PhilanTopic

Whither Livestrong? 5 Questions for...Leslie Lenkowsky

After years in the public eye, first as a world-famous athlete who won the grueling Tour de France, the crown jewel of international cycling, a record seven consecutive times, and subsequently for his central role in a still-unfolding doping scandal, American Lance Armstrong, a cancer survivor, resigned on Wednesday as chairman of Livestrong, the cancer charity he founded some fifteen years ago. Hours later, Nike, one of Armstrong's biggest sponsors, dropped him as a spokesperson -- and was soon joined by half a dozen other Armstrong sponsors.

Earlier today, PND spoke with Leslie Lenkowsky, professor of public affairs and philanthropic studies at the Indiana University School of Public and Environmental Affairs, about the Armstrong scandal and its likely effect on Livestrong. Lenkowsky, who writes and speaks frequently about nonprofit management and governance issues, has served as a researcher at the American Enterprise Institute, as president of the Hudson Institute and the Philanthropy Roundtable, and as CEO of the Corporation for National and Community Service.

Philanthropy News Digest: Which surprises you more: Lance Armstrong's decision to step down as chair of Livestrong, formerly known as the Lance Armstrong Foundation, or the fact he waited till now?

Leslie Lenkowsky: That he waited until now. In fact, leadership of the organization has been passing from him to others for quite a long time. Stepping down now inevitably makes his decision look like it's related to the doping accusations. Since he is planning to stay on the board, he would have done better to make the transition earlier. But in many nonprofits, founders have a way of staying a bit too long.

PND: Close association with a celebrity can be a slippery slope for an organization, especially when the celebrity's name is on the letterhead. Do you think Livestrong's efforts to broaden its appeal beyond Armstrong will be enough to keep it from seeing a significant drop in its revenues?

LL: Yes. Livestrong has a very diversified base of support, lots of members and chapters, good national partners, and, most importantly, a well-developed set of programs. It has long since outgrown its association with Armstrong, and while his troubles may weaken his value for the organization's events and in other ways, they won't produce a significant drop in revenues.

PND: What does Livestrong need to do to minimize the damage from its association with Armstrong?

LL: Continue doing what it has been doing: creating a strong nonprofit organization. Strong and clearly independent board leadership is especially important right now.

PND: This year, we've seen two major funders of cancer research, Livestrong and Susan G. Komen for the Cure, take very public hits in the media. Will the negative publicity around Livestrong and Komen affect the work and reputations of other cancer-related organizations?

LL: No. Cancer is a serious problem that affects large numbers of Americans. The problems of Komen were very different from those Livestrong has faced, and the organizations themselves operate differently from others in the field. So, I don't see a spillover effect.

PND: Will Lance Armstrong ever again be an effective spokesperson for Livestrong and cancer research more generally?

LL: Yes. Despite the accusations of his using performance-enhancing drugs, Armstrong did, in fact, survive cancer -- remember, at the time he was diagnosed his treatment was very experimental -- and he has gone on to live a productive life. Even if his victories are now tainted, having competed in the Tour de France at all is no small accomplishment for a cancer survivor. That is Livestrong's core message, and he still embodies it.

-- Matt Sinclair

Romney, Ryan, and Charity

(Mark Rosenman, a Washington-based scholar-activist and director of Caring to Change, a D.C.-based effort to promote foundation grantmaking for the common good, is a frequent contributor to PhilanTopic. In his last post, he argued that nonprofits are missing from critical policy debates.)

With the selection of Rep. Paul Ryan (R-WI) as his running mate, Mitt Romney has changed the stakes of the 2012 presidential race. Well beyond Republican versus Democrat, the question now before Americans is who we are as a nation and a people. Over the next four years, we must make decisions about public responsibility for the common good, about what we expect of government, and of what we expect of one another. The nonprofit and philanthropic sectors cannot afford to ignore this debate.

Developed by the presumptive Republican vice presidential nominee and already passed by the House of Representatives, the so-called "Ryan Plan" would have an immediate impact on many nonprofits, especially those serving low- and moderate-income people. Ultimately, however, it would affect each and every area of government support for charitable causes.

Indeed, after announcing Ryan as his running mate, candidate Romney issued a statement trying to distance himself from the plan, even though previously he had described it as "marvelous" and said he was "on the same page" as Ryan in terms of budget priorities. Charities are prohibited involvement in electoral politics, but helping to shape a public discussion about policy and our values as a nation is essential; nonprofit and foundation leaders must declare which page they are on.

Before we take a closer look at the unfolding debate, let me point out that Mitt Romney has himself already proposed similar policies. The nonpartisan Tax Policy Center concludes, for example, that Romney's detail-deprived proposal for tax reform would give the wealthiest Americans a significant tax cut while imposing tax increases on the remaining 95 percent of Americans.

