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Giving It Away: An Open Letter to Bill Gates

Dear Mr. Gates,
Many people, myself among them, are interested in what you will do with the $40 billion or so you have accumulated. You have said that you intend to give away 95 percent of your fortune, but that you are waiting until your fifties before seriously embarking on the project. With your forty-second birthday recently passed, that means you have nearly a decade to continue building your company and your net worth and preparing for a task that promises to be more difficult than earning the billions in the first place.

I say more difficult because I am assuming, from your relatively modest philanthropic efforts thus far, that you want truly to do good and not merely to be thanked by some and noticed by many. On that assumption, and as one who has given considerable thought to the history and the current condition of American philanthropy, and who has lately come to administer a relatively small educational foundation, I want to offer some advice.

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Vast sums are being given away in the United States today, the greater part by individuals with fortunes large or small or even with no fortunes at all. In 1996, for example, individuals at every level gave a whopping $120 billion to charity, as opposed to the $8.5 billion given by American corporations. Institutionally speaking, however, the biggest and by far the most influential philanthropic sector is made up of foundations. The country boasts a staggering 40,000 foundations, whose combined assets run to around $225 billion and whose annual gifts total approximately $12 billion.

If you were to enter this arena aggressively, you could easily place yourself at the top of the heap in any ranking of philanthropic firepower. For better or for worse, you could make a real difference. That is why I mean to begin by offering you a cautionary tale or three.

Let me put the case starkly. For the past several decades, “big philanthropy” in this country has had little if anything to do with good works as that term is generally understood, and still less to do with buttressing the institutions and values of a free society. Instead, much philanthropic activity, especially on the part of foundations, is engaged in subverting those institutions and values.

Perhaps the most familiar example is that of the Ford Foundation. The story begins in the 1950’s with the Grey Areas program, described by one recent student of philanthropy, Heather Mac Donald, as a “turning point in foundation history” (“The Billions of Dollars That Made Things Worse,” City Journal, Autumn 1996). The central premise of this program was that the ordinary municipal agencies, charities, and political processes of American cities could not be trusted to do right by poor people. Rather, the whole “establishment” needed a radical shaking-up.

As Mac Donald shows, however, the means chosen for this shaking-up, epitomized in the slogan “community control,” led to disastrous results, not only locally but nationally, when it was adopted as the favored strategy of the federal War on Poverty. But the Ford Foundation was undeterred by experience. It spent the decades of the 60’s and 70’s sponsoring the calamitous decentralization of New York City’s public schools, subsidizing organizations that purported to speak for “victim” groups of every imaginable stripe, and replacing what had been a distinguished record of support for the fine arts with color- and gender-coded aid for “artists” whose credentials were measured by the stridency of their “attitude.”

When Henry Ford II resigned in 1977 from the board of the huge foundation that bears his family’s name, not only did he publicly rebuke its leaders, staff, and grantees, but he privately called the institution a madhouse. Today, what that madhouse has wrought extends well beyond Ford’s own palace in midtown Manhattan. For the Ford Foundation, as former Secretary of State Dean Rusk once remarked, is the “fat boy in the canoe,” and what it does “makes a difference to everybody else.” Foundations that have followed its lead include giants like Carnegie, Rockefeller, Mott, and Mellon, and many smaller and less famous ones.

The litany of effects is well known, and includes almost every aspect of the assault on authority that we associate with the 60’s and 70’s. Racial preferences, radical feminism, “peace studies,” crusades for prisoners’ (but not victims’) rights, sundry efforts to reshape American foreign and defense policies in general and, in particular, to support friendship with the Soviet Union, Castro, or the Sandinistas or to advance the cause of the PLO and the IRA—all these initiatives and more were funded at least in part, and in some cases were conceived, by American foundations.

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By the 1980’s, it was clear that these efforts had succeeded, if not in changing the mind of the American electorate then in decisively affecting the outlook and the discourse of American elites. And so, as yesterday’s student radicals grayed into today’s tenured (but still radical) professors and policy wonks, the charitable landscape evolved as well. Thanks precisely to the earlier successes, it became possible to continue the anti-establishment project of the 1960’s and 70’s by other and even more effective means: by funding the establishment itself.

