started his graduate work at Caltech.

While Gordon took courses with such scientific luminaries as Linus Pauling (“very intimidating”) and Richard Feynman (“a lot of fun”), Betty took a job tracking projects at the Ford Foundation, which was suddenly flush with cash after the death of Henry Ford.

Gordon finished his Ph.D. in just three years.

Betty, for her part, “received a certificate then in its heyday, a ‘PhT,’ for ‘Putting Husband Through,’ bestowed on her by the wife of Caltech’s president.”

The Moores spent two years in suburban ­Maryland while Gordon worked for a military-funded research lab. This period was marked by the happy arrival of the first of their two children, but was in many other respects a lonely and unsatisfying time.

Then he received the phone call that made his career. It was physicist William Shockley, with a job offer. Shockley had worked at Bell Labs in the 1940s and played a critical part in creating the first practical transistor, a device that could replace the fragile, bulky vacuum tube used in radios, scientific instruments, and the room-sized computers of the era. The early computers were so big partly because they required thousands of vacuum tubes, and the science-fiction writers of the era imagined an upward spiral: computers that were ever smarter and therefore ever bigger—building-sized, city-sized, and beyond. The transistor would make it possible to have more powerful computers that were smaller—desk-sized, pocket-sized, and beyond.

When Shockley called Moore in 1956, the world was only just awakening to the transistor’s potential applications, and Shockley (who would win the Nobel Prize in physics later that year) wanted to make a decisive move. He was starting a new business venture out in California’s farm country, and invited Moore to help perfect and produce transistors for commercial sale.

Moore jumped at the chance, but Shockley proved to be a terrible boss, and Moore soon quit along with seven ­others— the “traitorous eight”—to start their own company with the financial backing of businessman Sherman Fairchild. Fairchild Semiconductor was where Moore first learned how state-of-the-art research must relate to ever-improving manufacturing processes. It was where he grew close partnerships with Robert Noyce, an executive and natural leader, and Andrew Grove, a brilliant manager. And it was where Moore helped Noyce realize his idea for combining multiple transistors into a single “integrated circuit”—the invention of the microchip.

Fairchild was also where he formulated Moore’s law. For a special issue of the journal Electronics in 1965, Moore wrote an article explaining why and how more and more transistors could be crammed onto a microchip without increasing prices. This would happen at a steady clip, with the number of transistors on each microchip doubling every year (a figure he would later revise to every two years).

Moore’s law is not a law of nature. It is an observation and a prediction about technical possibilities. Moore grasped that fulfilling that prediction would require leadership: a clear sense of the science and economics, disciplined collaboration between the lab and the manufacturing floor, and sometimes even the ability to bring other industry players on board. He took it as his mission to make this happen.

When, by the late 1960s, Fairchild Semiconductor was becoming too unwieldy for its management structure, Moore, Noyce, and Grove quit to launch yet another company: Intel. The firm started producing new kinds of memory microchips and microprocessors. Moore shepherded his

colleagues to make Moore’s law come true, and success followed success. As Intel grew to become a giant, Moore became the de facto strategist for an entire industry.

That industry was changing nearly everything, as electronics became more powerful and computer technology was adopted in more areas of life. In an uncharacteristically colorful quotation he offered a reporter in 1973, Moore put it this way: “We are really the revolutionaries in the world today—not the kids with the long hair and beards who were wrecking the schools a few years ago.”

But Moore’s revolutionary vision was not 20/20. He did foresee that computer chips would someday go into cars and dishwashers and televisions and refrigerators and countless other appliances, a process still unfolding today. But, in arguably his biggest business blunder, he considered the prospect of personal computers “something of a joke,” according to his biographers. Perhaps Moore’s highly logical approach to business—“measure, analyze, decide”—blinded him to the possibility of sheer unpredictable human creativity, and the countless novel ways computers would come to be used.

By Moore’s own admission, his is a “much colder” and less charismatic personality than that of, say, the late Steve Jobs.

Indeed, Moore’s Law is jam-packed with descriptions of the man’s introversion and passivity. On the whole, this was a boon for the workplace and for the industry. “I don’t know of one occasion that he lost his cool,” a longtime Intel colleague says. “He provided the emotional stability for the company.”

Nor did Moore’s stolidity apparently cause many problems on the home front.

