Waves of millionaires and billionaires are being born every week, it seems, thanks to the Internet, Wall Street and the entertainment industry. This has produced a lot of high living, but also a new generation of philanthropists. In an era when it no longer takes decades at the helm of an industrial empire to amass a major fortune, private foundations are being created by Microsoft chairman Bill Gates and the like to rival the great charities of John D. Rockefeller and Andrew Carnegie. And while religious institutions remain a favorite beneficiary of American giving, garnering 40% of donations, these new philanthropies are being viewed as potential saviors for large segments of society: finding alternatives for a struggling education system, for example, or bailing out cutting-edge arts institutions that government agencies no longer fund.
But are the new wealthy really doing their share? Is society getting what it needs? If there is a "new philanthropy," what can it learn from the "old philanthropy"?
Few people have had Vartan Gregorian's inside view of the big-dollars game of giving--and getting. He has served as a legendary fund-raiser for two establishment bastions: He cajoled $1.3 billion in donations while head of the New York Public Library from 1981 to 1989 and as president of Brown University from 1989 to 1997. For the last two years, however, Gregorian, 65, has been handing out money as president of the Carnegie Corp. He has pushed initiatives in teacher education, international peace--through programs in the former Soviet Union--and cooperative efforts with other foundations.
An Armenian born in Iran and educated as an intellectual historian at Stanford, Gregorian is one of the great twinkle-in-the-eye characters on the American scene. A bit rumpled and forever apologizing for his imperfect English, he belies the popular image of the pinstriped institutional CEO. Yet, his disarming laugh, facility with seven languages and storytelling flair have all helped make him effective.
Philanthropy is a family affair in the Gregorian household. His wife, Clare, whom he met four decades ago at Stanford, is president of Literacy Partners, a nonprofit based in New York. The couple, who live in Manhattan, have three grown sons, two working as journalists, the third as a military historian and advisor to the State Department.
Since his library days, Gregorian has been a familiar face in the highest-profile circles of New York, whether lunching with Brooke Astor or having breakfast with Laurence S. Rockefeller to talk about ways to foster dialogue among the races. But Gregorian is equally at home bantering with waiters at a hotel near Carnegie's Madison Avenue headquarters, where he sat down recently over a glass of merlot for a conversation that ranged from the new Silicon Valley billionaires to Hollywood celebrities--and how the latter, in particular, seem reluctant to part with their money.
Question: Is there a new philanthropy different from the old philanthropy?
Answer: Alexis de Tocqueville, in his "Democracy in America," pinpointed something important: that is, volunteerism in America as being completely distinct from Europe and elsewhere. America has made ways of participating in governance, in society, from the PTA to various societies. Then you have philanthropy. He also described a new individualism in America, but his definition and the current one are entirely different. His included a social component. An individual is not only doing what is good for himself, for his gratification, but something that will benefit society in the long run. And the third quality, of course, is the religious impulse. The combination of these three is very American. In that sense, the new philanthropy is the old philanthropy.
Q: But these waves of new billionaires have hardly had time to embrace Carnegie's credo, "Anyone who dies rich, dies disgraced."
A: In 1995, the U.S. had 149 billionaires. There are 42,000 active American foundations, with combined assets of $200 billion. These foundations give $10 billion annually. But the figure that blows my mind is how we're expecting an intergenerational transfer of wealth--of some $2.2 trillion by the year 2010. Some $250 billion a year will be inherited over the next 40 years.
The issue is, how much of this will percolate or go into philanthropy? And in what forms? That's the key issue: They don't know whether to take the past practice as the role model for this. And there are no easy answers.
I'm on Bill Gates' board [of the Gates Learning Foundation]. The latest sums he's given brings it to $11 billion, his foundation, which makes it one of the four or five biggest in the country. At his age. No one has done that in our history. And there are many people in Silicon Valley who can be future Carnegies, Rockefellers and so forth. What are they going to spend it on?
My worry is that traditional institutions--universities, associations, churches--that are used to exclusivity with some donors may lose that. Because more and more young men and women are interested in 10, 12 different causes instead of one or two. Ironically, the more you make people socially responsible, the more fragmented philanthropy is going to be. Because you may believe in environmental causes, you might support the Nature Conservancy rather than the Metropolitan Opera.
The one cause that remains constant with many people, other than religion, is the university alma mater. People don't wear on their cars any religious sign, but they wear their university's.
Q: Yet, lower education, the K-12 system, seems to be a favorite cause, with everyone from the Annenberg to the Milken Family foundations offering up programs to fix the schools.
A: Yes, all the polls indicate that education is the No. 1 concern of Americans. So it's normal that philanthropists, when they look where to put money, consider education the most needed. There's not a major outstanding rich person in New York who's not doing something for education: arts education, or school computers, or principal for a day and so forth. But is this intended as problem-solving or an investment?
Universities are seen as investments. The idea of supporting an institution for 250 years has become an accepted thing. But [with K-12], businessmen are impatient if you cannot solve a problem in two or three or four years, because they are used to quarterly reports. Then they become either disillusioned or angry or they discontinue it.
The university is considered to be a private charity. The other is a public institution to be fixed. But the decline in education has been over 20, 30 years, and there are no silver bullets. Whatever you do, you must stay with it. But nobody wants to say, "I am staying with this no matter what, next 15, 20 years," because each one would like to show some progress, some solution. That's what worries me about this modern trend.
