People

Mayor Donor: Michael Bloomberg

Michael Bloomberg is not only known for being the billionaire Republican mayor of New York, reelected in 2005 with a record margin over his opponent (a record for a GOP mayor, beating even the beloved former mayor, Rudolph Giuliani), he’s also the 13th most generous philanthropist in the country, according to BusinessWeek magazine, donating some $528 million in the last five years, alone.The 64-year-old son of a bookkeeper who never earned more than $11,000 per year, Bloomberg, whose fortune from Bloomberg LP financial news company is estimated at $6 billion, gives away millions annually to pet projects typically considered core to the Democratic party: gun control and pro-choice among them. Neither the typical politician nor business mogul, Bloomberg says he plans to become a full-time donor when his myoral term is up, telling CONTRIBUTE he plans to sell his company and create his own foundation. CONTRIBUTE's Editor-in-Chief Marcia Stepanek caught up with Bloomberg at his City Hall office to talk more about his views on philanthropy. First Deputy Mayor Patti Harris, who will lead Bloomberg’s new foundation, also was present. What follows is an edited transcript of that interview. You’re unique in that you are all of these things: a product of Wall Street, a business tycoon, and mayor of the largest city in America, where philanthropy got its start in this country. Yeah, I think there are other cities that also have strong philanthropic traditions — Boston, Chicago, Atlanta, probably L.A. I’m not an expert in any of them other than New York, really, because I’ve lived here all my adult life. Further, you’re a major donor. You’re talking about starting your own foundation. I’ve always believed it’s important to give during your lifetime. I mean, you can’t take the money with you. You should be able to enjoy any difference you can make.Who or what influenced your thinking about charity the most?My earliest recollection of charity, I’ve told this story before, involves my father. We would sit around the dining room table. My mother always made us wait for my father to come home from work. He was a bookkeeper. My sister and I, and my mother, we set the table together as a family — with linen tablecloths and linen napkins. Everything was always just so. (My mother would have killed you if you dared to bring a pot of food to the table from the kitchen.) And then we all cleaned up afterwards, together. We were a strong family. Now keep in mind, my mother, who is 97, has never seen a kitchen she liked. [laughter] The food, itself, wasn’t that big of a deal. Peas were Del Monte out of a can, cooked in the sauce and the water that it came in. [laughter] But we would talk together a lot, and often about philanthropy. I remember that my father had a book, and he would look into this book and see how much other people in the neighborhood would give to charity, and in those days, 50 bucks was a lot of money. My father earned $11,000 in the best year of his life. There were a lot of small charities we’d collect for, the Red Cross and UNICEF. We’d also collect for Israel, with the blue box that you’d take around to collect coins. And my father, I remember he said once that we were to give to the NAACP. I remember asking him why, because we were not African Americans. He said we’d collect because discrimination against one is discrimination against everybody. And I never forgot that. My parents always volunteered at the temple and for the local community centers. Then later, when people I knew on Wall Street were giving to philanthropy, that influenced me, too. Who on Wall Street influenced you the most? My first experience with philanthropy on Wall Street was when I was at Salomon Brothers and Billy Salomon and John Gutfreund, who were running the firm, had a great philanthropic bent. There were actually a number of firms, including Bear Stearns and Goldman Sachs and people like (former Bear Stearns Senior Broker) Sy Lewis, (former Bear Stearns Chairman) Ace Greenberg, (retired Bear Stearns Vice Chairman) John Rosenwald, (former Goldman Sachs Senior Partner) Gus Levy and (retired Citigroup Chairman and CEO) Sandy Weill, all with a great interest in philanthropy.I remember Billy Salomon had me go around and try to get donations from other partners, and I stood up at a UJA dinner and announced a gift of a quarter of a million dollars. It was the biggest amount of money at the time that had ever passed my lips. Today, you buy a table for that much; I’m exaggerating, of course, but not by much. But these individuals really got the investment banking side and the stock brokerage side involved in philanthropy. (Retired Chemical Banking Corp. Chairman and CEO) John McGillicuddy did the same for the commercial banks. He was the first of the commercial bankers who felt an obligation to spend the stockholders’ money on improving where they do business. After him, (former JP Morgan Chase & Co. CEO) Bill