How Private Wealth Can Change the World

Christopher G. Oechsli, President and CEO of The Atlantic Philanthropies, delivered this speech at an international conference held by the Robert Bosch Stiftung in Berlin: The Era of Citizens – How Civil Society and Foundations are Shaping the Future. The conference was opened by German President Joachim Gauck and featured speeches by Nobel Peace Prize laureates Muhammad Yunus and Kailash Satyarthi.

I want first to add my congratulations to the Robert Bosch Stiftung on its 50th anniversary and to celebrate its work of the last half century. This is a magnificent undertaking and the world is better for it.

I want, too, to thank Dr. (Ingrid) Hamm and her colleagues for inviting me to participate with a group of exceptional guests in this very timely and important discussion about the role of philanthropy in today’s complex and difficult world. Finally, I want to thank Robert Bosch personally – I imagine his spirit is in this room – as I would not be here today without his contributions to the Stuttgart motor industry. More on that in a minute.

Today, I want to talk – perhaps a bit presumptively, but I hope not arrogantly – about how private wealth can change the world. I want to share the experience of one man, Chuck Feeney – who Bill Gates and Warren Buffett have referred to as their hero – and one philanthropy, The Atlantic Philanthropies. I want to offer this one example of how we have tried to deploy private wealth most effectively to change the world in specific and tangible ways. More specifically, how we have tried to make lasting changes and bring increased opportunities to those who, through life’s circumstances, are vulnerable or have unfairly been denied opportunities.

I have worked with Chuck, the businesses that he helped to create and the philanthropy over the last nearly 25 years. For many years our giving was anonymous. It still pleases me that many of you will know nothing about us. It has not been in Chuck’s or Atlantic’s character to highlight what we have done. It has been said, in a rare interview Chuck had with Forbes magazine, that Chuck is a “show me not tell me” kind of person. He would prefer that his work and that of Atlantic and its grantees speak for itself.

But we also are a limited life foundation dedicated to investing all of our endowment within the founder’s lifetime – Chuck calls it Giving While Living. We believe that the problems and challenges we face today require attention today. A well-placed stitch in time saves nine. So we have invested over $6.8 billion to date and expect to have committed a total of over $7.5 billion by the time of our last grant in 2016. As part of our mission to encourage giving by other high net worth individuals, we would like to share our experience and reflect on what can be achieved.

Chuck believes that Giving While Living is personally more satisfying than having another yacht or house – and, besides, he notes, it’s more rewarding than giving while dead.

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So what are the problems that require attention today and what has Atlantic done about them? Let me first list a few problems I saw in the last few days that speak to some of the work we have been doing, and I will return at the end to some of what Atlantic has been doing in related areas.

En route to Cape Town for a global health systems conference, I passed through Dakar, Senegal, located on the shoulders of the Ebola pandemic. In Cape Town, the discussions about how to strengthen health systems and the health workforce were at the forefront. One thing was clear: strong health systems and a robust health workforce are essential to healthy communities and nations. What is the role of private wealth, you might ask?

In Johannesburg, a long-time colleague and key leader in our South Africa Human Rights Programme was in palliative care at a local hospice that is struggling to stay open even as our colleague was struggling to have comfort as he battles cancer. On my email from one of our recent U.S. grantees were recent articles from The New York Times and The Wall Street Journal about how we are overlooking palliative care as an answer to patients’ suffering. As our societies age and chronic diseases like cancer and diabetes become more prevalent, what can private money do to affect lasting system changes in palliative care?

Towards the end of my visit I met a man named “Civilized” – I hope he won’t mind me telling his story. How did he get that name, I asked. “My father was part of the anti-apartheid struggle,” he said. “As a result of his known activities, he was thrown from a moving train and was disabled for life. When I was born he named me ‘Civilized’ because that is what he wanted South Africa to become.” How could philanthropy make a difference?

My plane arrived late in Frankfurt. We had to avoid Libyan air space due to the conflict in that country. We know wars are terrible things. What can private wealth do about internecine conflicts and failing states?