This parallels Ryan's proposed budget, which would reduce tax revenues by $4 trillion over ten years -- and even more than that in the future. Those breaks, in turn, would save million-dollar-a-year earners an additional $265,000 annually on top of the $129,000 they'll get to keep if the Bush tax cuts are extended for everyone.

What's more, despite its draconian spending cuts and self-justifying rhetoric, the Ryan Plan will actually increase the deficit by $3.1 trillion between now and 2022, according to the House Budget Committee's own projections. The nonpartisan Congressional Budget Office (CBO) goes further and says the plan, if adopted, wouldn't balance the federal budget until 2040.

What kind of cuts am I talking about? Let's start with Medicare. The Ryan Plan calls for the program to eventually be turned into a voucher-style subsidy that would result in individuals having to buy more expensive medical insurance in the private market. The CBO analysis suggests that the typical Medicare beneficiary would face an additional $6,400 in annual costs by 2022, although Rep. Ryan has tried to tweak his plan since CBO's analysis was made public.

Furthermore, according to the same analysis, the Ryan Plan raises the eligibility age for Medicare from 65 to 67, creating a two-year gap when Americans wouldn't have access to either Medicare or the Affordable Care Act's health insurance exchanges. What would these changes portend for already over-stretched charities and foundations working to support and assist this growing population?

Although the cuts in the Ryan Plan go even further, the plan's most pernicious aspect involves its assault on programs serving low-income people at a time when poverty rate in America is estimated to have climbed to 15.7 percent -- or about 47 million Americans -- the highest level since 1965. Indeed, more than 60 percent of the budget cuts in the Ryan Plan -- at least $3.3 trillion -- comes from government and nonprofit programs serving the poor and those at risk of falling from the ranks of the middle class. Not counting the Medicare cuts, over $2.4 trillion of the total would be sliced from funding for health initiatives for low- and moderate-income people, while the food stamp program would be cut to the tune of $134 billion, denying assistance to between eight and ten million food-insecure people.

Moreover, cuts in low-income programs for education, training, employment, and social services are estimated to total more than $463 billion, while discretionary programs in the same areas are targeted for an additional $291 billion in cuts. Consider what it would mean, for instance, to gut the Pell Grant program and deny low- and moderate-income students desperately needed tuition at a time when higher education is increasingly promoted as the route to economic self-sufficiency.

Beyond Medicare and safety-net programs, the Ryan Plan wreaks havoc in most other areas of concern to charities and the larger public. Agriculture and food safety, the environment, highways and transportation, medical and scientific research -- all are on the chopping block, as are veterans' programs, water infrastructure, national parks, border patrol, law enforcement, and initiatives in every area of government except national security. In fact, according to the CBO, if the Ryan Plan is implemented, spending by the federal government would essentially be reduced to Social Security, health care, and defense by 2050.

In the aggregate, nonprofit organizations depend on government for about a third of their annual revenue. Foundations cannot and will not make up for these missing dollars. And individual giving, especially from individuals whose own economic circumstances increasingly are precarious, isn’t going to fill in for a government that withdraws from most of its long-recognized responsibilities.

That is exactly the possibility, however, that confronts charities and foundations today. Radical policy promoted by "Republican Social Darwinists," as Robert Reich has characterized Ryan and his supporters, cannot remain unchallenged by nonprofit organizations and those who support them.

But what can charities and foundations do? First, their leaders must speak forcefully about the essential role of government in their areas of programmatic concern. While they may be concerned about a backlash, especially from their wealthier supporters, there is a great deal of polling data to suggest that nonprofit leaders can expect to find a supportive audience on many of these tax and funding issues. A factual presentation on the Ryan Plan joined to an invocation of shared American values is likely to bring even more support for the policy positions supported by charities.

Second, charities and foundations, regardless of their mission, must invest in voter registration, voter education, and get-out-the-vote campaigns focused on their constituencies, volunteers, staff, and members of their larger communities. Such activities are permissible under law (see www.nonprofitvote.org), and they are critical to helping people understand the fundamental issues and what is at stake in this election.

In 2012, Americans will do more than elect a president, a vice president, a House of Representatives, and one third of the Senate. They will determine whether or not we believe in shared responsibility for ourselves and each other. Charities and foundations that choose to sit on the sidelines have nothing to gain and everything to lose.

-- Mark Rosenman

International AIDS Conference: Next Stop Africa?

(Sarah Johnstone is a program assistant for Africa and the Middle East at the STARS Foundation in London. This is her first post for PhilanTopic.)

As in years past, this week's biennial International AIDS Conference in Washington, D.C., has brought together representatives of communities affected by the disease and key experts in the field in order to "translate recent momentous scientific advances into action that will address means to end the epidemic."