Carnegie did not believe in charity. He wanted to help people help themselves, the whole social Darwinistic concept of providing ladders for people to climb in life toward respectability, toward enlightenment and so forth. Instead of giving fish, give a fishing rod.
But the religious impulse is to put more in charity. Most Americans confuse the difference between charity and philanthropy. Charity is given out of pity and sympathy. Philanthropy, as it has evolved in America, is an investment in something enduring. You have a great deal of confusion among young generations over which is the right thing to do.
Q: Still, the public gets excited when it reads some rich guys are offering to help thousands of poor students go to private schools.
A: You know why? We've come to believe that public money is not real money. Only private money is real money. That has absolutely surprised me. In the '60s, the left said "Don't trust the public." In the '70s, the right said, "Don't trust the establishment." Together, don't trust government, the waste, etc. So the result is, the public unconsciously sees all the solutions in the private sector. But they don't see the magnitude of the problem.
Take vouchers. There are 44 million kids in the United States in kindergarten through high school. How many vouchers are there? 100,000? 400,000?
People seek individual salvation, not salvation of systems. It sounds great, but the magnitude of the issue is, we cannot afford to witness a mediocre public school system. We cannot allow some salvation and others oblivion.
Q: Speaking of Michael Milken, it's interesting what the old robber barons have done to their family names through philanthropy--they are now associated with good deeds. Yet, today, we're skeptical about a Milken, suspicious he's trying to buy our forgiveness.
A: I don't care about the motives. Because, frankly, if you're helping a hungry person to eat, that person doesn't care about your motives.
If you read Machiavelli's "The Prince," he said action is important, not what prompted action. Someone acts like a good Christian, whether he believes in Christianity or not, to Machiavelli. We should encourage that tendency.
What motivates people is very hard to say: a sense of pity, a sense of enlightened self-interest, a sense of future generations, a sense of noblesse oblige, a sense of peer pressure, a sense of your role models from the past or currently, a sense of class--that unless you've done certain things you've not fully accomplished your role in society. It's very complex, and I've seen them all. I always pay attention to the results of what they've done.
Q: Carnegie put money into everything from libraries to Carnegie Hall. Why is giving for the arts not as plentiful now?
A: It's hard to generalize. In New York, every time I go to hear music, the ballet, I say, "Thank God, these people are still giving." As long as there is a great philanthropic Jewish community and a WASP establishment they support it even if they don't believe in it. Because it's the right thing to do. The issue is, who will be replacing the current generation of donors for the arts?
Arts usually have been controversial. Not classical arts, but contemporary arts. So maybe there's a decline there. Basically I'm not worried about major traditional institutions for the arts, but new budding ones.
Q: We hear all the time about who gives. Which groups don't?
A: I have thought about this a lot. They don't have to give. The fact is, some of them don't think they should. Franklin Roosevelt said, "To whom much is given, much is expected," in terms of giving one's time, one's intellect, one's fortune. An entire generation of America's elite was brought up in that tradition. It was part of being of the establishment, the governing class. No matter how you made your wealth, once you were there, it was expected, whether you liked it or not.
Now the establishment is no longer what it used to be. There are multiple establishments. Class is not what it used to be. Now, if you're rich, sooner or later you can be invited to the most exclusive party, because [someone] will say, "We need from George some money, why don't we invite him to our home?" Now there's a faster route to become accepted in society. We've entered the culture of celebrity rather than the culture of the kind of cultivated traditional wealth making its way and setting standards.
The other thing is, now at age 22, 24, 25 it's easy to become a millionaire. And then they're not used to it: "I'm too young. My models, Andrew Carnegie and the Rockefellers and Morgan and so forth, all of them give at the end of their life. When I get old, I'll give it."
Some have the Depression mentality: I've made it, but how do I know it is going to last? It may be a fluke.
Then there's a third party, saying give it while you're alive and enjoy the consequences, like Aaron Diamond [who founded a pioneering AIDS research clinic at New York University]. Don't even give an endowment, spend it out and enjoy the consequences. So there are all these models competing.
Q: You mentioned we're a celebrity culture. Yet, celebrities often lend their names to causes. . .
A: . . . but themselves are not givers. That worries me. In Los Angeles, I'd like you to name me one actor, other than Paul Newman--who's not in Los Angeles--one other actor or actress whose entire holdings have gone to philanthropy. You cannot find many. [Steven] Spielberg is a giver. . . . But actors.
California has not set the norm yet. Silicon Valley has not done it yet, though some of the major founders of Silicon Valley have--Hewlett and Packard.
Q: Yet, there is a social stigma to being seen as selfish.
A: Yes. Look at how they criticized Vice President [Al] Gore for [how little] he'd given. Now, when you run for public office, they like to see the charity. You cannot run and say, "I have never given." It will end your career.
I have seen people who do not want to be parting with their money, but the pressure allowed them.
Q: You won't preclude higher motives?
A: America is the place of perpetual hope and accomplishment. Everybody wants the right to be a good ancestor. Wealth represents power, longevity, immortality. One of the things I always said at the library was that cemeteries do not provide immortality. Neither do buildings. Only libraries and museums. They're the only living institutions that represent the DNA of our civilization.
I did not mention universities. Because at the time I was not a university president.*
"There are many people in Silicon Valley who can future Carnegies, Rockefellers and so forth. What are they going to spend it on?"
"We've come to believe that public money is not real money. . .The public unconsciously sees all the solutions in the private sector."
"I don't care about the motives. Because, frankly, if you're helping a hungry person to eat, that person doesn't care about your motives."