On arrival, we all stood in long lines at immigration. After 15 minutes of discussion at the entry desk, the two young men in front of me, apparently of Middle Eastern ethnicity, were taken off to another room. My line was closed and I moved to the back of a longer line. Immigration and national security issues are at the forefront of the concerns of many nations. Is there a role for philanthropy in addressing these complex issues?

So, with that backdrop of seemingly depressing and complex issues of the day, I am privileged to be sharing an opportunity to discuss the role of private foundations with Kathleen Cravero-Kristoffersson who is the President of the Oak Foundation, which was founded by Alan Parker, a business partner of Chuck’s. More on that later. I am also privileged to be able to share our panel discussions with Ruben Vardanian, who I first met through the wife of Chuck Feeney’s biographer, all of whom share a keen interest in higher education. I am looking forward to our discussions.

Allow me first to set the stage. At the risk of stating the obvious: By “private wealth,” we presume we are talking about money and private individuals who have a fair amount of it. And to “change the world,” we mean improving it – improving the human condition and the environments in which we live – through intelligent investment of money.

Now let me acknowledge some important points that I will not elaborate on. I won’t, for example, digress on the valid perspective that good health and happiness are private wealth, too. One need not have large sums of money to have achieved great private wealth, if we measure wealth as well-being.

One need not have large sums of money to change the world, either. We do know, however, that some basic achievement of good health and happiness is hampered by insufficient money, as money is often the currency to fund life’s essentials and to fund desired change. But I won’t elaborate on that today, except to acknowledge that wealth is not just money; and money, by itself at least, is not necessary to achieve desired change in the world.

Second, it is worth recognising that the acts of achieving wealth can and do change the world. That is, the achievement of private monetary wealth as well as its deployment, once accumulated, both have an impact on the world. If the goal is to have a positive impact on the world, we need to acknowledge that how wealth is achieved also has an impact on the world and it can be a positive impact (as well as a negative one). Double and triple bottom line approaches to business – making money while doing good – are the topics of the day in many philanthropy circles.

Innovation and discoveries that have commercial application can improve our individual and collective well-being. The ways in which Robert Bosch, Andrew Carnegie, John D. Rockefeller and Bill Gates each made their respective fortunes changed the world, independent from their subsequent philanthropic investments. Not to mention that we love our Bosch dishwasher. But I won’t address that aspect today either, except perhaps, in passing.

In today’s world, people generally (but not universally) believe that individuals should be able to work for money and be fairly compensated for that work. If great value is created through one’s fair labours and innovation, I suspect most of us would not begrudge them the right to retain some fair amount of the commercial value of those contributions. And we would probably also agree that they have some reasonable scope for deciding how to spend what they’ve earned, especially in the realm of philanthropy.

You note I am being very general here. There is much nuance and many issues associated with the creation and disposition of wealth. There is, for example, increasing debate about the fairness of remuneration; the fairness of incomes; the fairness of labour practices, about which we have heard from our Nobel panellist Kailash Satyarthi; and the fairness of allowing large returns or “rents” on accumulated capital, especially inherited capital. There have been, are, and likely always will be debates about the role of tax and other policies on wealth and whether and how philanthropic investments should be excused from or shaped by taxes and tax policy. Issues of income and wealth inequality are increasingly at the forefront of our public and academic debates. These are very important issues for discussion, but I will not discuss these in any depth, either.

By now you might be thinking that I am avoiding all the difficult issues associated with how private wealth can change the world. So let me jump to what I do want to comment on today: the role private philanthropy can play in catalysing lasting and effective change to improve the human condition.

Can private wealth change the world? In a word, yes.

My own view, however, is that it is often much more difficult to invest private wealth to achieve effective and sustained improvements in society than it is to earn the wealth. And it is this challenge that keeps some wealthy people from engaging in philanthropy at all. It is so much easier to buy another yacht, another home, another trophy. But is that what we are ultimately here for? To accumulate the most toys?

Chuck likes to quote an Irish proverb: a shroud has no pockets. You can’t take it with you. Just ask Tutankhamun.

But how can private wealth make a difference in today’s world? I am reminded of the question: “How does one eat an elephant?” One bite at a time.