Universities and cultural institutions were the most obvious candidates for the new largesse, as were the mainline churches and media like National Public Radio. But so, it turned out, was government. Progressing from their earlier role as testing sites for favored public policies, foundations now became virtually one with federal and state agencies. They began to design “collaborative” programs that blended private and public dollars, smudging the bright line between the proper realm of government and the distinctive domain of charity.

Foundations today even look like government. Although staffers eat better lunches than do government employees, and are more apt to work in New York or Los Angeles (or Cleveland or Kansas City) than in Washington or Sacramento, the philanthropic world has developed a virtual civil service of “professional” employees who move from one foundation to the next while scaling the career ladder. Like federal bureaucracies, foundations are regularly lobbied by their “constituents,” employ lots of consultants, and are caught in the hammer-lock of political correctness. And like government, they have become smug, self-referential, and ossified.

As for the policies they embrace, and the programs they fund, these, with honorable exceptions, still remain conceptual throwbacks to the 1960’s, though the hard political edge of that period has partly yielded to a subtler attack on the morals, social standards, and traditional culture of Americans. Consider, if you will, this sampling of recent grants by the Ford and Rockefeller Foundations:

  • $5,000 for “a documentary about women’s sexual awareness and self-esteem”;
  • $15,000 for the creation and production of “a new collaborative theater piece entitled Old, Jewish, and Queer”;
  • $25,000 for a catalogue of the show, Prison Sentences: The Prison as Site/The Prison as Subject;
  • $35,000 for an “interactive installation based on an Iroquois prayer”;
  • $35,000 for “a one-year installation on the World Wide Web that will provide an ongoing discussion of gender, sexuality, and the justice system”;
  • $35,000 for “an interactive, multimedia CD-ROM and related Web site about the Zapatista rebellion in Chiapas, Mexico”;
  • $45,000 to “bring together local community organizations and performing-arts groups to address the issue of environmental racism”;
  • $50,000 to the University of California at Davis to “enable feminists from abroad to participate in a residency program at the university’s Gender and Global Issues Group”;
  • $86,500 to a New York center to “evaluate community-based programs to counter homophobia among youth”’;
  • $250,000 to support resident fellowships in the humanities at the Center for Lesbian and Gay Studies of the City University of New York.

To be sure, not all foundations are subsidizing as much folly as Ford and Rockefeller, but the grants listed above are typical. If you were rash enough to attend one of the massive conclaves of the Council on Foundations, the industry’s dominant organization, or any of the smaller conferences of the “affinity groups” allied with it, you might think you had fallen through the looking glass. In Honolulu last May, for example, at the Council’s 48th annual meeting, you might have participated in sessions on “racial identity, racial politics, and philanthropy” or on the “new paradigm” of “disability culture.” You could have joined the “working group on funding gay and lesbian issues.” Or, if hungry, you might have dropped by for “multicultural snacks” at a “site session” devoted to the question, “Is the Statue of Liberty Merely a Myth?”

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What I have said so far might lead you to the reasonable conclusion that, in establishing a foundation, the trick is to be clear about what you want to accomplish, rather than leaving it to “professionals” to decide. Indeed, many is the philanthropist who has failed to master that simple trick. No one who knew the late John and Catherine MacArthur, for example, could doubt that they would have been appalled by the use of their insurance and real-estate fortune to lavish grants on left-leaning intellectuals, performance artists, and race-and-gender specialists. The MacArthurs simply failed to provide guidance, and they were not around to make mid-course corrections.

Plenty of philanthropists, however, know exactly what they want to do, and, through a foundation or on their own, go about doing it in their own lifetimes. The problem is that their ideas are merely imitative of what the “professionals” are already doing, if not still worse. Thus, we must suppose that Ted Turner and Jane Fonda are hardly ignorant of the politics of the United Nations, or the wasteful and often harmful projects undertaken by its constituent agencies—projects now to be enlarged thanks to Turner’s absurd but indisputably high-profile billion-dollar gift. We must also believe that the secretive Charles Feeney, wealthy from his ownership of the world’s duty-free stores, knew what he was doing when he wove a web of offshore corporations and foundations to shield his sizable gifts to, among other “charities,” Sinn Fein and its military wing, the IRA. Perhaps he did not intend his money to buy the bombs that would be planted in London subways, but when you arm militant nationalists, that is one predictable result.

