Foundation in Newport Beach Gives Quietly : Grants: Steele group, which is giving Pacific Symphony $200,000, is a steady and important player in local philanthropy.

When the Pacific Symphony announced a recent $200,000 grant from the Harry and Grace Steele Foundation--the largest in the orchestra’s history--the group’s executive director was understandably excited.

The size of the grant, said Louis G. Spisto, “helps us better plan for the future.” But equally important, he said, was the fact that a Steele Foundation grant “certainly is a seal of approval” for any arts organization in Orange County and was certain to have a spillover effect with other donors.

“It’s going to be a key factor in our adding major gifts to the sustaining fund,” Spisto said. “It’s exceptional to have this kind of philanthropy in your own community.”

The Newport Beach-based foundation is not the county’s biggest: The Irvine-based Arnold and Mabel Beckman Foundation, which makes grants mainly in the science, medicine and technology area, is many times its size. Nor is the Steele foundation known for its daring and innovative grants. It is determinedly local, keeping most of its money close to home.

But while names such as Segerstrom, Irvine and Fluor may be more familiar, the small, publicity-shy Steele Foundation has become a steady and important player in local philanthropy. For nearly four decades, it has steadily pumped money into the arts in and around Orange County, into higher education throughout California and into population planning across the country. In all, the foundation has made grants of nearly $70 million since it was founded in 1953.

In the past seven years alone, the family foundation has donated nearly $11 million to local arts organizations, ranging from $5,000 to the Orange County Chamber Orchestra to $4.5 million to the Orange County Performing Arts Center, including $602,000 in 1989 to offset the costs of presenting the New York City Opera. Two weeks ago, the Steele Foundation announced a grant of $500,000 to the Center, primarily to underwrite upcoming performances of “Girl of the Golden West,” a joint venture between the Center and the Los Angeles Opera Co., featuring Placido Domingo and Gwyneth Jones. The remainder of the money will go to support the Center’s 1991-92 ballet season.

More than $1 million each has gone to Huntington Beach-based KOCE-TV and to the Newport Harbor Art Museum. Recent Steele grants to Los Angeles arts and entertainment organizations include $750,000 to KCET-TV; $550,000 to the Natural History Museum, and $70,000 to the Music Center. Outside California, grants have gone as far afield as Colonial Williamsburg in Virginia and the Mystic Seaport Museum in Connecticut.

Still, for all its largess, the Steele Foundation might just as easily be called the Stealth Foundation. The only county institution bearing the family name is a sailing and rowing loft at Orange Coast College in Costa Mesa, reflecting the family’s longstanding interest in sailing. Nationally, few philanthropy publications contacted even had heard of the Steeles.

“We don’t like our names in the paper,” said Audrey Steele Burnand, the foundation’s president. “There are plenty of people who like that. In Orange County, if you don’t get your name in the paper, you aren’t anybody.”

“We like to stay out of the spotlight,” agreed her brother, Richard Steele, who worked for the family business and serves as the foundation’s vice president and chief financial officer.

Nonetheless, at the request of The Times, Steele, Audrey Burnand and her husband, A. A. Burnand III, the board’s secretary, agreed to discuss the foundation’s history and operation, providing a rare look at how a mid-sized, private family foundation operates.

The Steele fortune originated in the 1920s when Ohio native Harry Steele bought a Los Angeles machine shop, a company that became U.S. Electrical Motors Inc. Steele died in 1943, but the company continued to grow, fueled in part by the use of its engines in deep wells used to irrigate the San Joaquin Valley.

The foundation was established in 1953 by Grace Steele, Harry’s widow, and their children, including Audrey and Richard, mostly with closely held company stock. In 1962, U.S. Electrical Motors was acquired by Emerson Electric for about $50 million in Emerson stock, which remains the bulk of the foundation’s holdings. Grace Steele died in 1974.

From time to time over the past decade, the foundation has dipped into its principal to make grants, but the increasing percentage of its assets used for grants was partially offset by the steady rise in the stock market during the 1980s.

In general, the largest categories of gifts from the foundation are higher education, medical and scientific research, followed by the arts and significant grants to such population planning groups as Planned Parenthood.

The Foundation operates out of three sparsely furnished rooms in a low-rise office building in Newport Beach with a single paid employee, Marie F. Kowert, who serves as the board’s assistant secretary. The board of directors consists of three surviving Steele children and their spouses, none of whom receives compensation. Most are in their 70s and all are Orange County residents.

