Philanthropy – Page 10 – artdiamondblog.com

“The More Sweatshops the Better”

JACQUELINE NOVOGRATZ, a veteran of the Rockefeller Foundation and a former consultant to the World Bank, talks enthusiastically about the development of a company in Africa where some 2,000 women earn, on average, $1.80 a day producing antimalarial bed netting. With the assistance of a $350,000 loan from an American investor, the business started making the nets nearly three years ago and is likely to add 1,000 more jobs within the next year.

”They’re in the process of building a real company town there,” Ms. Novogratz said.

Ms. Novogratz is not an outsourcing executive at a multinational company. Rather, she is the chief executive of the Acumen Fund, a philanthropic start-up based in New York that uses donations to make equity investments and loans in both for-profit and nonprofit companies in impoverished countries. One of the stars of her small portfolio is the bed-netting maker, A to Z Manufacturing, a family-owned company in Tanzania — a country where 80 percent of the population makes less than $2 a day.

. . .

”To put it in the baldest possible terms, the more sweatshops the better,” said William Easterly, professor of economics at New York University and author of ”The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good.” Professor Easterly is not advocating the deliberate creation of workplaces with miserable conditions. ”As you increase the number of factories demanding labor, wages will be driven up,” he said, and eventually such factories will not be sweatshops.

Ms. Novogratz says it can be difficult to tell well-off, philanthropy-minded Westerners that what Africa really needs is more $2-a-day jobs. But when they understand the alternatives, she said, such concerns tend to melt away. Before they found work at the netting factory in Tanzania, for example, many of the women were street vendors or domestic workers and earned less than $1 a day. A to Z’s wages place the women in Tanzania’s top quartile of earners, Ms. Novogratz said.

For the full commentary, see:

DANIEL GROSS. "ECONOMIC VIEW; Fighting Poverty With $2-a-Day Jobs." The New York Times Section 3, (Sunday, July 16, 2006): 4.

Entrepreneurial Archaeology

In the "Dig for a Day" program, participants pay $25.00 to spend three hours helping to excavate a Tel Maresha cave. Source of the image: the online version of the NYT article cited below.

While most archaeological excavations require hundreds of thousands of dollars, Mr. Alpert said, this one is unusual because it is self-supporting. “We have the people working and paying for the work, which has proven itself archaeologically and from a tourism standpoint,” he said. “That’s why we are able to dig for so long.” The Maresha excavation is licensed by the Israeli Antiquities Authority, and reports are submitted each year to evaluate its scientific contribution.

“This is the ultimate chutzpah,” said Ian Stern, another of the company’s three owners, who has a doctorate in archaeology and emigrated to Israel from New Jersey (the third owner is Asher Afriat, a historian and native Israeli). “We are providing the public with an active educational experience, while they do the work. Their money underwrites the excavation and is used for all the follow-up of putting the pottery together, registering and photographing the finds, and writing the scientific reports.”

For the full story, see:

CAREN OSTEN GERSZBERG. "Family Journeys; Israel; Amateur Archaeologists Get the Dirt on the Past." The New York Times, Section 5 (Sun., July 16, 2006): 11.

Amateur archaeologists excavate a cave. Source of the image: the online version of the NYT article cited above.

Entrepreneurial Philanthropy

Some major donors who want to make a difference during their lives. Source of graphic: online version of WSJ article cited below.

(p. A1) "If we give it away now, we’re going to do a good job with it, instead of leaving it to future generations of foundation folks," says Herbert M. Sandler, 74 years old. He and his wife, Marion, intend to donate the $2 billion they expect from the sale of the California savings and loan Golden West Financial Corp. before "we shuffle off this mortal coil."

The Sandlers’ plan, like Mr. Buffett’s $30 billion gift to the Gates foundation announced last month, exemplifies the changing pattern of U.S. philanthropy — and the (p. A8) Gates organization’s increasing influence over it. The charitable titans of today are unlike many of the old-school business bluebloods who sought to immortalize their names by setting up foundations that parceled out small gifts forever. Instead, some of America’s wealthiest moguls-turned-philanthropists — Eli Broad, Charles Bronfman, Lawrence Ellison, Michael Milken and Sanford Weill, among others — favor spending money faster, while retaining a high degree of control and demanding more accountability from the programs they fund.

. . .