Walter Annenberg is a different story. Of this builder of TV Guide, great friend of Ronald Reagan, and former ambassador to the Court of St. James’s, whose foundation ranks twelfth in size in the country, perhaps the kindest thing to say is that he has allowed his affection for public education to blind him to its realities. Annenberg has given hundreds of millions to urban and rural school systems and sundry intermediary organizations, most of which are either part of the petrified education establishment or vendors of pedagogical snake oil. Advised by such eminences as Vartan Gregorian, president formerly of Brown and now of the principal Carnegie foundation—this really is an incestuous world—Annenberg was surely aiming in all sincerity to make American education better. In sad fact, for all the improvement his generosity has wrought, he might as well have joined Ted Turner and poured his dollars into the sea.

Today’s biggest wheel among do-it-yourself philanthropists is the buccaneer investor and currency trader George Soros, now giving away several hundred million a year in the U.S. and abroad. A refugee from both the Holocaust and Stalinism, Soros has an abiding hatred of authoritarian regimes. But his fondness for the “open society,” a term he invokes in homage to his intellectual mentor, the philosopher Karl Popper, who coined it, has taken some strange turns and brought him some dubious companions and grantees.

On the board of the Open Society Institute, Soros’s American foundation, sits Lani Guinier, proponent of the idea that only blacks can represent other blacks “authentically” and an early, ill-starred nominee as an assistant attorney general for civil rights in the Clinton administration. The institute is best known for funding efforts to decriminalize various drugs and to develop “alternatives to law enforcement” for addicts and dealers. Abroad, along with acts of genuine charity—to Bosnians in need of water, Gypsy children in need of kinder-gartens, homeless Hungarians in need of mattresses—Soros has become a major political activist pushing causes of the Left. His aim, he says, is to help rebuild civil society; if so, one wonders why his foundation is so preoccupied with “the integration of cultural, ethnic, gender, age, and other diversities” in these countries and intent on overcoming “deep cultural prejudices against people with different sexual orientation.” Surely civil society in the former Communist world has troubles enough of its own without being dragged into America’s sexual wars.

I have gone on about Soros both because he is throwing around enormous sums of money and because he could, like the Ford Foundation of the 1960’s, become a pacesetter for his peers. He is 25 years your senior, has begun to devote much of his energy to philanthropy, and has plainly chosen to do it himself rather than leaving it to others—or leaving it behind. But is he doing more good than ill? That is a real question.

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Which brings me back to you. Although we have never met, I believe I know enough about you to think you appreciate the conditions that have allowed you to accomplish what you have accomplished. (“I’m rooting for Hong Kong,” you wrote after a recent visit to China.) Without a free society, a liberal culture, a dynamic economy, a stable polity, the steadying rule of law, a meritocratic social structure, a sturdy civil society, a not-too-meddlesome government, and a nation mostly at peace, wealth like yours simply does not come into being. And yet, if the history I have recounted is any guide, the chances are strong that, understand all this though you may, your fortune could well end up like other fortunes before it: squandered, or misspent.

To be frank about it, the start you have already made in philanthropy is not exactly encouraging. Besides writing checks to Harvard, Stanford, the United Way, and various population-planning outfits, you have made some distressing moves. “The Road Ahead” technology-training program you have established seems unobjectionable enough, but selecting an arm of the nation’s largest teachers’ union to administer it was either misguided or misinformed. The National Education Association (NEA) has stood behind virtually every destructive pedagogical fad of the last 30 years, and has blocked every sensible reform. To put it in terms I am sure you will understand, the damage done by the NEA to American education exceeds anything that the antitrust division of the Justice Department might ever do to Microsoft.

As for your most conspicuous effort to date, a handsome gift of $200 million to help low-income communities obtain electronic hardware, software, and training to bring libraries “into the digital age,” it, admittedly, has the virtue of being safe—a lot safer than propping up the education establishment or meddling in sexual politics in Eastern Europe. Who can be against libraries? Moreover, you are promoting something you know well and care a great deal about: computer technology and Internet access for everyman.