The conference’s underlying theme, embodied in its tagline "Turning the Tides Together," is inclusivity, as reflected by the wide variety of people -- from national leaders, to representatives of community-based organizations, to people affected by the disease -- who have come to the conference to discuss issues surrounding HIV/AIDS. As in years past, the hope is that the conference will serve to catalyze progress in combating the epidemic on the international, regional, country, and local levels.

Indeed, the idea of encouraging "local responses" and "working with communities" to combat the spread of the virus has been garnering a lot of attention and is one of the important themes on a long list of conference objectives.

For those of us at the London-based STARS Foundation, it is exactly this type of approach that we believe to be the most promising in terms of turning the tide in the fight against HIV/AIDS. Through a program of unrestricted funding combined with capacity-building assistance, STARS seeks to empower grassroots and community-based organizations to use their understanding of local situations to create specially-designed programs for their target communities.

One such organization is S.A.F.E., in Kenya, which uses the performing arts to educate, inspire, and deliver social change. S.A.F.E. delivers three programs in three different communities, each of which tackles an issue specific to that community and situation, including HIV/AIDS in and around Mombasa. Although founded by British-born Nick Redding, the organization's programs are locally based and driven. All program staff hail from the community in which they work, conduct any research that is needed in the community, and design and deliver the performances themselves. Because the performances frequently address deeply rooted taboos or issues associated with severe social stigma, the local and contextual understanding of program staff is critical to the organization's success. With that in mind, the shows not only are performed in the local language, they also portray situations that reflect the experiences of the local community as documented in the pre-performance research.

S.A.F.E.'s impressive success is clear proof of the importance of local responses to issues such as HIV/AIDS. But the organizers of the International AIDS Conference have yet to see the benefits of using their event to harness that approach in any of the world's HIV/AIDS hotspots. Consider: According to UNAIDS, there were 33.4 million people living with HIV globally in 2008, of whom 22.4 million lived in sub-Saharan Africa. Contrast that with the 1.2 million people living with HIV/AIDS in the U.S. in 2009. And yet, a review of the previous eighteen conference locations quickly reveals that the conference has been held in just three developing countries -- only one of which was in Africa.

One could be forgiven, of course, for thinking it an excellent idea to hold the conference in the world's richest and most powerful country. There are at least a dozen U.S. cities with the capacity to host such an event, and the U.S. medical research establishment has led the way in unraveling the mysteries of the virus. By the same token, holding the conference in an expensive city in one of the world's most developed countries makes it virtually inaccessible to the poorest members of the global community. Surely, there are very few leaders of community-based organizations in rural sub-Saharan Africa who can afford a week-long trip to Washington, D.C. Yet, these are precisely the leaders -- and communities -- with the most to gain from the conference.

If one of the objectives of this year's conference is to leverage the attention it generates to help end, once and for all, the epidemic in the United States -- a country with more than adequate means to tackle the disease inside its borders without help from others -- surely it makes sense to hold future conferences in countries where the need is greatest and resources are scarce. South Africa successfully hosted the World Cup, the most popular sporting event in the world, in 2010. It's time for the organizers of the International Aids Conference to build on that legacy.

-- Sarah Johnstone

‘Fair and Square’ and Philanthropic

The JCPenney Company, which was founded over a hundred years ago by James Cash Penney on the principle of treating customers "fair and square," recently launched a new charitable giving program called jcp cares that aims to build stronger communities across the country.

Through the program, the company plans to support a different cause or charity each month, for at least the next six months, with direct contributions and donations from customers. The first six charities selected to receive support through the program are the USO (July), 4-H and the Boys & Girls Club of America (August), Teach for America (September), the Breast Cancer Research Foundation (October), Share Our Strength (November), and the Salvation Army (December).

As someone not privy to the closed-door discussions that led to the selection of the six charities, I find myself wondering how the company came up with its list. Okay, some of the choices are obvious. This month's charity, the USO, supports military personnel and their families -- an entirely appropriate choice in a month that includes Independence Day. Similarly, Teach for America is an obvious choice for everyone's favorite back-to-school month, and what could be more appropriate than supporting the Salvation Army's Red Kettle campaign in December.

But in an era when companies, like almost everybody else, need to compete for the dollars and attention of consumers, you might expect JCPenney to be a little more creative about how it engages customers in its philanthropy. For example, what about asking customers for nominations of organizations deserving of the company's support via Facebook or Twitter? Or, taking it a step further, being more transparent about the actual selection process it did employ?

The company has said that, from July 23 to July 31, it will donate $1 -- up to $50,000 -- to its July partner, the USO, for every customer that checks in at a JCP location via foursquare. It has also launched a dedicated page on BroadCause where customers can share their personal stories and has said in its press release that it will engage charitably minded customers through the Facebook game WeTopia. I just hope the company has a long-term vision for its corporate giving that goes beyond "clicktivism."