By contrast, some of today’s tycoons increasingly limit the time frame, leaving tomorrow’s magnates to handle tomorrow’s problems. Mr. Bronfman, an heir to the Canadian liquor fortune, says he plans to exhaust the money in his $120 million foundation by 2020. He is spending at a $12 million to $14 million a year clip. "Why should I saddle the next generation with something I’m passionate about?" he says. "Let them have their own passions and do their own things." Mr. Bronfman, 75, believes in narrowly targeted goals — in his case, they include helping pay for young Jews to visit Israel. So far, his organization has had a hand in sending 112,000 people on such trips.

Mr. Milken, a financier who served two years in jail for securities fraud in the 1990s, funds medical research and K-12 education; he founded the Prostate Cancer Foundation in 1993 after being diagnosed with the disease himself. He said the six foundations he and his brother Lowell have established — which have funds of about $350 million — spend an average of 15% of their assets each year. Three of the six have attracted a total of $300 million in gifts from outside donors who, like Mr. Buffett, preferred supporting existing ventures to starting their own.

Mr. Milken said he negotiates with medical centers to make sure gifts go to research and clinical trials rather than overhead. In return, his foundations waive patent rights to any discoveries made as a result of their funding. "You can’t just write checks," he said. "You have to be actively involved. You have to introduce new management, marketing, other types of activities to empower medical research."

Mr. Sandler and his wife, Marion, have no patience for big foundations that spend 5% annually. "They are never going to give it [all] away," he says. Many foundations, he adds, "become bureaucratic."

He and his wife built their Oakland S&L, Golden West, from a small thrift into the nation’s second largest savings and loan by emphasizing lean operations and a laser-like focus on home lending. The couple, who are co-chief executives, recently agreed to sell the company to Wachovia Corp.

The Sandlers have already given heavily to start the Center for Basic Research in Parasitic Diseases at University of California at San Franciso’s medical school. The center focuses on Third World diseases neglected by major drug companies. Along with malaria, the family’s philanthropy has focused on finding treatment for the millions in South America afflicted by Chagas disease, a deadly insect-born ailment. A donor to the Democratic Party, Mr. Sandler has also backed progressive causes, including Human Rights Watch, the American Civil Liberties Union, and Association of Community Organizations for Reform Now, Acorn.

Mr. Sandler patterns his giving after the Gates foundation. He admires the Gates foundation’s program in Zambia, fighting malaria, and hopes to work together to replicate its methods in other countries. Like Mr. Gates, Mr. Sandler is looking for "gaps" in giving that he can fill, such as basic scientific research shunned by most big drug companies. Another interest: fighting asthma, which disproportionately afflicts the poor in inner-city America.

Mr. Sandler says he’s not afraid to take risks with his money, the same way he did in business. And he doesn’t want a foundation that, after his death, would spend frugally just to stay in business, or support causes far from his heart. "One prays that when we are going down the tubes, we will be giving that last million dollars," he says.

For the full story, see:

JOHN HECHINGER and DANIEL GOLDEN. "The Great Giveaway; Like Warren Buffett, a new wave of philanthropists are rushing to spend their money before they die." The Wall Street Journal (Sat., July 8, 2006): A1 & A8.

Source of graphic: online version of the WSJ article cited above.

Buffett and Gates Should Strengthen Foundations of Free-Market

If Warren Buffett is as serious about doing good with his wealth, as he was in becoming wealthy, he would ponder the Wall Street Journal‘s sage editorial page advice:

We can’t think of two people less in need of our two cents than Messrs. Buffett and Gates. But since giving free advice is our business, we’d suggest that they put at least a smidgen of their money back into strengthening the foundations of the free-market system that has allowed them to become so fabulously rich. There’s something to be said for reinvesting in the moral capital of a free society and trying to sustain and export free-enterprise policies.

Capitalism has done very well not just by Mr. Buffett but also by the world’s poor, as several hundred million Chinese and Indians might attest. African nations in particular need property rights and a rule of law as badly as they need vaccines. On that score we were encouraged by a report this week that the Gateses thanked Mr. Buffett for his gift by presenting him with a book from their personal library: Adam Smith’s "The Wealth of Nations."

For the full editorial, see:

"Mr. Buffett’s Gift." The Wall Street Journal (Weds., June 28, 2006): A14.

Free Market Wealth Funds Archaeology

Upper left is retired banker Leon Reinhart. Lower right is Bill Saturno, who’s archeology dig is being funded by Reinhart. Source of photos: online version of WSJ article cited below.