Harrison, (retired Chase Manhattan Chairman) Walter Shipley, and (the late) Tom Labrecque also became great philanthropists. And that, historically speaking, was within the last 30 or more years?I came to Wall Street in ‘66, but I don’t think there was much of it before then. I think about that period, and at Salomon Brothers you couldn’t take money out unless it was for charity. I think other firms had funds where you had to give away a certain percentage. How has the climate of giving changed in New York since then? You see how much money you can raise at the Robin Hood Foundation dinner in one night, right? Yes, the Robin Hood Foundation raised $72 million at its dinner in May. I’d have to say that hedge funds are giving a lot now, and that’s a difference. I think there’s a much greater understanding of corporate responsibility in this country as a whole. The “bullpen,” Mayor Bloomberg’s openplan office on the second floor of New York’s historic City Hall building. Bloomberg’s desk, configured with multiple computer terminals, is reminiscent of Wall Street trading floors. And what about some of the so-called New Philanthropists?Some of the new ones, who knows whether they’ll stay? I’ve always argued you can give not only your wealth but also your wisdom and your work. I remember I started a program with Charlie Ravenel. They called him Pug, and Pug Ravenel was a big quarterback at Harvard College. He worked for Donaldson, Lufkin & Jenrette, and I worked for Salomon. Both firms kicked in $5,000 each. This had to be in or about 1970, plus or minus a year or two. We rented a storefront close to Harlem, on the Upper West Side, and founded an after-school program for urban kids. It was a place where kids could come in and get help with their homework. We hired somebody to run the office, and the two of us would work there in the evenings. I think that once a kid becomes engaged in something meaningful, he or she will likely continue and expand their interest in giving back. You’ve been a businessman philanthropist for a long time now; in your 1996 book, Bloomberg by Bloomberg, you devoted a whole chapter to philanthropy. What do you make of all of the fuss now over Bill Gates and Warren Buffett? I used to be critical of Gates for not giving away any money, and then — and I’m very certain that it’s not because of me [laughter] — Gates started to give away money, and he’s done it very thoughtfully. I don’t agree with some of the things he’s done. I would do some things differently. But you’ve got to hand it to Bill and Melinda. They’ve taken it very seriously and both deserve credit for very thoughtfully and seriously giving away an enormous amount of money. In some of the newspapers, I saw that some people were suggesting that philanthropy doesn’t mean anything to Warren. After the Buffett announcement, some people said, Oh, it’s just a way (for Warren) to avoid (paying) taxes or something. You know, come on. I found that offensive. I think Warren has done a lot and sees the Gates Foundation as a way to do more. Buffett, in an interview with Charlie Rose last year, said he would be a “terrible” philanthropist because he is very impatient. He’ll give the money, Buffett says, but he doesn’t want to get intrusive about it. I don’t think there’s any one better way or worse way. I will say it’s sad that sometimes people give away money and lose control, and later on in life they say they’d like to be involved, and they can’t get back in control. You know, people always talk about the Ford Foundation. If Henry Ford saw what the Ford Foundation was doing today, he’d have a heart attack. Well, I don’t know that to be the case. If Henry was born today, or alive today, you don’t know what he’d do. [laughter] Warren didn’t surprise me at all. Of course, Warren has no interest in getting involved in the day-to-day work of doing this. His late wife, Susie, did have an interest, and I used to talk to her a lot about giving away money. Warren wants to run Berkshire Hathaway. This is a good way for him to do it. With my foundation, Patti (Harris) and I want to get more involved than that. We have some ideas about how we want to do that. I don’t know how many people can give away enormous wealth. There just aren’t that many. Look at Robert Wood Johnson. There are some people who do this, and nobody writes about them. Buffett and Gates are just another set of them, and Bloomberg may be just another one of those. I’ve been giving money away for a long time. I never had a foundation. We just sat around and did it. But what we’re trying to do now is start a formal foundation, and for that you need a good staff. Is there any foundation that exists now that you are looking to use as a model? I know some of the people who manage these foundations who are friends, and I think they’re very smart and compassionate and probably doing a good job, but I don’t really know. For example, (Carnegie Foundation CEO) Vartan Gregorian has been an old friend of Patti’s