Now that the philanthropy of Charles F. (Chuck) Feeney has been thrust into the spotlight, a clearer picture is forming of how his gifts remained a secret and why colleges and other recipients didn’t mind the mystery.
Mr. Feeney, who made a fortune from a string of duty-free shops, revealed last month that he, through two obscure foundations, over 13 years had given more than $600-million to colleges, universities, and other charities in the United States and abroad. Higher education received about half of that amount.
The foundations, by selling their stake in the company that Mr. Feeney co-founded, stand to increase their total assets to $3.5-billion -- an amount that ranks them among the world’s largest charitable organizations.
The foundations, wealthier and more public than ever before, plan to stick to their old practices. No applications for grants will be accepted, and no announcements of awards will be allowed. The foundations’ priorities are also expected to stay the same, so past awards may provide the best clues about their future ones.
For more than a decade, the foundations were a secret kept by a small group of influential people in the worlds of American higher education and philanthropy. These people had willingly taken on a"secret life” with efforts to find projects to support, trips and telephone calls to check them out, and business lunches to recruit prospective board members or foundation employees.
Mr. Feeney wanted to keep things secret, but he allowed his giving to become public knowledge last month. He knew that the foundations’ existence would become known because of a suit filed against him in a New York court by his former business partner, Robert W. Miller, who is challenging the recent sale of what he thought was Mr. Feeney’s interest -- but was really the foundations’ -- in Duty Free Shoppers Group, Ltd., the international company the two men founded in 1960.
Mr. Feeney’s life is a classic story of rags to riches. He was born in Orange, N.J., the son of an insurance underwriter. He served in the U.S. Air Force during the Korean War and later attended Cornell University on the GI Bill, supplementing his income by selling sandwiches to students. He graduated from Cornell in 1956 with a bachelor’s degree in hotel administration.
In 1982, in Bermuda, he set up the Atlantic Foundation to make anonymous, unsolicited grants in the areas of education, children and youth, aging and health, and human rights.
Two years later, he irrevocably transferred his 38.75-per-cent interest in Duty Free Shoppers, as well as many of his other assets, to the foundation. Few, if any, in the business world knew until last month that he had done that, or that it had left him with only $5-million in personal assets.
In 1986 the Atlantic Foundation established a sister fund, the Atlantic Trust. Mr. Feeney also set up a third organization in New York City, the Atlantic Philanthropic Service Company, to make the foundations’ grants. The company sought out the causes to support; when it made awards, it said it was doing so on behalf of a number of anonymous donors.
The company also made the recipients of the grants sign documents, agreeing not to discuss the gifts publicly. Any that did, risked losing the money.
Since coming forward, the foundations have released a partial list of recipients and broad ranges of the size of grants to them.
Some grants that the foundations did not disclose, however, are listed on public tax documents filed by an American division of the foundations. Those include a total of $125,000 in 1994 and 1995 to the I Have a Dream Foundation, which helps needy students go to college, and $250,000 in 1994 to Teach for America, which trains as teachers college graduates who do not have education degrees.
The nature of these grants is in line with a large portion of the Atlantic foundations’ giving, which revolves around helping needy students and the elderly, improving teaching, supporting fund-raising efforts, and providing for technology. Those priorities will not change."There’s no reason to think we’ve solved all the problems in those areas,” says Joel L. Fleishman, president of Atlantic Philanthropic Service. “There’s plenty of work to be done.”
Alison R. Bernstein, vice-president of the Education, Media, Arts, and Culture Program at the Ford Foundation, says that although many foundations support those areas, there is always room for more. Ford, without knowing who the donor was, has worked with the Atlantic Service Company in the past and hopes to work with it again."Often the best kind of work is when several foundations come around a common goal, but each takes a different slice of how to achieve that goal.”
Donald M. Stewart, the president of the College Board, says that after being contacted by Atlantic Service in 1992, he questioned it"for about five minutes.” But the representatives of the company, he says,"were very respectable and professional people” who already had"done their homework” about the program they were interested in supporting -- a project called Equity 2000, which helps minority students get into college.
“We went on faith, and most of us at the board thought it was a group of Japanese industrialists,” who were putting up the much-needed money, says Dr. Stewart.
While fund-raising experts say anonymous giving is a highly respected form of philanthropy, they point out there can be some dangers."It is possible that the person made the money or gave it in a way that doesn’t jibe with the values of the institution,” says Charles R. Stephens, chief development officer of the Indiana University Center on Philanthropy.
In this case, Mr. Feeney revealed that he had given about $280,000 of his own money to the Friends of Sinn Fein, a group that lobbies the American government on behalf of Sinn Fein, the political wing of the Irish Republican Army. Mr. Feeney stressed that his money went to support the peace process, not violence.
That explanation satisfies many recipients of his foundation’s gifts, including Robert Zemsky, director of the University of Pennsylvania’s Institute for Research on Higher Education, which received close to $1-million.
Dr. Zemsky says he would feel differently if the gifts to the Sinn Fein group had come from the foundations."That would have been a total commingling of political purposes and philanthropy,” he says."That would have bothered me.”
While Mr. Feeney’s foundations are unconventional, that is an advantage, say many grant recipients. The small, anonymous foundations, they say, can act more quickly than larger, more-bureaucratic foundations that require study after study to prove there’s a problem before giving money to solve it.
“They’re very proactive, very creative foundations,” says Inge T. Reichenbach, Cornell’s vice-president for alumni affairs and development."They think outside of the box.”
It was the Atlantic foundations’ idea, she says, to set up and support a program at Cornell that gives loan reductions to outstanding students who have jobs or are active in campus or community service.