For the fiscal year ending Oct. 31, 1990, foundation grants totaled just over $5 million, and the foundation had operating expenses of $182,000, according to information filed with the Internal Revenue Service. Overhead is kept low, Audrey Burnand said, “basically because we’d rather see the funds go where they can help.”

The Steeles’ frugality also is reflected in its application procedures. As the statement of purpose declares: “Because the Foundation feels that application materials should be kept to a minimum to avoid wasting charitable funds, the Foundation discourages elaborate and expensive presentations.

“There is no formal application form. One copy of a concise letter, together with supporting documents, over the signature of an officer is sufficient.” There is no deadline and no interview, unless one is requested by the board.

Proposals go to the screening committee, which consists of two people: Kowert and trustee A. A. Burnand. “Probably the main reason I’m not on it,” explained Audrey Burnand, “is that I’m a sucker for too many things.”

A. A. Burnand said the foundation receives “a monumental” number of requests. The stack, he said, can approach a foot in height.

“The first thing we do is throw out 99% of those from out of state,” he said. “We try to limit it to Southern California. . . . The main emphasis is on Orange County”--though, in addition to the proposals presented by the screening committee, Audrey Burnand said, “we individually bring in things we’re interested in,” often proposals from outside of California.

About 15 to 20 proposals are presented to the full board four times a year in the foundation’s main office, which is lined with sailing and marine memorabilia. The board often is joined by legal counsel and a financial adviser.

“The most interesting thing about this board is that we pretty much agree on the types of things, the amounts,” said Audrey Burnand. The afternoon-long meetings are very informal, she said, and “there’s very seldom a battle.”

Overall, she continued, board members consider their parents in making grants.

“We’re guided by their sense of values, a desire to give back to the community,” she said, and “a sense of caring about others.”

Richard Steele said his sister, Virginia Steele Scott, who died in 1975, “was probably more instrumental than anybody in aiming the foundation at the arts.” Scott, who lived in Pasadena, was a major patron of the Pasadena Art Museum (now the Norton Simon Museum) and, through the Virginia Steele Scott Foundation, of the Huntington Library in San Marino where the Virginia Steele Scott Gallery of American Art is located. (The smaller Scott Foundation supports a variety of arts organizations in the Pasadena area in much the same way as the Steele Foundation in Orange County, although the Steele Foundation continues to make some arts grants in Pasadena.)

Steele grants often are in the form of challenge or matching grants, reflecting the trustees’ philosophy. “It’s very encouraging to people to be able to match the grant,” Audrey Burnand said.

Burnand explained that foundation trustees have learned by experience that challenge grants expand the ongoing donor base for institutions, creating a broad foundation of support that will remain when big grants no longer are available. In fact, she said, more and more grant requests to the foundation specifically ask for matching grants.

Although three of the family members have a particular interest in the visual arts, according to Audrey Burnand, the trustees seem to have a civic, rather than an aesthetic agenda in their arts philanthropy: they give where they live. Countywide organizations are preferred, but arts and community institutions in Laguna Beach--home of Barbara Steele Williams and her husband, Nick B. Williams Sr., the retired editor of the Los Angeles Times--are especially favored. The new main library in Newport Beach, where other trustees live, recently received a $500,000 matching grant.

Although large Steele grants most often get publicity, Audrey Burnand said, “emotionally, we tend to support the small guys. We like to help them. We love to do ‘little grants,’ as we call them,” smaller grants that “other foundations wouldn’t be bothered with, where people are really making an effort and using every penny they get.”

These include $8,000 for a van for a workshop for the handicapped in Montclair; $12,000 for a reading machine for a blind staff worker at a Santa Ana center for poor and at-risk families and $10,000 to Cal State Fullerton for scholarships for older citizens.

Once a proposal is accepted by the board, Richard Steele said, “more often than not we increase the amount that they’ve asked for, rather than decrease it.”

Ideologically, the Steele Foundation appears to have an eclectic side. It is involved in conservation groups and the normal range of such do-good organizations as the Boy Scouts and Girl Scouts and the Big Brother/Big Sisters of Orange County. It also has been a small but steady contributor to service organizations for the military, including the USO, and to California memorials to the Korean and Vietnam wars.

It made a major donation ($1 million) to the Statue of Liberty restoration and a smaller one ($25,000) in support of the U.S. Olympic Committee. But next to the arts and higher education, the largest category of giving since the early 1980s--$8.5 million--has been population planning and abortion-rights groups.

“Overpopulation and poor family planning” are, said Richard Steele, “the root of all evil.”

“We’re all in agreement” on the issue, said Audrey Burnand.