There are several jarring descriptions and personal anecdotes in Moore’s Law—as when Betty Moore says that Gordon “doesn’t like human emotions,” or when their older son, Ken, says the family operates “like we’re a little corporation.” But ­Gordon’s coolness did not prevent him from enjoying a long and strong marriage with Betty, and it provided a calm center for a family that bonded over hiking, fishing, and other outdoor activities.

The Moores began their philanthropy as a very personal, even somewhat ­h aphazard undertaking. In the 1970s, SUMMER 2016

­ ordon and Betty would stuff into a drawer G all the appeals for support they received.

At year’s end, according to Ken, Gordon “would pull them all out and spread them out across the family room and see what was there.” This annual “Santa Claus philanthropy” involved no follow-up reports or accountability; it was entirely informal.

In 1986, they established the Moore Family Foundation to handle their giving.

Managed by their younger son, Steve, this foundation has assets in the range of tens of millions of dollars. It has been a vehicle for many grants in the San Francisco Bay area, especially related to quality of life and environmental conservation. “Every place I liked was changing,” Gordon, the ­outdoorsman, told his biographers. “All the naturalness was disappearing.”

Projects on a bigger scale have been the focus of a second philanthropy, the Gordon and Betty Moore Foundation, that they created in 2000, after the value of Intel’s stock had grown so much that Gordon became the fifth-wealthiest individual in America.

This larger foundation, where Ken works as a program officer, got off to a rough start. Some of the very traits that made ­Gordon’s career and personal life stable and ­successful—his passivity and his insistence on the supremacy of method—left the staff floundering. “The great silicon revolutionary could provide no specifics on how to spend his money,” his biographers write.

And while an emphasis on metrics was essential in the semiconductor industry, it wasn’t as easily translated to the grantmaking process. The staff initially felt pressured to support projects that were strictly quantifiable, like one to preserve salmon in the Pacific. “The real reason we picked salmon,” admitted the foundation’s first president, “is that we can count them.”

Notwithstanding these early difficulties, the Gordon and Betty Moore Foundation, which today has over $6 billion in assets, has gone on to support some projects of extraordinary scope. It has made huge grants to Gordon’s alma mater Caltech, totaling $300 million over a decade (paired with another $300 million from Gordon and Betty’s personal funds); these 55

books funds helped the institute move to the vanguard of several scientific fields where it previously had only a small presence. The foundation has also supported efforts to improve training and standards for nursing, as well as other aspects of patient care—subjects of great interest to Betty. And it has paid for a wide range of science projects, including the Thirty Meter Telescope, the world’s most powerful optical telescope.

(See panorama on page 31.) Although the telescope was planned for Hawaii, where the Moores now live, its future there is in doubt: construction was halted in late 2015 following a decision in a lawsuit brought by native Hawaiians and environmentalists. “The Thirty Meter Telescope represents the next generation of optical telescopes and will enable astronomers to see further into our universe and reach back toward the beginning of time,” the Gordon and Betty Moore Foundation’s president, Dr. Harvey Fineberg, tells Philanthropy. “We hope it will prove possible to construct the telescope in Hawaii. At the same time, alternate locations are being evaluated.”

The foundation has also supported a host of environmental projects. Most ambitiously, it has since 2001 poured over $350 million into protecting the Andes-Amazon region, where deforestation has been a longstanding and very complicated problem. This funding has helped to conserve and bring under “sustainable management” some 650,000 square miles of rainforests and other ecosystems—an area four times the size of California—in Brazil and other South American countries. In North America, the foundation has funded many projects related to oceans and marine life, focusing especially on reducing ­overfishing in and improving management of coastal ecosystems. And over the course of several years the foundation gave more than $300 million in grants to the environmental group Conservation International, transforming it from a relatively small organization to one with a variety of international projects.

Moore has said he wants his philanthropic endeavors to improve life not just now but 10,000 years from now. On its face, this notion seems absurd.

We can’t even see a century into the future; for that matter, we don’t even know whether something as predictable as Moore’s law will peter out in the next decade. What could we possibly do today that might last ten millennia?

And yet, the work of the Gordon and Betty Moore Foundation suggests two ways to think about such long horizons. The first is fundamentally humble: ensure that something that exists now will exist tomorrow and the next day and the next. The second is fundamentally extreme: discover or invent 56

s­ omething new, something that will lastingly alter the trajectory of human existence. It is fitting that both these approaches should arise from the wishes and worldview of the conservative radical Gordon Moore.