and mine for years. Robert Wood Johnson also gives out a lot of money for a lot of good things. As a public servant and as a businessman, there has been a unique opportunity to bring to the nonprofit world the discipline and strategy lessons of the for-profit world. Well, yeah, my background is as a manager. Managers, if they’re going to be successful, have to have accountability and objectives and standards and not be afraid to face the truth, and when something works, to go with it. I’ve always said that one difference between business and government is that, in the business world, if it works, you double up. In government, if it works, you cut it in half and send the money elsewhere. [laughter] But what I do know is that there are a lot of things I don’t know. I mean, for me to say that I know what we should do to enhance the world of art, whether it’s performing arts or visual arts, is so preposterous. That’s not my background, not my expertise. I look at things, I like them but I can’t tell you why. Same with public health, I’m not a doctor; I’m not a Ph.D. in public health. I listen. If it makes sense to me, fine. In the end, I’m a people person. I look at somebody, and if they’re very smart, very honest, okay, then I let them make the decisions. I’ve done that in business and in my city administration and I will apply that logic to a foundation. I’d like to be involved (in the money I give away), it would be interesting. I’ve got to have another career when I finish this. I’m not going to 1600 Pennsylvania Avenue. I’m not going to go back to my company. This (foundation) will be my next thing. How will your foundation run? You’ve said you want it to be very results-oriented. I don’t think we should be running programs ourselves. I think we should fund other people doing it, just because the staff can get so big and you can’t do as many things that way. Instead, we should focus on experts who are doing good work. We would act as facilitators. Yes, we should have standards, specific metrics, we should insist on results. Our foundation would demand progress. And all with the view that if potential recipients don’t like to be that accountable, then they don’t get the money. I don’t have a problem imposing standards like that.(HARRIS): At Bloomberg LP, we tried to support unusual and innovative projects, which some donors may see as less appealing, like printing costs that can often exhaust the budget of a small nonprofit. We funded the hiring of a gardener at Randall’s Island to improve the landscape — and having that one individual devoted to the surroundings there had an enormous impact. Now in office, the Mayor has been able to garner support for needy institutions using creative ways, like hosting dinners that bring in new donors. What more can you say about your foundation? Well, I’ve said publicly I’m going to sell the company at some point, sooner rather than later. Either I will sell it or my estate will sell it. And after eight years in public service, I’m not going to go back to the company. That’s not fair to anybody. In the past year, we gave roughly $143 million away (to charity). Looking ahead, we want to go and really get involved around the world and see problems that we could help solve, and do things that nobody else wants to do. Like what? Well, for example, one interest in donating money recently to the Johns Hopkins School of Public Health was to fund a big malaria project. Bill Gates is approaching malaria in the field, by distributing insecticide, laced into mosquito nets. And there are some drugs which seem to help if you catch malaria, and he’s giving those out. It’s a worthy thing. But I’m trying to build a better mosquito — in other words, fund research into genetics and other ways that would limit the problem at its source of distribution, at the carrier. You know, if you could build a better mosquito that either would not get infected or not spread the parasite, you could stop malaria. Stem cell research is another interest of mine. I’ve always been a big supporter of stem cell research because researchers right now can’t get federal monies to support it, and because a lot of donors won’t do it. So that’s another good example of something that we would do with the foundation, because there is no other way. I mean, if the federal government was willing, if the NIH was willing to fund stem cell research, then we might put our money somewhere else. But the truth of the matter is that the government won’t, so we would. Or, we might find a small performing arts or cultural institution to fund that really needs the help. We’d look into it because nobody else is going to do it, so that’s another example of what we might do. Or maybe there’s one professor at a school who doesn’t have great grant-writing skills, but he or she is doing groundbreaking work. That kind of thing.

"I'm not going to 1600 Pennsylvania Avenue. I’m not going
to go back to my company.
Philanthropy will be my next thing.”