(p. P1) NORTHERN GUATEMALA — Aboard a small helicopter crossing a seemingly endless rainforest, Leon Reinhart is describing our destination, the San Bartolo archaeological site. "We are uncovering the oldest-known Maya murals and the oldest writing anyone has ever found in the Americas," he says.

Mr. Reinhart isn’t an archaeologist. He isn’t an academic. He is a retired banker.

In providing funding for the excavation at San Bartolo, Mr. Reinhart is one of a growing number of bankers, entrepreneurs and philanthropists who are playing a crucial role in archaeology. They are providing millions of dollars to study and preserve the relics of ancient civilizations from Latin America to Italy and Turkey, giving life to projects that would otherwise die.

. . .

(p. P4) Among the other members of the new generation of benefactors is Charles Williams II, himself an archaeologist. He directed the enormous excavation project in Corinth and has supported projects in Sicily and at Gordia in Turkey, where Alexander cut the Gordian knot. Through his foundation, David Packard, son of the Hewlett-Packard founder, financed the work at Zeugma in southwest Turkey that rescued a large number of mosaics just before they were submerged by a new dam. And a foundation created by Artemis Joukowsky, the former chancellor of Brown University, is funding conservation work at the Great Temple of Petra in Jordan.

Mr. Reinhart learned about San Bartolo thanks to the efforts of an investment banker, Lewis S. Ranieri, who pioneered the mortgage-securities market at Salomon Brothers in the 1980s and now is chairman of CA, the information-technology concern formerly known as Computer Associates. Mr. Ranieri created the Foundation for the Advancement of Mesoamerican Studies, or Famsi, devoted to archaeology.

On Famsi’s Web site, Mr. Reinhart read an article about San Bartolo written by Bill Saturno, the young archaeologist who literally stumbled across the ruin in 2001. Entering a tunnel cut by looters, he immediately understood that the paintings were much older than previously discovered Mayan murals with such complicated iconography.

Fascinated by Mr. Saturno’s article, Mr. Reinhart sent him an email. Because the project had received grants from Famsi and the National Geographic Society, Mr. Reinhart assumed it was fully funded; he soon learned that wasn’t the case. Mr. Saturno was borrowing on his personal credit card to keep the work going. Mr. Reinhart agreed to cover most of the needed funds — a sum that has now crossed the $1 million mark. (Among this year’s expenses: $65,000 for stabilizing the murals and $18,700 in food.)

For the full story, see:

G. BRUCE KNECHT. "Culture; The Rich Dig Deep: Archaeology’s New Players; As traditional funds for excavations fall short, wealthy benefactors are bolstering the hunt for antiquities." The Wall Street Journal (Sat., May 13, 2006): P1 & P4.

(Note: ellipses added.)

Co-Founder of Home Depot, Funds Ambitious Georgia Aquarium

Scenes from the Georgia Aquarium. Source of photos: online version of the NYT article cited below.

(p. B1) One of its sensations, . . ., is simply its ambition — look what we have gathered and constructed! The Georgia Aquarium is billed as the world’s largest, and one can’t escape statistics of size and number: over 100,000 fish are displayed in five galleries and 60 habitats in the more than 500,000 square foot building; there is a 6.2 million gallon pool in which 1.8 million pounds of salt and minerals have been dissolved since last October and in which two whale sharks — the world’s largest fish — swim, displaying themselves to visitors through acrylic walls that are two feet thick. A stainless steel "commissary" behind the scenes holds 20,000 pounds of frozen food at minus 20 degrees Fahrenheit.

This aquarium is also somewhat unusual in its origins: it is not created by a municipality, or a society of subscribers like those that founded the earliest public zoos. It is almost completely the creation of a single man, Bernard Marcus, co-founder of the Home Depot, as a "gift" to the people of the city in which his company began. He and his wife, Billi, donated $250 million of the $290 million cost.

. . .

(p. B7) The aquarium has been an overwhelming popular success. Even with admission prices of $22.75 for adults ($17 for children), demand has been so great that the building is often sold out. Tickets come with timed entrances, and 290,000 annual passes, costing almost $60 for adults, were purchased before their sale was stopped in January. A million visitors have come since the opening.