Adam Keiper is editor of The New Atlantis and a fellow at the Ethics and Public Policy Center.

A Watchdog With Only One Eye This very selective “exposé” distorts reality B Y SCOT T WALT E R

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right

By Jane Mayer

PHILANTHROPY

This is a partisan book in multiple ways. First, it is deeply exaggerated. Author Jane Mayer’s sensationalism begins right on the cover with her subtitle: The Hidden History of the Billionaires Behind the Rise of the Radical Right. As my colleague Martin Morse Wooster points out, “the history she describes is not hidden, and the people she writes about are not radicals.”

Indeed, much of Mayer’s information comes from books produced by the donors she suggests are hiding their deeds. For instance, when sketching the Lynde and Harry Bradley Foundation, she describes how the family business was veering toward bankruptcy before government contracts for World War I saved it. How did Mayer unearth this? By reading a history that the Bradley Foundation commissioned and published in 1992. Similarly, she relies heavily on the authorized history of the John M. Olin ­Foundation produced by John Miller. For her history of the Scaife family, she uses a memoir by Richard Mellon Scaife that was privately published years ago. Far from being kept secret, it was handed out to everyone who attended the man’s memorial service in 2014.

Mayer’s book is an extended exercise in ­scandalmongering, reaching its apex in her attempt to tie the Koch family to Hitler, because the family business built an oil refinery in Germany in 1933. But many multinational companies did business in Germany in the 1930s. Mayer doesn’t pretend that the Koch family, ardent champions of the free market, ever felt a serious attraction to the principles of National Socialism, but she casts dark aspersions. If Mayer had wanted to expose philanthropy scandals from the period, she could have described how many “progressive” donors promoted eugenics and harsh population-control measures in Nazi Germany and elsewhere. But that line of inquiry wouldn’t fit her agenda.

Mayer’s central thesis is that we live in an oligarchy and are, as she quotes one political operative, “controlled by a handful of ultrawealthy people, most

of whom got rich from the system and who will get richer from the system.” Sure, she continues, wealthy Americans have long been influential, but “since the P ­ rogressive Era the public, through its elected representatives, had devised rules to keep the influence in check.” Now the evil rich are sponsoring a “radical reorientation of American thinking.” Today the wealthy’s “weapon of choice” is philanthropy, and they are “meeting in secret, hiding their money trails, and paying others to front for them.”

Mayer’s alarm over secret meetings and hidden money trails relies for its emotional power on her utterly one-sided portrait of the American political landscape. The Kochs and Scaifes and her other right-wing targets are presented as spending millions of dollars to advocate for public policies, ­overwhelming the opposition. She disregards hordes of donors at the other end of the spectrum who meet in private and often use vehicles like the donor-advised funds she vilifies. Careful tallies have found that left-oriented ­public-policy spending swamps ­right-oriented giving by many multiples (see pages 814 and 1143 in The Almanac of American Philanthropy for examples), but you would never know that from this book.

Billionaire environmentalist Tom Steyer—whose $74 million in left-wing political spending in the last national cycle made him the country’s top political giver— receives one bare mention in passing. George Soros, a left-wing donor whose political giving and national sway easily equals that of Charles and David Koch combined—as calculated by one of Mayer’s own favorite sources, the liberal Center for Responsive Politics—receives a few favorable nods.

Inspection of her sources reveals that the same political operative concerned with “oligarchy” noted that 52 of the top 100 individual donors in the 2014 cycle were Democrats, which Mayer describes as “a few.”

The Center for Responsive Politics has also done a major study on the massive influence of labor unions, which Mayer gives even shorter shrift. The CRP looked at organizations (businesses, trade groups, unions) through the 2002-2014 election cycles, totaling contributions to federal candidates, parties, and PACs of all kinds made by organizations’ employees, PACs, or corporate treasury. Seven of the top ten donors were unions, which gave 97 percent to Democrats.

Mayer also ignores previous inaccuracies in her reporting that have been publicly rebutted. For example, in a New Yorker piece laying groundwork for the book, she excoriated donors for $2 million in “outside” political contributions to Republicans in North C ­ arolina in 2010, claiming the money bought the election. I and other critics noted that the conservatives Mayer attacked were actually outspent by the other side. The book recycles the faulty claim.