“The interest (in population planning) has been developed within ourselves over quite a few years,” Steele said.

Large grants have been made in Orange, Los Angeles, San Diego and Riverside counties as well as in New York and Washington, D.C. Some recipients, such as Planned Parenthood groups and the National Abortion Rights Action Legal (NARAL), are well-known. Others, such as International Projects Assistance Services of Carrboro, N.C., which has received $3.6 million, are more obscure.

Steele is the largest single donor to IPAS, according to Katie McLaurin, IPAS’ executive director. The organization focuses on treating complications from unsafe abortions in the developing world, and follow-up contraceptive counseling. Faye Wattleton, national president of Planned Parenthood Federation of America, describes the Steele Foundation as “quite saintly,” an organization that “represents the best of all worlds” by supporting the organization on both the local and national levels; by doing so in “a very consistent and longstanding” fashion, and by not hamstringing the grants with too many restrictions.

At the same time that the Steele Foundation has been supporting population planning, it also has made a number of much smaller grants to groups generally identified with the anti-abortion rights camp, including the Inter-Varsity Christian Fellowship ($25,000) and the Florence Crittenden Services ($50,000).

The Steele Foundation also contributed $30,000 to the Pacific Legal Foundation of Sacramento, a conservative public interest law firm that is usually allied with abortion-rights opponents, although it does not litigate abortion cases, according to a spokesman.

Outside of Orange County arts organizations, most of the $47.7 million the Steele Foundation has granted in the last decade has gone to higher education ($17.4 million) and medical and scientific research ($3 million).

Some of these have been made to institutions in the county: $1 million to Chapman College for a matching scholarship endowment; $1.75 million to Hoag Hospital for cancer and cardiology programs; $250,000 to UC Irvine for capital improvements and $600,000 to UCI’s Beckman Laser Institute; $375,000 to Orange Coast College for theater renovation, and $10,000 to Cal State Fullerton for scholarships for older citizens.

In higher education, however, giving largely reflects the ties of Steele family members and trustees. Occidental College in Eagle Rock, supported by Harry and Grace Steele during their lifetimes, has received $1 million. The family home, in nearby Pasadena, was donated to Caltech. Other than that, “we try to keep it pretty much to the schools we went to,” said foundation vice chairman Richard Steele.

Thus the chief beneficiaries have been the half dozen colleges clustered in and around Claremont: Pomona (Richard Steele), Scripps (Audrey Steele Burnand), Claremont McKenna, Claremont University Center, Harvey Mudd and Pitzer, which together have received $10 million over the past six years. In addition, Mills College (Barbara Steele Williams) in Oakland has received $3 million for scholarships, and the University of the South (Nick Williams Sr.) in Sewannee, Tenn., received $750,000 for an endowed chair in English. In areas outside higher education, foundation grants also reflect the interests and tastes of trustees. Proposals involving animals, for example, get a good shot, with recipients ranging from the Friends of the Sea Lion in Laguna Beach to the San Diego Zoo. “Some of us are pretty big on animals,” acknowledged Audrey Burnand.

Not surprisingly, the Steele Foundation wins praise for its approach, although there is some criticism that its grants are not especially daring or innovative.

“I have nothing but high regard for them,” said Judith Swayne, executive director of the Orange County Community Foundation. Within the California philanthropic community, she said, “they are highly respected. The feeling is that they are a part of their community. They’re really hands-on. They are not pomp-and-circumstance kind of people.”

On the other hand, said Pablo Eisenberg, president of the Washington, D.C.-based Center for Community Change, “one would like them to give to the arts to support diversity, to community groups, grass-roots and storefront arts to encourage artists--particularly creative artists from disadvantaged populations.”

But “the norm is to support the well-known, the established arts groups,” said Robert O. Bothwell, executive director of the National Committee for Responsive Philanthropy. “Most foundations don’t do anything daring or courageous.”

Actually, he added, these days, the Steeles’ “support for Planned Parenthood would qualify as having a daring streak.”

If there is any valid criticism, said Waldemar Nielsen, author of “The Big Foundations” and “The Golden Donors,” it is that the foundation is also an “example of the rather general, widespread maldistribution of philanthropic money in the United States.

“Wealthy families tend to live in counties like Orange County. It’s a commentary on American life: Them that has, gets.”

Steele Spending Gifts over the past decade (1981-1990), totaling $47.7 million.

Higher Education: 37%

The Arts: 28%

Population Planning and Abortion Rights Groups: 18%

Medical and Scientific Research: 6%

Other Causes: 11% Source: Steele Foundation and IRS