For the full story, see:

EDWARD ROTHSTEIN. "Aquarium Review | The Georgia Aquarium A Hundred Thousand Fish, Behind a Pane 2 Feet Thick." The New York Times (Thurs., March 23, 2006): B1 & B7.

(Note: ellipses added.)

Free Market Philanthropy

Charles Koch. Source of image: online version of WSJ article cited below.

Mr. Koch’s latest crusade to spread the ideas of liberty has been his sponsorship of a twice-yearly conference that gathers together many of the most successful American entrepreneurs, from T. Boone Pickens to former Circuit City CEO Rick Sharp. The objective is to encourage these captains of industry to help fund free-market groups devoted to protecting the fragile infrastructure of liberty. That task seems especially critical given that so many of the global superrich, like George Soros and Warren Buffett, finance institutions that undermine the very system of capitalism that made their success possible. Isn’t this just the usual rich liberal guilt, I ask. "No," he says, "I think they simply haven’t been sufficiently exposed to the ideas of liberty."

For the full commentary, see:

STEPHEN MOORE. "THE WEEKEND INTERVIEW with Charles Koch; Private Enterprise." The Wall Street Journal (Sat., May 6, 2006): A8.

NGOs Throw Money at Poverty, and Then Declare Success

Mark Pendergrast, in his opus on coffee, tells us about Bill Fishbein, a coffee retailer from Rhode Island, who wanted to help small, poor, coffee farmers in Guatemala:

(p. 419) . . . , Fishbein wanted to do something to help. At first, he worked with established nongovernment organizations (NGOs) but soon became disillusioned. Too often, the NGOs simply threw money at communities, then declared projects successful even without long-term improvements. "It amounts to a network to move money around, to pull the heartstrings of donors," he complains.

Source:

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

“If you’re giving while you’re living, you’re knowing where it’s going”

The American Council of Trustees and Alumni has published a short book, “The Intelligent Donor’s Guide to College Giving,” that lays out some basic ground rules for donating to higher education. These include placing clear restrictions on gifts, working with a particular professor (and, if possible, bypassing the development office) and avoiding endowments in perpetuity. As Sir John Templeton wisely said: “If you’re giving while you’re living, you’re knowing where it’s going.”
Obviously, this sort of due diligence does require time and effort on the part of the donor, But if even a few more philanthropists were watching where their funds ended up, college officials would surely monitor their programs more carefully. There have been a few celebrated cases in recent years in which donors have asked for their funds to be returned after discovering that they were misused, and these cases have sent a shudder through the academic community.

For the full commentary, see:
JAMES PIERESON. “Only Encouraging Them.” The Wall Street Journal (Fri., November 18, 2005): W13.

“Sachs Aid Model Has Financed Tyranny”: More on Why Aftrica is Poor

Famine in Niger is no surprise — desert wastes, locusts and decades of Marxist rule keep it second-to-last on the world poverty list. Famine in the fertile climes of southern and eastern Africa, however, seems more shocking. But there’s a common thread: centralized state rule — incompetent at best — marked by corruption and sustained by aid. These are the shackles that keep Africans poor: It would be nice if EU and U.S. trade barriers were removed at trade talks in Hong Kong this week, but exports are a distant notion to the 75% of Africans who live off the land.
Niger is little-blessed by nature, but it has also spent its postcolonial era trying various forms of failed government, with Marxism reigning longest. A quarter of the population — 2.5 million people — faces starvation. Yet more temperate southern and eastern African countries are on the edge of famine, too, with 10 million affected in southern Africa alone. Again, we find the same economic profile: Zimbabwe, Malawi, Zambia, Mozambique, Swaziland and Lesotho all lack economic freedom and property rights; all have economies mismanaged by the state; all depend on aid. All these countries have a history of utopian schemes that failed to produce everlasting manna. State farms, marketing boards, land redistribution, price controls and huge regional tariffs left few incentives or opportunities for subsistence farmers to expand. Despite torrents of aid, these cruel social experiments could not turn sands verdant or prevent the granaries of southern and eastern Africa from rotting.
Ethiopia’s Prime Minister Meles Zenawi believes that allowing Ethiopians to own their land would make them sell out to multinationals. He seems to have overlooked a basic market principle: It demands a willing seller and a willing buyer at an agreed price. If that price is worth selling for, the farmer might have some money to reinvest elsewhere; if that price is worth buying for, the purchaser must have plans to make the land profitable. If there is no sale, owners might have an incentive to invest in their own land and future, having, at last, the collateral of the land on which to get a loan. After decades of socialism, Ethiopia’s agricultural sector — the mainstay of the economy — is less productive per capita than 20 years ago when Band Aid tried to defeat famine. Although 60% of the country is arable, only 10% has been cultivated. Ethiopia is entirely dependent on donations; but instead of grasping reality, Mr. Zenawi, a member of Tony Blair’s “Commission for Africa,” is forcing resettlement on 2.2 million people.
In Zimbabwe, the murderous kleptocrats of Robert Mugabe’s regime deny that land seizure has pushed their rich and fertile country into famine: Some three million people face starvation today.
. . .
African leaders must be pushed to reduce economic intervention, free financial markets, remove bureaucratic obstacles to setting up businesses, establish property rights and enforce contract law. These are the forces that release entrepreneurial energy. But the ruling cliques will do none of these unless forced to do so as a condition of aid. The Sachs aid model has financed tyranny and corruption for 40 years, leaving Africans destitute. The world trade meeting in Hong Kong will hear cries for “Trade Justice” for Africa, representing more protectionism and more state-run, aid-fueled schemes. What we really need is economic freedom and the rule of law at home: We are perfectly capable of improving our own lot if only allowed to do so.