The Story of Chuck

So, back to Charles Francis Feeney – who we know as Chuck. His story has been told elsewhere, in a biography written by Conor O’Clery, entitled The Billionaire Who Wasn’t and in a documentary produced by RTE in Ireland called “The Secret Billionaire”. I encourage you to explore both. From the titles of the book and film you might guess that Chuck Feeney has not been an ostentatious, self-absorbed or self-important man. He is not. And this is, perhaps, one simple characteristic that underpins how private wealth can change the world: the person who deploys the private wealth must be interested in others and their condition. He or she must be an observer and have understanding and empathy. They must desire to improve what he or she observes. As Robert Bosch has said, “Anyone who has stopped improving has stopped being good.” Observation, empathy and a desire for improvements are essential traits to effectively deploy private wealth to change the world.

These traits lead to an appreciation of needs. Often, the needs and choices are too numerous for any one wealthy person or foundation to address. So, one of the greatest challenges is to pick what to focus on and gain some understanding about what can be done to address those needs.

As Chuck noted in his letter to the Giving Pledge: “Fundamental to all philanthropic efforts are choices about grantmaking focus and strategy, which naturally are strongly influenced by one’s passions and interests, as well as one’s perception of how best to achieve good value and lasting impact with the intended grant funds.”

What we observe and choose to act on is often rooted in our experience. So let me tell you a bit about Chuck’s experience and that of Atlantic. It will illuminate why Chuck and Atlantic engaged in significant and sustained ways in places like Northern Ireland, Australia and Viet Nam; and why we made our largest grant, a $350 million investment to launch Cornell University’s New York Tech Campus overlooking Manhattan in New York. It will help explain why Atlantic focused on disadvantaged children and youth, ageing, human rights and reconciliation and population health in places with limited resources. It will help explain why we invested over $2.6 billion in facilities at leading and promising education and research institutions – and why we think those sorts of capital investments are one of the ways in which private wealth can most effectively change the world.

Chuck Feeney is an Irish-American. He grew up outside of New York City in a family of modest means. His mother was a nurse who in her daily activities and actions exhibited a caring for others. Her mother had emigrated from County Fermanagh in Northern Ireland. Chuck’s father was an insurance underwriter – a business rooted in taking calculated risks. Chuck joined the U.S. military and was stationed in Japan during the Korean War. He built comradery in the Air Force, lost friends in the violent conflict and was exposed to the language and culture of Japan. As a result of his military service, Chuck was eligible for financial support through the GI Bill – a law providing a range of benefits for veterans – to cover his tuition and living expenses at Cornell University. He chose to study something the University particularly excelled in: hospitality.

Not long after graduation, Chuck started a business – Cars International – selling duty free cars to American troops stationed in Europe. So here is where I thank Robert Bosch and the Stuttgart motor industry because that is where many of the cars came from. The only problem was the cash flow from this business was so strong that the young entrepreneurs didn’t notice they were close to bankruptcy. Here is where Alan Parker came in as the accountant that put the house in order. The business eventually became Duty Free Shoppers (DFS), the world’s largest luxury goods retailer. So I want to thank Robert Bosch and Alan Parker for my being here today.

As its ever-growing profits mounted, Chuck made the decision to donate the entire ownership of DFS and related businesses to a Bermuda foundation. This allowed both anonymity and the legal right to continue to build and operate the subsidiary businesses that were now owned by the Atlantic Foundation.

Each of these experiences informed and shaped Chuck and came to inform what Atlantic has focused on. Chuck’s Irish-American roots; his family’s experience of modest means; his mother’s empathetic nature and work; his father’s ability to evaluate opportunities and assess risk; the opportunity to advance offered through the gift of a scholarship; the experience of the ugliness of conflict; the exploration and understanding of a very different language and culture; the hospitality profession’s pursuit of quality services for others; and the provision of good and effective facilities each wove their way into the tapestry of Chuck’s business and philanthropic choices and set the stage and frame for Atlantic’s subsequent programmes.