What do you think? Am I being grumpy, or should the company be doing more to engage its customers in its new charitable giving program? Share your thoughts in the comments selection below.

-- Regina Mahone

'On Being Unreasonable': A Conversation With Eli Broad

Over the course of a career that has spanned five decades and four industries, Eli Broad, who turned 79 this summer, has helped build two Fortune 500 companies, KB Home and SunAmerica, and, with his wife, Edythe, created the Broad Foundations, which focus on public education reform, scientific and medical research, art and culture, and civic projects in Los Angeles.

Needless to say, Broad has been asked many times to reveal the secret to his success. His new memoir, The Art of Being Unreasonable: Lessons in Unconventional Thinking, sheds some light on the path that took him from a job as an accountant in Detroit to fortune and fame. As Broad tells it, a good deal of his success stems from his willingness, over the course of his adult life, to take the kinds of chances others thought ill advised. What's more, he writes, he invariably succeeded because he and his partners did their homework and found a "niche where we could flourish."

As Broad explained during a recent conversation with PND, he hopes people looking to emulate his approach will read the book and "learn from my successes -- and, frankly, some of my mistakes."

Philanthropy News Digest: Your book celebrates the benefits of a certain kind of unreasonableness in terms of one's career path. Were you always unreasonable, or is it something you grew into?

Eli Broad: Oh, I've always thought of myself as being reasonable; it was others who thought I was unreasonable, because I'm demanding and always asking questions and not going with everyone else's flow.

I didn't start to think about unreasonableness until my wife, after we were married for several years, gave me a paperweight with a George Bernard Shaw quote on it that read: "The reasonable man adapts himself to the world. The unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends upon the unreasonable man."

PND: One thing I really enjoyed about your memoir was the chapter on asking "Why not?" What are some of the things you've learned by asking that question in a business context, and how has it influenced your approach to philanthropy?

EB: When I was a kid collecting stamps I remember reading in one of those magazines that were sent to stamp collectors that Chrysler International was selling one-kilo boxes of stamps that had been cut from envelopes collected from around the world. I took a streetcar to their office and bought a box for I forget how much. I then advertised a hundred stamps for $1.95 in the stamp magazine. I became Eli Broad, postage stamp dealer, age thirteen. And people would write to me as if I were a forty-year-old. By the time I was sixteen, I had saved enough to buy my first car, a 1941 Chevy, for $200.

You see, I've always asked, "Why not?" And people would always say, "It's never been done this way. You can't do it." I'd listen to what they had to say, but most of the time I went ahead and did what they said I couldn't do. And they'd say I was being unreasonable.

In philanthropy, my wife, Edythe, and I decided a long time ago not to give money just to maintain the status quo. We want to make a difference, whether it's in education reform, scientific and medical research, the arts, or other areas. So if we think something ought to be happening that isn't and we ask, "Why isn't this happening?" and don't get a good answer, we'll be inclined to fund it. But only if the program, whatever it is, meets three criteria: it will make a difference in twenty years; it wouldn't happen without our support; and the right people are available to make it happen.

PND: Did you have a model, either an individual or an institution, in mind when you established the Eli and Edythe Broad Foundation in the 1960s?

EB: I've always admired Andrew Carnegie and what he did in establishing libraries, colleges, and universities, and for what he said once: "He who dies with wealth dies with shame." I also agree with something someone else once said: "He who gives while he lives also knows where it goes."

PND: Is that why you and Edythe signed on to the Giving Pledge, the campaign started by Warren Buffett and Bill and Melinda Gates to encourage billionaires to give at least half of their wealth to charitable causes?

EB: We were going to do that anyway, so when Bill Gates and Warren Buffett came around we decided to up the ante from 50 percent of our fortune to 75 percent. We hope that sets an example for others to follow.

PND: The Broad Foundations today focus on four areas: public education reform, scientific and medical research, art and culture, and civic projects in Los Angeles. What's the common thread connecting those interests?

EB: I'm not sure there is a common thread. Each came about in a different way. For instance, we started supporting public education reform initiatives after traveling to countries like Japan, South Korea, China, India, and Finland. At the time, about fourteen years ago, we realized American children were not getting the education they needed if the United States was going to maintain its preeminent role in the world. We came to the conclusion that our system of public education was broken and needed to be changed and strengthened to empower teachers and students to succeed. Since then, we've done a number of things in the education space, from helping to create a cadre of new public education leaders through our Superintendents Academy and Residency initiative, to creating a million-dollar prize that's designed to encourage urban schools to boost student achievement and close the achievement gap between ethnic and socioeconomic groups.

We believe the public education system needs to be reformed in other ways, too: our students need a longer school day and school year; we've got to expand digital learning and push more resources into classrooms; and more mayors and governors need to be involved. That kind of change is happening, albeit slowly.