Your foundation would be focused on education and public health? I think public health and education would be among the areas of support, as well as the arts, medical research, social services, and the environment. Policy initiatives may be another area. Are there ways to educate the public or build systems that people can use to track how well government is doing its job? I think there is a lot of potential in those kinds of things. I hope it’s true that when we leave office, people will say this is the best government any city’s ever had. If that’s the case and if you believe it, you want to explain to other people how the public can get good government. You take a look at the disgrace of how parts of our government at every level are run — the people at some levels who don’t have any capabilities of making decisions, and the public doesn’t know whether they have the capabilities or not. Terrible short-term decisions can be made sometimes, which long-term can leave us with big problems. There will be a lot of things that we will be looking into, and that’s why I put in a bid for this building on the Upper East Side, to house this foundation and get it started. Patti will run it and I’ll be involved in some way. I’m not going to simply retire and learn how to hit a 3- iron. [laughter] Its focus also would be global? Yes, global. All the problems that we have, particularly public health issues, are global problems. Do you have a name for the foundation? No, but it’ll probably wind up with the name Bloomberg in it somewhere. I don’t know, but we might as well. My mother would be pleased. [laughter] The building you want to purchase. Why now?It’ll take a while to build the staff. If you start doing this right away, you need the staff to help you administer it. So I feel we may as well get started now. In fact, I wish we would have started sooner. Will your daughters be involved? They’re both very socially conscious and support various causes, and I would like to think they would be interested in it. But I don’t think you want to have your children run the foundation. You can never be objective enough. My kids are brilliant, I know. Everybody’s got gifted and talented kids, right? [laughter] Both of my daughters have a very strong social conscience. Their mother did a very good job at raising both of them, as well, and I will try to involve her, too. She’s still a very close friend. She was there from the beginning, and she has a good feeling for people and different views. What about public-private partnerships? The Mayor’s Fund is all about promoting such alliances. Lowell Bryan, the director of the Manhattan office of McKinsey & Company, has talked about the need for new types of nonprofits that rely on new alliances between governments and the private sector. Well, government can do some things and some things the private sector can do. The real difference between public and private is that when the public is spending the public’s money, there is an accountability standard, a visibility around the standard that the public has a right to know. But some projects don’t work if you have a lot of publicity. But you can push the envelope in the private sector. In the private world, I can say it sounds like a great idea. Where’s the proof? I don’t need it right away. It just sounds great, and so go do it. It’s my money, so go do it. You just can’t do that with the public’s money. Bloomberg and First Deputy Mayor Patti Harris, who have expanded the Mayor’s Fund to Advance New York City — in effect, the city’s nonprofit, which works to promote public/private partnerships to resolve social problems. Harris will lead Bloomberg’s private foundation. Or think about innovation. Innovation sometimes happens out of uncertainty. Innovation is really experimentation, a big question mark. You don’t know what you’re doing, you don’t know how it’s going to work, what’s it going to cost, who’s going to use it, what it’s going to do. You don’t know any of those things. You take a chance. But if you’re spending the government’s money, you have to be able to answer all of those questions in advance. And so it’s very hard with public dollars to innovate. Instead, you have to go and have a panel of experts say that this is likely to work and, therefore, let’s fund it. If you go back to the art world, I mean, if it wasn’t for private philanthropy, who would have ever funded an Impressionist? It wasn’t (seen as) art (when it was being produced). It was (considered) garbage, somebody throwing paint on a canvas. And I think there are a lot of things like that, treasures and worthwhile endeavors — and jazz, too, for example — that would not have been funded were it not for philanthropic giving in our society. (HARRIS): n this administration, we’ve emphasized the importance of public-private partnerships. The Mayor’s Fund to Advance New York City, which, in effect, is this city’s nonprofit, has improved, I believe, the services available to New Yorkers and their quality of life. It’s helped to get the private sector involved in public programs. Government can’t do it alone. For example, when city budget constraints in 2003 would have forced us to turn off the lights on the East River Bridges, private supporters stepped in to help us keep the lights on. And when we began a pilot project to provide vision care services to public school students, donations, including