Chuck’s business style was (and has always been) entrepreneurial. He spotted undervalued opportunities in business, countries, people and institutions. So – if one’s wealth derives from one’s personal experiences, private philanthropy is probably best rooted in those experiences, values and personal observations. Indeed, in his letter to the Giving Pledge, Chuck went on to say:

While my approach to philanthropy has surely developed and matured through experience, fundamental guides for me have always been the same methods of working and values that served me well in my business career. Key among these, I believe, is the dynamism, vigilance and informed risk taking inherent in entrepreneurial work, together with priority on good relationships and personal engagement. In business, as in philanthropy, I have always sought an independent, strategic edge where potential is often greatest, as well as opportunities that I can understand and to which perhaps I can contribute personally.

Effective deployment of private wealth, then, is often a natural extension of the experience and skills of those who have realised that wealth. It is not a leap into the unknown, though it is a distinctly different challenge.

So how did Chuck and Atlantic come to select the work we do?

In the first 15 years of the foundation’s existence, work was often exploratory, even experimental, and it was anonymous. Grantees were required to pledge secrecy. Chuck continued to travel around the world, using his anonymity as a vehicle to get close to the issues and people he wanted to learn about without the distractions of a reputation.

Much of Chuck and Atlantic’s early work focused on higher education. This was a reflection, in part, of Chuck’s recognition of how his own opportunities in life were expanded by his studies at Cornell University. The first Atlantic grant, in fact, was for scholarship funds to Cornell students engaged in work programmes of social significance. Many of those students will recount today how that experience set them on a path to socially oriented work.

Atlantic’s work in higher education culminated at the end of the century with a series of investments in the Republic of Ireland and Northern Ireland that focused on enhancing capital infrastructure and research capabilities. Challenges were made to the Irish government to co-invest in a knowledge economy – and these investments, totalling in the hundreds of millions of dollars, coincided with the rise of the Celtic Tiger. Even as Ireland, and indeed much of the world, has faced economic retrenchment, these investments continue to build and sustain Ireland’s human capital and prospects for a knowledge economy for the long run.

In Viet Nam, a country suffering from the legacy of war, Chuck and Atlantic saw an opportunity to give back in higher education by building learning resource centres at several key universities. Capital and training programmes, totalling approximately $80 million, at these universities underpinned an effort to shift higher education to student-initiated learning, an approach that is now well established almost 15 years after the first learning resource centre investment. Atlantic also provided lead funding for the first foreign-owned university in Viet Nam, thereby stimulating further reforms in the higher education sector.

On another front, as Chuck became more familiar with the Irish landscape, he was struck by the seeming endless and intractable sectarian conflict in his mother’s ancestral home in Northern Ireland. He became personally engaged, contributing to the talks that led to the Good Friday Agreements. Atlantic followed with grants in Northern Ireland for reconciliation and the advancement of rights for disadvantaged communities. More recent efforts have been directed at cementing the peace by addressing underlying inequalities in education and public services.

In the late 1990s, as Atlantic sold many of its key businesses, the liquid endowment grew to over $4 billion. The New York Times announced the identity of the mysterious Chuck Feeney as a result of litigation arising from the sale of Atlantic’s interest in Duty Free Shops. Chuck and the Board made a decision to invest the entire endowment within Chuck’s lifetime and set the target date of 2016 for completion of all grantmaking. Our then Board Chair, Frank Rhodes, paraphrasing Samuel Johnson, noted: “There’s nothing like an imminent hanging to focus the mind.”

So focus we did. To ensure focus and effectiveness, the Board adopted four programme areas, each underpinned by theories of change and specific objectives. These themes were drawn in great part from the key themes in which Chuck and Atlantic had developed some experience. As importantly, the programmatic selections were driven by the prospect of some distinct impact that could be achieved in a limited timeframe. Atlantic also retained space and resources to support Chuck’s entrepreneurial instincts. The bulk of these investments has been oriented towards capital facilities at promising and effective educational and research institutions.

Following in Chuck’s footprints in education, health care and reconciliation, Atlantic developed focused programmes in these areas, and teams were assigned to consider where best to focus within these areas. Instructions were issued to focus on root causes and avoid “global creep.” Aware of Chuck’s international entrepreneurial instincts, the Board encouraged staff to focus within those countries in which Atlantic already had some presence: the U.S., the Republic of Ireland, Northern Ireland, Viet Nam, Australia and South Africa.