For the full commentary, see:
FRANKLIN CUDJOE. “The Terms of Trade: Africa Needs Freer Markets — and Fewer Tyrants.” The Wall Street Journal (Weds., December 14, 2005): A20.
(Note: ellipses added.)
(Note: The WSJ identifies Mr. Cudjoe as “director of Imani, a policy think tank in Ghana.”)

Rockefeller’s Money Conserved Land

The limestone buttes, granite steppes and near-permanent icecap that make up the urban expanse known as Rockefeller Center constitute the best-known landscape connected to the famous family’s name.
But those 12 acres in Midtown Manhattan are far from the only vista that owes its existence to Rockefeller philanthropy.
Over the last century, five generations of Rockefellers have used the family wealth to reshape the American horizon, creating a magnificent panorama of open spaces and more than 20 national parks from the rocky coast of Maine to the icecapped mountains of Wyoming.
These natural oases are not always linked to the Rockefeller name, but tonight they will be. As part of the yearlong celebration of its 100th anniversary, the National Audubon Society, one of the nation’s largest and oldest conservation organizations, is honoring the family for a record of conservation that matches the society’s century-long existence.
”Cumulatively, no other family in America has made the contribution to conservation that the Rockefeller family has made,” said John Flicker, the society’s president.
The towering Palisades that guard the west bank of the Hudson River were preserved with Rockefeller money. So was Colonial Williamsburg. The family created exquisite miniatures like Greenacre Park, tucked between two buildings on East 51st Street in Manhattan, and it donated 35,000 acres to help form Grand Teton National Park in Wyoming. Part of the family’s Pocantico estate in Westchester County has become a beloved forest preserve, and an educational center known as the Stone Barns.
The Cloisters, Acadia National Park, Forest Hill Park, Greenpeace, the Nature Conservancy — the list of the family’s efforts to conserve and protect the environment goes on and on.
. . .
Many of the family’s most spectacular conservation efforts began with a family camping trip. ”As Father traveled, if he saw things that needed to be done, he took steps and did something about them,” David Rockefeller said.
He recalls accompanying his father to California in the 1920’s to see the giant redwood trees. When the elder Rockefeller found out that the trees were in danger of being clear-cut by a timber company, he helped buy 9,400 acres that he then donated to the state. That grove of ancient redwoods, including one that is more than 2,000 years old, is considered the largest old-growth redwood forest in the world.
. . .
More than 30 members of the Rockefeller family — ranging in age from 17 to 90 — will be honored by the Audubon Society at tonight’s ceremony, each one involved with the environment. Most times, though, the support is low key and the family tries to shun the spotlight.
”The important part for us is not having our name on it,” said Gail O’Neill Caulkins, 52, a fifth-generation Rockefeller who is president of the Greenacre Foundation, which assists in the maintenance of city parks and supports dozens of community gardens, ”it’s seeing that something gets done.”

For the full story, see:
ANTHONY DEPALMA. “Praising Rockefellers for Land They Saved.” The New York Times (Tues., November 15, 2005): A25.
(The online version has a somewhat different title.)