Mayer’s largest omission of liberal ­giving involves the Democracy Alliance, which is the direct counterpart to the Kochs’ network of conservative donors and activist groups. The DA channels hundreds of millions of dollars from progressive donors to dozens of groups it deems most effective in moving public policy leftward and building progressive infrastructure. It assiduously keeps many of its efforts off the record (“dark” in Mayer’s parlance).

Mayer helps the DA stay dark. Her one explicit mention of the group doesn’t appear until six pages before the book’s end, where she vaguely refers to “the Democratic activist who tried to create a progressive counterweight called the Democracy Alliance.”

Though the DA is sufficiently secretive that we don’t know much about its inner workings, it hasn’t just “tried” to influence American politics; its donors are spending huge sums with potent results, and sometimes questionable tactics.

A discussion of such extralegal maneuvering, alleged to occur on both sides of the political aisle, could strengthen Mayer’s thesis against “dark money,” but it makes no appearance in this book. Mayer could also have compared the DA with the Kochs’ network in various ways—membership, spending, effectiveness, technique, etc.—and that evaluation could have yielded a valuable lesson in canny public-policy giving. Instead, her book leaves the reader with a severely slanted view of the public-policy ecosystem.

Mayer does concede that “advocacy philanthropy” didn’t start with conservatives but with the Ford Foundation in the late 1960s, when Ford was “pouring money into the environmental movement” and ­“supporting public-interest litigation,” SUMMER 2016

which “showed conservatives how philanthropy could achieve large-scale change through the courts while bypassing the democratic electoral process.” She also reveals that a left-wing think tank first created a companion 501c4 arm to carry out its harsher political work. And in an endnote she grants that George Soros and the ­Democratic Party ­pioneered—a decade before the Kochs—the use of an independent firm to provide microtargeting data, with controversial applications.

The difference, we are to understand, between conservative and liberal donors engaging in public policy is that conservatives only argue for less governmental control of the economy in order to enrich themselves. But that is untrue for at least two reasons. First, plenty of center-left donors advocate for self-enrichment; for instance, heavy government subsidies of solar- and wind-energy companies like Solyndra, not to mention union interests.

Second, a business owner who advocates for a freer market in his or her industry is not guaranteeing that his or her company will succeed, as countless big businesses from General Motors and Chrysler to AOL-Time Warner could attest.

More importantly, the idea that think tanks, nonprofit policy groups, and philanthropically funded university programs operate in robotic lockstep to donor demands maligns a valuable sector of American democracy. Thoughtful liberal observers such as Paul Brest, former president of the Hewlett Foundation, have lauded work funded by many of the conservative foundations starring in this book as an excellent example of philanthropic support for public-policy debates from which donors of all ideological hues can learn. Gara LaMarche, now president of the Democracy Alliance and long a leading intellectual strategist on the left, has also cited such work as inspiration, praising conservative policy philanthropy for taking the long view and investing in ideas.

The strangest element of this book is Mayer’s horror at philanthropists who thus hope to “reorient” the public’s thinking.

She seems to imply that it is insidious for donors, and the scholars and institutions they support, to speak to citizens about the fundamental issues of public policy, ­including regulations and taxes.

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That is, unless they are progressive.

You see, progressives keep the wealthy “in check,” and progressive think tanks, foundations, and journalists have been driven “by social science, not ideology,” always striving “to deliver the facts free from partisan bias.” Thus by a miraculous coincidence, everyone who has served Mayer’s preferred ideology—now and for the last century—has no political leanings, nor a hint of any bias.

That’s simply laughable. For instance, she quotes as a neutral historian professor Sean Wilentz of Princeton, an outspoken supporter of Hillary Clinton. Similarly, she invokes the “nonpartisan” Sunlight Foundation several times as an unbiased source. Sunlight’s staff rotate in and out of Democratic campaigns and activist groups in much the same way that she criticizes various foundation members and Koch employees for doing on the right.

In a final twist, the progressive fixation with campaign finance reform, which Mayer displays throughout the book, has its own “secret history.” The Pew Charitable Trusts and a handful of liberal foundation allies created a supposed grassroots base to advocate for new laws. The program officer who ran the operation later confessed that the donors hoped “to create an impression that a mass movement was afoot,” even as Pew’s own polls showed almost no public interest in the crusade. Ironically, campaign finance reform has given us the very system Mayer rails against, where political parties are so hamstrung that donors create their own alternative institutions.