free eyeglasses, enabled us to develop an important program serving kids in all five boroughs. Many nonprofits are under the gun to do things differently. Now there is a massive influx of new wealth, a dramatic increase in the number of charitable organizations, new cries for accountability from Washington, as well as globalization. It is gratifying to see the growth of philanthropic organizations, but it’s also a cause for concern that we keep our fundamental commitment to those in need. An advantage of having more charitable organizations is that there’s a greater array of outlets addressing increasing social needs, and there is the potential to bring new players into the philanthropic world. And the concern about accountability? That’s because we’re in a litigious society, because there are magazines like yours. Before, nobody really bothered (to hold charities accountable). What about Washington’s attempts to crack down on charity fraud? I’ve always believed in accountability and where there may be questions of fraud, the government should get involved. Also keep in mind: if you put your money in a foundation, there is a tax benefit— another 25, 30 percent, whatever the tax rate happens to be—so it involves public money. You don’t like the scrutiny? Then you do not have to have a foundation that takes a tax deduction. Is regulation of charities tough enough? I don’t really know. I’m sure there’s some minor fraud. There’s always going to be somebody who’s giving, who gets a tax deduction, and they give the money to their girlfriend’s spouse, boyfriend, whatever the case may be — brother-in-law? But that is so much at the margin. For the most part, there seems to be sufficient oversight. Most people write checks, I assume, to their churches, temples, synagogues, mosques. That’s got to be a very big part of philanthropy. It’s been six years since 9/11. How has philanthropy here changed since then?There was a big outpouring of support for New York right after 9/11. The entire world had a new connection to the city, and to our losses. People came up with hundreds of millions of dollars for victims’ families and for the firefighters. After 9/11, both the city and the country went into an economic downturn, which I think led to a more cautious attitude about spending and giving money.But the economy has come roaring back. Many charities are telling us now that they not only came back to their pre- 9/11 numbers, but that now, they’re doing even better. I think it is because we’ve had strong leadership there, and because the city is doing well, and because there are a lot of philanthropic, quality people in New York who have lots of friends and know how to ask for the order. I don’t know that it all comes out of 9/11. Maybe you can argue that we have a spirit in New York because of 9/11, and so we’re all happier or more tolerant of each other or more forgiving, I don’t know. After Hurricane Katrina, there was an outpouring of support by New Yorkers. And then, when we were told they were not ready to accept volunteers or supplies, we put together a drive to collect money through the Mayor’s Fund, and we raised more than $1.5 million for Katrina victims. (HARRIS): When we came into office, we called business leaders and philanthropists and asked them to help support a respectful 9/11 memorial. We had an overwhelming response from everyone we contacted, and we’ve been able to keep funding this important commemoration with private money donated to the Mayor’s Fund. We hope the focus will now move to support for the permanent 9/11 memorial, underway. And the impact on the city in general? The best thing that’s happened to this city in terms of philanthropy after 9/11 is the resurgence of the city; more people are working here today than have worked here in 18 years. Historically, you can look way back. Remember alms for the poor? That was charity. Back then, nobody funded research, nobody — maybe a few kings funded a painter or two. I don’t know who paid for schools. But today there are plenty of private institutions and, you know, every night in this city, you can go to every ballroom, Chelsea Piers, the Hilton, the Sheraton or the Waldorf, the Marriott — all are full with charity galas and sometimes three or four dinners a night. The charity business is a multi-billion- dollar business in this city. Is philanthropy fashionable now? I don’t know if this is true in other cities. I suspect not, but I’m not sure. Philanthropy dictates the social pecking order in this town. It’s what pulls people together here. It’s a bit different today. Philanthropy comes in many styles. The social element is huge, the big dinner benefits. Even the Mayor’s Fund raises money this way. Today, philanthropy is much more of a participatory thing for big donors, too. Go and look at who is sitting at the board table at a charity and you’re going to see that it’s a much more diverse organization than it might have been before. (Billionaire philanthropists) never, in a million years, would have hobnobbed with the board in the past. They would have lived separately, worked separately, socialized separately. Today, it’s much more of a participatory thing for big donors, even if they just write a check and go to a board meeting. So there’s a difference today. Whether it’s true outside New York, I don’t know, but it’s certainly true in New York.