The Atlantic Foundation is governed by a nine-member Board of Directors that meets four times a year in Bermuda. Its members include Mr. Feeney; Harvey P. Dale, the foundation’s president and director of the National Center on Philanthropy and the Law at New York University; Frank H.T. Rhodes, a former president of Cornell University; Michael I. Sovern, president of the Shubert Foundation and a former president of Columbia University; and Elizabeth J. McCormack, vice-chairperson of the John D. and Catherine T. MacArthur Foundation.
Ms. McCormack says that every gift is approved by the board, and that each director’s vote carries the same weight."It isn’t Chuck or anyone else saying this is what we’re going to do,” she says.
Ms. McCormack acknowledges that institutions connected to some foundation officials did get gifts -- including Cornell, which received more than $50-million, and Mr. Dale’s philanthropy center, whose support she would not elaborate on. But, she says, the gifts to Cornell were made before Dr. Rhodes came on board. And Mr. Dale, like anyone else connected to an institution that’s up for a grant, would sit out the vote, she says.
Like most of the people who worked with these foundations, Ms. McCormack became involved through contacts she had with its employees or directors.
As for Ms. McCormack, her ties to the foundation date to the early 1990s, when Cambridge College, where she served as a trustee, was first contacted by Atlantic Service. Mr. Dale came to check out the campus and its academic programs, which focus on providing women and minority adults with college degrees. Ms. McCormack was impressed with Mr. Dale’s evaluation and with how he sat in on classes and interviewed students and professors. (The college received money, but officials decline to say how much.)
Soon after his visit, Mr. Dale talked to Ms. McCormack about becoming involved with his organization, and he invited her to have dinner with Mr. Feeney.
She liked his ideas about giving and decided to become involved. Through the years, she told only her husband about her involvement. She couldn’t disappear to Bermuda four times a year without a good reason, she says."No great pressure was put on me not to tell anyone, but a person as generous as Chuck has a right to remain anonymous,” she says.
Mr. Fleishman became president in 1993 after being recruited by an executive-search firm. He also serves as director of Duke University’s Center on Ethics, Public Policy, and the Professions. Mr. Fleishman says although he values all forms of philanthropy, he continues to be impressed with Mr. Feeney’s commitment to anonymous giving."He doesn’t want people to feel indebted to him,” he says.
Giving anonymously, Mr. Fleishman says, avoids the"crowding out” effect, in which potential donors might not give to an institution if they see it is already receiving major gifts from a highly visible source. In addition, Mr. Fleishman says, the life of an anonymous donor"isn’t complicated by having people want to curry favor with you all the time.”
Since coming to Atlantic, Mr. Fleishman has received several job offers to head high-profile foundations. He has turned them all down because of the meetings, speeches, and conferences such a position would require.
“Running an institution that is public means a person has to take on a lot of activities that distract from the center of the operation of the organization,” he says.
Mr. Fleishman says that even though the word about the foundations is out, the organizations will try to continue to give anonymously to improve education, and to give people -- young and old alike -- more opportunities in life.
But even some of the directors acknowledge that may be difficult. Says Mr. Sovern:"We’ll get credit now for every anonymous gift that’s made. But we’ll try it and see how it works.”
Universities and Education Groups That Received Gifts From Charles F. Feeney’s Foundations
MORE THAN $50-MILLION
Cornell University
- Annual loan reductions for outstanding undergraduates who demonstrate significant work experience, campus involvement, or community service; Cornell International Institute for Food, Agriculture, and Development, which seeks to find ways to sustain agricultural and rural development in Third World countries; and efforts to encourage alumni to give to the endowment in the university’s five-year, $1.25-billion campaign, which closed last year
$10-MILLION TO $50-MILLION
Dublin City University, Ireland
- New physical facilities, academic programs, summer program for talented youth, and postgraduate research
University of Dublin Trinity College, Ireland
- Physical facilities, academic research, and computerization of library records
University of Limerick, Ireland
- Fund-raising costs, new physical facilities, computer equipment, and academic research
$1-MILLION TO $10-MILLION
Citizens’ Scholarship Foundation of America
- Efforts to advertise and to raise money to increase the number of its"Dollars for Scholars” chapters, which award college scholarships to high-school students in about 770 communities across the country
College Board
- Equity 2000, which aims to help school systems close the gaps in the rates of going to college between minority students and non-minority students, and between advantaged and disadvantaged students
Mount Sinai School of Medicine
- International Longevity Center, which conducts research projects and educational programs on the aging population
National Board for Professional Teaching Standards
- Efforts to develop a system of standards that will recognize “master” teachers in the nation’s schools
University College Cork of the National University of Ireland
- Teaching and research building
University of Chicago
- Support for the Chapin Hall Center for Children in the form of fellowships for graduate and postgraduate students studying how to use public policies to improve the lives of children
University of Ulster, Northern Ireland
- Physical facilities, the"Peace Line” campus in West Belfast, and its Centre for Voluntary Action Studies
UNDER $1-MILLION
Portland State University
- Efforts by various departments to develop community-based projects and learning opportunities for students and to provide training and workshops for faculty members who are involved with such programs
University of Pennsylvania
- Support for the Institute for Research on Higher Education to develop a set of measures and strategies that will enable colleges and universities to determine more precisely the cost of providing an undergraduate education, and to apply that knowledge toward cutting costs
OTHER
The foundations have released no information on the purposes of grants to these institutions. Awards or payments to them are noted on tax forms filed by a related foundation, the Atlantic Foundation of New York, in 1994 or 1995:
- Tufts University, Global Development and Environmental
Note: The foundations and universities involved would not release precise data on how much money was contributed to various institutions.
Sources: Atlantic Philanthropic Service Company; Chronicle reporting