If Mayer wants more disclosure and stronger parties, she should demand the dismantling of the regulatory edifice built

by Pew and its allies. And if she wants traditional American self-government, she should learn to accept the idea of vigorous public debate, whether it’s Tom Steyer funding calls for taxpayer-subsidized solar energy, or the Koch brothers supporting free trade, or the Bradley Foundation advocating for educational reform.

Philanthropy contributing editor Scott Walter is president of the Capital Research Center in Washington, D.C. 58

{books in brief }

No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy

BY LINSEY MCGOEY

I had a chance to hear Linsey McGoey speak last fall on her book No Such Thing as a Free Gift. She was earnest, and considerate of opposing viewpoints. Unfortunately, her openness to opposing points of view is not evident in the written text. The majority of her critique of Gates and other “plutocratic philanthropies,” which is patchily sourced and largely uninformed by original research, simply lays out highly statist, ­pro-government, and pro-welfare opinions, with evident anti-capitalist biases and repeated insinuations that generous deeds are inevitably bound up with self-interest.

McGoey’s opening quote from R. H. Tawney is a fitting summary of her argument: “What thoughtful rich people call the problem of poverty, thoughtful poor people call with equal justice the problem of riches.” What follows this opening is a predictable leftward narrative: Wealthy donors are using philanthropy to dodge taxes, and if they paid their fair share to begin with society would be solving its problems with greater equity and less self-gratification.

While it would be easy to dismiss this book as ranting and repetitive, McGoey does raise some interesting questions about the advent of philanthropic entities with a larger footprint than governments. She reports that Gates provides 10 percent of the total budget of the World Health Organization, more than the U.S. government in 2013. She points out that “according to its charter, the PHILANTHROPY

WHO is meant to be accountable to member governments.” Is it a problem when the WHO is also accountable to the Gates Foundation?

McGoey makes a similar argument on the domestic front. The foundation is now the largest single supporter of U.S. primary and secondary education. This becomes an objection because of her distaste for the school-reform interventions favored

by Gates: standardized testing, charter schools, online education, for-profit vendors, ­teacher-pay-for-performance, etc. McGoey does acknowledge the Gates Foundation’s responsiveness to criticism and willingness to discontinue failed policies, such as its $2 billion small-schools initiative.

Perhaps the most unfortunate piece of her critique is the psychological motivations she attributes to charitable giving. Philanthropists “are here to save the world—so long as the world yields to their interests,” she writes.

And their “answer to ineffective philanthropy is more of it.” To disagree with the Gates Foundation's approach to various issues is entirely reasonable. To argue that the organization is driven by a superhero complex that makes it oblivious to its effects is not fair.

The Gates Foundation’s commitment to eradicate polio from the face of the earth is the opposite of a vain and self-perpetuating program—it aims to press a real problem to extinction, thereby putting itself out of business. So here, McGoey shifts to criticism that Gates isn’t spending more on things she considers to be a higher priority—measuring the handful of remaining polio cases each year against thousands or millions afflicted by other diseases. This type of reasoning does not take into account the untold numbers of people who will never be at risk of polio once it is wiped out, or the funds now needed for prevention that will then be freed up for other ends.

Ultimately, McGoey’s critique rests on the assumption that reform and social progress should be led by the state, not by self-organized citizens. She seems never to have flipped her criticisms of philanthropy in the other direction and considered that for statists “the answer to ineffective government intervention is more of it.”

No Such Thing as a Free Gift raises big questions about philanthropy, generosity, and power. Any answers of useful complexity, however, will have to be provided by others.

—Karen Hyman

face face TO

1

Annual Summit for Leaders

left to right: 1. Victoria Hughes,

2

Ashbrook Center 2. Brent Christopher,

The Roundtable’s Alliance for Charitable Reform hosted its seventh annual Summit for Leaders in Washington, D.C., on April 12. Discussions centered on the upcoming elections and the potential nonprofit-sector impact, Congressional staffer insight on what lies ahead for tax reform, the value of charitable endowments, and a presentation from The Almanac of American Philanthropy on the power of private philanthropy.