Our interest in scientific and medical interest came about a different way. After one of our sons was diagnosed with Crohn's disease, I did a lot of research and learned that no one had yet figured out the disease's cause or a cure. So I thought, "You know what? All these young scientists, doctors, and researchers have theories and thoughts about the disease but they're not getting funding from the National Institutes of Health or elsewhere, because they're not established." Soon after that, we went into the venture research business in inflammatory bowel disease, which led to other things. For example, it led to my giving a grant to a man by the name of Eric Lander who was decoding the genome for the federal government.

PND: Lander helped establish the Broad Institute. Tell us a bit about how that partnership came about.

EB: While I was in Cambridge, Massachusetts, in October 2001 to be inducted into the American Academy of Arts and Science, Edye and I ducked into Eric's lab and we were blown away by the robotics and computers going twenty-four hours a day and all the bright, young researchers from Harvard Medical School and MIT who didn't want to go home because they were so excited about the work that was being accomplished there. So I said to Eric, "When are you going to be done with this?" And he said, "April 2003." I said, "What do you want to do then?" And he said, "I'd like to try and create an institute to take all we've learned and get it to clinical applications." I said, "Okay, what do you need to do that?" He said, "I need $800 million." And I said, "I hope you get it somewhere."

Well, he approached a lot of people, and he couldn't do it, so I told him we'd put up $100 million if Harvard and MIT would do likewise. And that's how the Broad Institute got created. Since then, it's become a huge success and today is number-one in the world in genomics.

PND: How did you get involved in the arts?

EB: Many years ago I was founding chairman of the Museum of Contemporary Art in Los Angeles, and then I got involved in a number of other projects in the city that people thought could never happen, including the Walt Disney Concert Hall designed by Frank Gehry. I could go on, but everything we've done is really different than just supporting the status quo. It's making a difference, creating things that didn't exist, that probably should exist, and will make a difference twenty, thirty years from now.

PND: You mentioned some of the work you're doing through the Broad Prize for Urban Education. Has that prize helped to improve public education in the United States?

EB: Absolutely. We're seeing results. There are some cities that haven't received the prize but have put in their contracts with their superintendents to get the Broad Prize within x number of years. So it's creating competition. And the districts that win the prize feel very good about it.

PND: Is it more difficult to affect change in public education than in other fields?

EB: Oh, absolutely. You know, we believe in teachers. Some 95 percent of all teachers are great, but they work in a system that's broken, that has all sorts of work rules that don't let them do all the things they need to do to succeed, and that diverts too much money into central office bureaucracies and not enough into the classroom.

Recently, the Council on Foreign Relations came out with a report that said education is a national security priority, not least because 70 percent of adults in this country -- people between the ages of 18 and 24 -- are not qualified to serve in our increasingly high-tech military. That's astounding. If we want to maintain our standard of living, if we want to be a secure nation, we've got to improve public education and we've got to do it quickly.

PND: Is it important, in your view, for Giving Pledge dollars, yours and those of other Pledgers, to be used sooner rather than later?

EB: Yes, I believe so. Warren Buffett and others may have a different view, that if they make a whole lot more with their money now instead of giving it away, eventually there'll be even more money for philanthropy. But Edye and I believe in giving while we're still alive. And we don't just give money; we've also got great people at our different foundations helping the institutions to which we give with their business plans and in other ways.

PND: How do you respond to the growing chorus of critics who say that philanthropy is an activity of and for wealthy elites and that, as such, it is inherently undemocratic?

EB: Well, I don't agree with that at all. America has a long, proud history of philanthropy, and I think it is important for the wealthy to give back. Through our philanthropy in education, for example, we are working to help transform bureaucracies so that students and teachers have a chance to succeed. Governments can and should be doing this themselves on behalf of the students, teachers, parents, communities, and democracies they are supposed to serve. Unfortunately, too many are not. I think philanthropy has the ability to step in and ensure that underrepresented voices in our democracy are heard, especially when government considers this too risky to do.

Let's not forget, over the twenty-eight years since A Nation At Risk was published, public education spending in this country in real dollars has tripled, while student achievement has gone nowhere. We used to be number one in the world in terms of high school graduation rates. Now we're closer to twenty. We used to be in the top five in mathematics and now we're twenty-fifth or thirtieth. We have a failing system that people are trying to defend, and when people like Edye and I or Bill Gates get involved in trying to change it, they say, "Oh, that's not democratic." I don't agree. I think what we're doing furthers democracy, and that those who want to maintain the status quo are undermining the strength of our democracy.

PND: Why did you decide to write a memoir?