The teams went to work to bring strategic plans and specific objectives to the Board for review.

I’d like to give you one example of that process because it resonates strongly today as we face the challenges of Ebola:

In 1994 Laurie Garrett wrote a book entitled The Coming Plague. It foresaw the threats of contagious diseases in an increasingly connected world. As we explored strategic prospects for investments in health, this book pointed us in the direction of building community-based primary care systems, with an emphasis on the health workforce that would be most suited to delivering that care, even as diseases and health conditions changed, especially in low-resourced areas. This resulted in:

• More than $250 million of investments to help Viet Nam create a more equitable primary care health system and instil a culture of public health. We worked at all levels to fund access to a continuum of care —from the rebuilding of more than 700 community clinics in eight provinces and 12 urban hospitals to investing in training for health professionals, and creating or strengthening national centres of excellence, including a public health school that has become its leading teaching and training institution. At each step, we partnered with government.
• In an early visit to Viet Nam, we called the deans of all of the nation’s public health schools together and asked what the biggest public health issue was. The answer was a surprise: traffic injuries, they said. Entire families were riding on a single motorcycle in crowded urban areas and poor rural roads with no traffic guidelines. Injuries, particularly head injuries, were leading to death and disabilities for subsistence level families.
  So, in conjunction with a range of grantees, we funded a range of interventions from public education campaigns, tropical helmet design and production, and advocacy for government traffic safety requirements, including helmet requirements.
• In South Africa we invested in facilities and faculty at key schools of public health and nursing institutions. We learned that one of the reasons for dysfunctional community health services and the low morale and retention of the health care workforce was poor health system management. We invested in training effective health care managers.

These were not sexy investments. They were investments in people and systems infrastructure – the things that make services work.

Over 22 years, Atlantic invested $350 million in the region to advance and uphold justice, promote better health care and improve health, and deliver services that support transformative social change, improve human rights and dignity, and fulfil the promise of the world’s most progressive democratic Constitution.

In addition to being in seven countries from among five programmes, we’ve applied a range of approaches in our grantmaking:

• We have made large capital investments, over $2.6 billion dollars. We soon will publish a book that captures some of these initiatives and records their impact
• We have used strategic litigation, including lawsuits that have ended the juvenile death penalty in the U.S. and required the South African government to invest one billion rand in under-resourced schools serving black Africans in the Eastern Cape
• We have actively used advocacy, including:
  • leading funding for support of the Affordable Care Act or Obamacare, a major first step towards expansion of health care in the U.S.
  • supporting the Treatment Action Campaign in South Africa to challenge the Mbeki government’s HIV-AIDS denialism and bring antiretroviral treatment to millions
• We recognise the importance of core operating support for organisations like Encore – which, as part of our (U.S.) Ageing Programme, is dedicated to promoting encore or second careers for elders who have much to offer by way of mentoring and leading socially beneficial causes
• We partner with government, even as we hold them to account
  • In Northern Ireland, where Atlantic has invested nearly £25 million for shared education, dementia care and early childhood learning; with £33 million being funded by the Northern Ireland Executive.

There are more stories about our grantmaking on our website. We hope in our final years to synthesise this experience and share it with audiences who may wish to know more about how we selected and did our work, what was effective and where we failed or did not meet our expectations. In the end, we hope that high net worth individuals, in the U.S., in Germany, in South Africa – wherever they may hear about Chuck and Atlantic – will see something that motivates them to act, and act soon.

Let me close with another quote from Chuck’s letter to Bill and Melinda Gates and Warren Buffett in support of the Giving Pledge:

I cannot think of a more personally rewarding and appropriate use of wealth than to give while one is living – to personally devote oneself to meaningful efforts to improve the human condition. More importantly, today’s needs are so great and varied that intelligent philanthropic support and positive interventions can have greater value and impact today than if they are delayed when the needs are greater. I urge those who are taking up the Giving Pledge example to invest substantially in philanthropic causes soon and not postpone their giving or personal engagement.

And to echo Kailash Satyarthi’s admonition – particularly to high net worth individuals:

If not now, when; if not you, then who?