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then with the Communities Foundation of Texas 3. Paul Poteet of Senator John Thune’s office, Harold Hancock of the Ways and Means Committee, Matthew Stross of Representative George Holding’s office 4. Eugene Cochrane, then with the Duke Endowment 5. David Austin,

5

Andrea Scott, Taryn Wolf

3

M. J. Murdock Charitable Trust

SUMMER 2016

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president’s note

Reasons to Join Us in Charleston, November 16-17 The Philanthropy Roundtable’s 25th Annual Meeting will take place in Charleston, South Carolina, on November 16-17, one week after our national elections. Our conference will be upbeat and forward-looking. We will focus on the role of philanthropy in preserving and strengthening what makes America truly great—respect for the individual and for community, a competitive and free economy, commitment to opportunity for all, voluntary generosity, and the p ­ roblem-solving creativity that comes from a free society.

The Roundtable is committed to reasoned argument, and our Annual Meeting will feature something missing from politics this year: civilized high-level debate about the great issues of our time. Arthur Brooks, president of the American Enterprise Institute, and Darren Walker, president of the Ford Foundation, will offer contrasting perspectives on the best philanthropic strategies for addressing poverty and bolstering upward mobility. Professors Steven Calabresi, chairman of the Federalist Society, and David Strauss, a board member of the progressive American Constitution Society, will offer opposing approaches to constitutional interpretation, as part of a series of National Constitution Center debates sponsored by the John Templeton Foundation.

Greg Lukianoff, president of the Foundation for Individual Rights in Education, and social psychologist Jonathan Haidt will also explore how philanthropists can strengthen freedom of speech and debate on college campuses, under assault from the “safe-spaces” movement of anti-intellectual militants who seek to suppress views they disagree with.

One of the greatest achievements of philanthropy in the past 25 years is the emergence of multiple charter-school networks where low-income students excel. Building on this success we will hold a pre-conference on November 15 on the great challenge for school choice over the next decade: multiplying high-quality options for parents and children in the 30 states that now have vouchers, tax credits, educational savings accounts, and other school-choice policies.

Another feat of modern philanthropy has been to spread the principles of a free society to developing countries.

Gary Haugen, founder and CEO of International Justice Mission, will describe his organization’s remarkable work to strengthen the rule of law and justice systems in Latin America, Africa, and South and Southeast Asia in order to protect poor people from slavery, child prostitution, and other forms of violence.

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We will be discussing the Roundtable’s new Culture of Freedom initiative to reverse the collapse of marriage and religious participation in America’s working-class communities. This collapse has been catastrophic economically, educationally, and psychologically. It has also led to a greater desire for government solutions, as individuals who are no longer able to turn to loving families, congregations, and neighborhoods for help in times of trouble instead look to the state for support. See Heather Wilhelm’s story on the Culture of Freedom initiative in this issue of Philanthropy.

The Roundtable is also launching a new campaign on philanthropic strategies for advancing personal character and integrity. One of our keynote speakers will be University of Pennsylvania professor Angela Duckworth, TED Talk superstar and author of the New York Times bestseller Grit: The Power of Passion and Perseverance. Duckworth argues that positive character attributes such as self-control and persistence are more important than IQ or test scores in determining academic and professional success.

We will be awarding the William E. Simon Prize for Philanthropic Leadership to Bruce and Suzie Kovner.

Bruce has been chairman of the American Enterprise Institute and the Juilliard School performing arts conservatory, and the Kovners have been national leaders in education-reform philanthropy.

As with all of our Annual Meetings, there will be numerous practical sessions on effective giving. Subjects include the uses and limitations of evaluation, how to read grantees’ financial statements, the pluses and minuses of transparency, and do’s and don’ts in involving family members in foundations. Thank you to our colleagues at Exponent Philanthropy and the National Center for Family Philanthropy for running some of these.

So long as donors and foundations continue to have the freedom to make giving decisions, we at the Roundtable believe that the greatest days of American philanthropy are yet to come. Karl Zinsmeister, our vice president of publications, is currently touring the country speaking about his extraordinary Almanac of American Philanthropy, recounting the stories of the greatest achievements of private giving in our nation’s history. At our gala 25th anniversary dinner on November 16, Karl will describe the philanthropic vision of some of America’s most innovative givers for the next quarter century.

We look forward to seeing you in Charleston.

Adam Meyerson, President The Philanthropy Roundtable

PHILANTHROPY

I wanted to bring my startup taxi business—and $3 cab rides—to Bowling Green, Ohio.

But city officials said no; Bowling Green already had enough taxis.

I fought for my economic liberty, and I won.

I am IJ.

John Rinaldi Bowling Green, Ohio

www.IJ.org

Institute for Justice National Law Firm for Liberty

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