EB: Over the course of my career I've been asked time and again, "How did you start two Fortune 500 companies in two different industries?" And more recently, after my wife and I really took the plunge into philanthropy, people have asked, "How do you do all of that?" So I thought if I wrote a book about how I've done all these things, people could learn from my successes -- and, frankly, from some of my mistakes. I hope the book is helpful to young people, to entrepreneurs, and to others in a variety of fields.

PND: What advice would you give to young millionaires who are eager to use some of their wealth to make the world a better place?

EB: I think a lot of them are doing it already. Look at John Arnold, who was probably the most successful trader of oil and gas contracts. He recently announced plans to close his fund to focus on philanthropy. I think what I'm doing, and what others are doing, is setting an example for other young millionaires who want to make a difference.

-- Regina Mahone

'The Art of Being Unreasonable' Launches in New York City

I had the pleasure Sunday evening of attending "A Conversation With Eli Broad" at the 92nd Street Y, an hour-long event marking the launch of Broad's memoir The Art of Being Unreasonable. At the event, Broad chatted with broadcast journalist Charlie Rose about his long and successful career (highlights of which are shared in the book's appendix). Broad, who turns 79 this summer, has helped build two Fortune 500 companies, KB Home and SunAmerica, and created with his wife, Edythe, the Broad Foundations, which focus on public education reform, scientific and medical research, art and culture, and civic projects in Los Angeles.

Rose began his interview by asking Broad for thoughts on the state of the economy, which Broad said will not recover until the housing market improves (in 2013?), before shifting gears to focus on the book.

While Broad doesn't consider himself to be unreasonable -- as he told the audience, "I don't think I'm unreasonable; other people think I'm unreasonable" -- he writes in his memoir that he believes "being unreasonable has been the key to my success." Throughout his career, he took chances that many said he was foolish for taking -- building homes without basements at a time when such a thing was unheard of, for example -- and succeeded because he and his partners did their homework and found a "niche where we could flourish."

During the Q&A portion of the event, one of my colleagues asked Broad -- who was instrumental in creating the first biomedical research institute in the world devoted to genomics, launching the largest urban education prize in the country, and has done much to nurture the burgeoning contemporary art scene in Los Angeles -- to share some of the ways in which his foundations assist nonprofit organizations and social causes other than through grants or philanthropic investments. "Foundations have to be innovative," said Broad, especially during tough economic times. The Broad Foundations, for example, offer their grantees lots of advice and counsel and, through the Broad Superintendents Academy program, provide business leaders with the training needed to make a successful transition to leadership positions in urban school districts.

That said, the one constant in Eli Broad's long career, which has spanned five decades and four industries, is a paperweight he received from his wife inscribed with this quotation from George Bernard Shaw:

The reasonable man adapts himself to the world. The unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.

And sometimes that means asking "Why not?" instead of accepting "no" for an answer.

Were you at the event? What did you take away from the conversation? And what do you think foundations should be doing, beyond awarding grants, to address the many social, political, and economic challenges we face? Use the comments section to share your thoughts...

-- Regina Mahone

A 'Flip' Chat With Courtney O'Malley, Vice President, Starr Foundation

(This video was recorded as part of our "Flip" chat series of conversations with thought leaders in the nonprofit and philanthropic sectors. You can check out other videos in the series here, including our previous chat with Jennifer McCrea, a senior research fellow at the Hauser Center for Nonprofit Organizations and the originator of the "exponential" approach to fundraising.)

Established by Cornelius Vander Starr, an insurance entrepreneur who founded C.V. Starr & Co. and other companies later combined by his successor, Maurice R. "Hank" Greenberg, into what became American International Group (AIG), the New York City-based Starr Foundation is one of the biggest foundations you've never heard of. Chaired by Greenberg, the foundation, which earlier this week announced a $50 million gift in support of the Tri-Institutional Stem Cell Initiative (Tri-SCI), a project of Memorial Sloan-Kettering, Rockefeller University, and Weill Cornell Medical College, ranks forty-ninth on the Foundation Center's list of the largest U.S. foundations by asset size and forty-fifth by total giving but keeps a relatively low profile.

Earlier this month, PND sat down with foundation vice president Courtney O'Malley, one of ten full-time staff at the foundation, to talk about the foundation's history and areas of interest, its no-unsolicited-proposals policy, and its approach to transparency.

(If you're reading this in an e-mail, click here.)

(Running time: 6 minutes, 2 seconds)

 

The Foundation Center has an entire Web site, Glasspockets.org, dedicated to foundation transparency. To learn more about our efforts to bring transparency to the world of philanthropy, check out this Powerpoint presentation narrated by FC president Brad Smith.

Have a thought or comment you'd like to share? Use the comments section below...

-- Mitch Nauffts

Year in Review: Noteworthy Gifts

For many Americans, 2010 was characterized by continuing economic uncertainty and challenges. It was no surprise, therefore, that charitable giving, even among the mega-wealthy, reflected that uncertainty, with the number of gifts of $100 million or more up only slightly over 2009, when seven such gifts were announced, and way down from 2008, when at least fifteen such gifts were announced.