But libraries in the end are mainly mirrors of our culture and society, not shapers of it, and this is a moment for shaping—or rather reshaping. Think of philanthropy as you conceived of the software business: as a place that needs infusions of vision and fresh ideas as well as capital and hard work. If you seek immortality via good deeds, you could earn it by creating new institutions in fields that need them, and, crucially, by making sure these institutions embody healthy rather than destructive values.

Andrew Carnegie and John D. Rockefeller, for example, both started universities. Today we could use some new ones that would stand as rebukes to the warrens of petty specialization and even pettier political correctness that too many established universities have become. They would not have the prestige of a Harvard or a Stanford at the outset, and you could not be certain they would not eventually go off the tracks. But that risk might be mitigated by devising internal structures different from the present arrangements—where is it written that the faculty must be in charge?—or by limiting what they could spend your money to do.

But institutions need not be big—or new—to make a difference. There are lots of little ones around that are already doing sound work, and there would be still more if you were to help lower the entry barriers. Many are faith-based social-service or educational organizations that care for the ill, feed the hungry, wean the addicted, and teach the young. Some participate in the United Way, which is already a recipient of your largesse; but many do not. Mainstream foundations often shun these islets of civil society, precisely because they stress responsibilities rather than rights, because they teach traditional moral and religious lessons, or because they insist their clients behave properly. Such start-from-scratch “alternative” institutions deserve your attention. Not only do they accomplish much with slender overhead, but they are also most apt to embody the core values of a liberal society.

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If you were truly ambitious, though, I have still another suggestion, again drawn from the field I happen to know best—education—but tailor-made for your enterprising spirit.

One of the most promising developments in elementary and secondary education is the spread of “charter schools”: independent public schools, founded by parents, teachers, community organizations, and even by firms operating for profit. Breaking free of the bureaucratic monopoly, these schools follow their own curricular and organizational stars. They are still public schools—open to all, supported with tax dollars, and accountable for their results to whatever public authority issues their charter. The difference is this: if they do not deliver the results they promise, they do not survive. Nobody is forced to attend them. Like anybody else in the marketplace, including a behemoth like Microsoft, they must attract and retain customers.

The U.S. has about 750 charter schools today, up from 500 a year ago. Especially for low-income and minority youngsters, they are starting to provide a stunning alternative to the wretched offerings of our public-school “systems.” But charter schools have a big problem. Their political enemies—teachers’ unions, in particular the NEA, school-board associations, superintendents, education colleges, and the rest—have contrived to deny them capital funding. They get operating dollars (supposedly equivalent to what regular public schools get, though in reality often less), but no money for buildings, for technology, or even for desks and chairs. That lack of capital, together with politically-inspired ceilings on the number of charters that can be granted, is the principal barrier to the establishment of hundreds of additional schools.

Charter schools are what Walter Annenberg should have invested in, but did not. Suppose you took it upon yourself to seize his missed opportunity. Suppose you agreed to invest, say, $2 million in each of the 2,250 additional charter schools that will be needed to reach the Clinton administration’s goal of 3,000 such schools by the year 2000. The money would go to capital costs—bricks and mortar, computer networks, encyclopedias, swings, furniture, and so on. The bill would come to $4.5 billion, barely a tenth of your present fortune.

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But charter schools are not the point. I offer them in the same spirit in which I offer the example of new universities, or support for faith-based social-service agencies: as an illustration of how you could, if you had a mind to, create promising alternative institutions in a country where, thanks in some measure to misguided philanthropy, a number of the established ones have become baneful to a well-ordered society. Andrew Carnegie built libraries to fill an information void. You could fund institutions to fill a void that is civic and moral.

And so we come full circle to the Ford Foundation’s now-forty-year-old judgment that the “establishment” needed shaking up. Today’s establishment needs shaking-up, too. But the parallel between then and now is deceptive. Many of our major institutions have been profoundly damaged by the radicalism that was enthusiastically subsidized by American philanthropy in the 60’s and 70’s. Today’s great opportunity is, by contrast, to help restore and reinforce the social order on which your own success rests, and, in the bargain, to ensure that tomorrow’s Bill Gates will have the same chance you did.

Sincerely,

Chester E. Finn, Jr.

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P.S. Oh, yes: spend the money yourself. Or, if you must create a foundation, do not let it outlive you by more than a generation. And do not permit it to give a penny to the NEA.

 

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