As they often are, educational institutions were the focus of many of the largest gifts, both eight- and nine-figure. In January, the Lawrenceville School, a four-year co-ed boarding school in Lawrenceville, New Jersey, received a $60 million bequest from the estate of Henry C. Woods, an alumnus, former English teacher, and trustee of the school, and his wife, Janie, for scholarships and other programs. Six weeks later, the first nine-figure gifts of the year were announced by two mid-South institutions of higher education: Oklahoma State University, which received a $100 million challenge gift from energy tycoon and alumnus T. Boone Pickens, and Baylor University in Waco, Texas, which received an anonymous $200 million bequest in support of medical research related to aging.

A number of healthcare institutions also received major gifts in the early part of the year. In January, the Burnham Institute for Medical Research in La Jolla, California, announced a five-year, $50 million endowment gift from South Dakota businessman T. Denny Sanford to expand and accelerate the institute's cutting-edge medical research. In April, the University of California, San Diego Health System received $75 million from the family of Joan and Irwin Jacobs for a medical center at the school's La Jolla campus. And in June, UCSF Children's Hospital announced a five-year, $100 million gift from Salesforce.com founder, chairman, and CEO Marc Benioff and his wife, Lynne, to support the construction of a new hospital.

No gift received more attention, however, than the $100 million pledged by Facebook co-founder and CEO Mark Zuckerberg to launch a foundation that will work closely with Newark mayor Cory Booker to improve the long-troubled public school system in that New Jersey city. The gift was especially noteworthy for being the largest made to-date by the 26-year-old entrepreneur, whose fortune Forbes puts at $6.9 billion, and for being many times larger than any gift ever made to the Newark school system.

Other noteworthy gifts announced in the second half of the year included a $100 million challenge grant from the Open Society Foundations to Human Rights Watch; a $100 million pledge from businessman Henry R. Kravis to Columbia Business School; and $50 million each from Cogent Systems founder Ming Hsieh and the Annenberg Foundation to the University of Southern California's Annenberg School for Communication and Journalism. In addition, Georgetown University received an $87 million bequest from Harry J. and Virginia Toulmin to support medical research at the school, while Cornell University announced an $80 million gift from David and Patricia Atkinson to endow the David R. Atkinson Center for a Sustainable Future, which they had established with a smaller gift in 2007.

The year came to a close with a bang, as two major arts-focused gifts were announced. In November, the Bill & Melinda Gates Foundation awarded three grants totaling $50 million to the Smithsonian Institution in Washington, D.C., for efforts to reach underserved K-12 students, expand research and public programs, and support the design and construction of the National Museum of African American History and Culture, which is scheduled to open on the Mall in 2015. And toward the end of the month, the National Gallery of Art announced what was the largest gift of the year: a collection of more than two hundred pieces of early American furniture assembled by George M. and Linda H. Kaufman that is estimated to be worth more than $250 million.

Indeed, despite the uncertain economic climate, many well-off individuals were willing to dig deep into their pockets to support nonprofits and the causes they believe in. The Benioffs, for example, increased the size of their gift to UCSF Children's Hospital from the $20 million they initially planned to give to $100 million because of the difficult economy. "I had never really thought about doing a $100 million gift. That was significantly more than anything we'd done before," Marc Benioff told the Wall Street Journal. "We strongly believe in giving back to the San Francisco community that has given so much to us, and where the majority of the employees at Salesforce.com live. Additionally, given the decline in personal philanthropic giving and reduced government funding, we recognize that we need to do more."

Related:

• Number and Size of Mega-Gifts Fell in 2009 (1/6/09)
• Lawrenceville School Receives $60 Million Gift From Former English Teacher (1/15/10)
• T. Denny Sanford Donates $50 Million to Burnham Institute for Medical Research (1/29/10)
• Oklahoma State University Receives $100 Million Challenge Gift (3/2/10)
• Baylor University Receives Anonymous $200 Million Bequest (3/5/10)
• UCSD Health System Receives $75 Million for New Medical Center (4/6/10)
• UCSF Children's Hospital Receives $100 Million Gift From Marc and Lynne Benioff (6/18/10)
• Human Rights Watch Receives $100 Million From Open Society Foundations (9/8/10)
• Georgetown University Receives $87 Million Bequest (9/15/10)
• Facebook Founder Commits $100 Million to Support Newark Public Schools (9/24/10)
• Kravis Pledges $100 Million to Columbia Business School (10/6/10)
• University of Southern California Receives $100 Million From Alumnus, Annenberg Foundation (10/18/10)
• Cornell University Receives $80 Million for Research (10/29/10)
• Smithsonian Institution Receives $50 Million From Gates Foundation (11/5/10)
• National Gallery of Art to Receive Collection Worth $250 Million (11/15/10)

Bill Gates at the 92nd Street Y

I had a chance to see Bill Gates being interviewed by Matthew Bishop, New York bureau chief for The Economist and co-author of Philanthrocapitalism: How the Rich Can Save the World (read our interview with him here), the other night at the 92nd Street Y here in New York.

Security was surprisingly light, and the Y's wood-paneled concert hall offered a suitably dignified setting for the well-attended event, though both men walked on stage tieless and in good humor. Bishop, who devotes a whole chapter to Gates and the Gates Foundation in his book, almost immediately referenced the February TED talk at which Gates, to illustrate a point, released a swarm of mosquitoes into the audience. Then Bishop, to much laughter, pulled out a can of insect repellent and set it down on the table between them. (You can see the aerosol can in the picture above.)

From there, the conversation moved briskly. At one point, Gates, a man clearly comfortable in his own skin and with his own wealth, dismissed Bishop's suggestion that the global financial crisis had been caused by "the rich" and rejected the notion that he -- or any person of wealth -- should view philanthropy as a path to redemption.

Other takeaways from the evening:

• It's possible but unlikely malaria will be eliminated by 2025; resistance and the evolving nature of the pathogen makes that difficult. At the same time, much is being done (bed net campaigns, etc.) to control the disease and limit its toll, in terms of deaths and lost productivity, in the developing world, and Gates expects that to continue.
• Polio, now down to about 2,000-3,000 cases a year (most of them in Nigeria, India, and a few other places), is likely to be the second disease (after smallpox) to be eradicated from human populations. It is difficult, and expensive, to eliminate those last few cases, but it will happen.
• An effective vaccine for AIDS will probably be the most expensive vaccine ever developed, and we're unlikely to see one in the next ten years, though maybe in twenty. But Gates is confident one will be developed in his lifetime.
• Gates has no regrets about the foundation's focus on specific diseases as opposed to taking a more "holistic" approach to public health problems. As he told Bishop, in the developing world the first thirty days of life are where you lose the greatest number of children, and the diseases the foundation is targeting are responsible for causing many of those deaths. As you reduce the number of childhood deaths -- down from 12.5 million in 1990 to under 9 million today -- parents respond by having fewer children and spending more money on educating the children they do have. Lower birthrates and a better educated populace leads to more opportunity and economic growth, which feeds back into public health initiatives. So, Gates added, in a sense you could say our approach is holistic, in that everything we do is related.
• Unlike governments, which change on a regular basis, or business, which tends to focus on the profit expectations of shareholders, foundations are well-suited to funding risky research and unproven approaches because they can stay the course over the many years and even decades it takes to achieve big, hairy, audacious goals (my phrase). And because of our assets and scale, said Gates, we have to tackle big problems.
• It's easy to criticize the lack of clear, understandable metrics in social change work, but at the end of the day the field (i.e., foundations and their nonprofit partners) is pretty good at identifying and moving into areas where traditional market signals don't exist or have failed.
• Entrepeneurship is inherent in human nature and will flourish when structural impediments -- corruption, lack of infrastructure and/or rule of law -- are removed. In the U.S., there are immense opportunities emerging for entrepreneurs in science-related fields.

Gates's final word of advice to other philanthropists in the audience (and there were more than a few there, including a couple of billionaire hedge fund types) was direct and to the point: Pick something you love and don't spread yourself too thin.

Come to think of it, good advice for anyone.

(Photo credit: Joyce Culver for the 92nd Street Y)

-- Mitch Nauffts

TED on Sunday: Alex Tabarrok on the Benefits of Globalization

In this upbeat talk, economist and blogger (Marginal Revolution) Alex Tabarrok argues that globalization and the lowering of barriers it has fostered are beginning to help us repair the horrific damage created by the political and economic storms of the first half of the twentieth century. But the best, says Tabarrok, is yet to come, as free trade spreads prosperity to all parts of the world and the globalization of the market for ideas creates powerful incentives for tackling -- and solving -- many of the world's most daunting problems. (Filmed: February 2009; Running time: 14:35)

Liked this talk? Then try one of these:

• TED on Sunday: Majora Carter on Environmental Justice
• TED on Sunday: Al Gore on Climate Change
• TED on Sunday: Sylvia Earle on Saving the 'Blue Heart' of the Planet
• TED on Sunday: James Howard Kunstler on the Death of Suburbia
• TED on Sunday: Clay Shirky on Epochal Change
• TED on Sunday: Mark Bittman on How We Eat
• TED on Sunday: Hans Rosling on the Dimensions of Development
• TED on Sunday: Sir Ken Robinson on Education and Creativity

-- Mitch Nauffts