Philanthropy Magazine Faces Some Questions — and a New Competitor

When donors first began receiving The American Benefactor magazine a year or so ago, many charity executives hailed the philanthropy quarterly as an innovative tool that could give them an edge in fund raising. Distributed through charities, which buy subscriptions as gifts to donors, the magazine is supposed to build good will with wealthy patrons, teach them about philanthropy, and persuade them to open their wallets wider.

But as it enters its second year, The American Benefactor faces hurdles that are high even by the standards of the magazine industry. Some charities say they are disenchanted with its editorial focus on celebrities like the actor Paul Newman and the billionaire Bill Gates and by its pages of upscale advertising for Cartier jewelry and Mercedes sedans. Others say they have seen little or no evidence that the magazine enhances donors’ interest in philanthropy.

And in a strange twist that belies the genteel image of the philanthropic world, The American Benefactor’s founder, Roberta d’Eustachio, who says she was fired by the magazine last May because of business and philosophical differences, now plans to launch a competing publication called Giving that could sharply divide the market for publications aimed at donors.

Ms. d’Eustachio says her goal is not to hurt The American Benefactor, in which she retains a 10.5-per-cent ownership stake. Rather, she says, she wants a magazine that reflects the notion that “philanthropy is not limited to the wealthiest among us” — a philosophy she says the Benefactor’s editors and managers don’t understand.

“I aim to get it right,” Ms. d’Eustachio says of her new venture. “If that means there will be some wreckage” at The American Benefactor, she adds, “then it happens.”

W. Randall Jones, chairman of the Benefactor, says he cannot respond to Ms. d’Eustachio’s plans until he sees her magazine, which is due out in September. “It’s one thing to have an idea,” he says, “and quite another to execute it.”

Ms. d’Eustachio’s move comes at an important juncture for The American Benefactor. Its majority owner, Capital Publishing Limited Partnership, which also produces Worth and Civilization magazines, has been up for sale. Mr. Jones says he heads an investment group that intends to buy controlling interest from Capital’s majority owner, the financial-services giant Fidelity Investments.

Breaking Capital’s ties to Fidelity could ease one concern that has dogged some charities: that Fidelity might use sensitive donor subscription lists, which charities must turn over to Capital for processing, to market its Charitable Gift Fund and other investment services. Mr. Jones says a thick wall of confidentiality exists between the donor list and the investment company. But wariness persists.

“Although we’ve had every assurance, and I have confidence, in the security of that list, that’s still a question in some people’s minds,” says Thomas W. Cullinan, executive director of gift planning at the University of Maryland System, which has renewed its roughly 2,000 subscriptions to The American Benefactor.

Mr. Jones and other officials of the Benefactor say they are pleased with the magazine’s progress, and they buttress their optimism with numbers. Three in four charities that subscribed in late 1996 or early 1997 are renewing, they say, and a recent survey of readers indicates that 16 per cent increased their contributions to charity as a result of reading the magazine. Forty-four per cent said the publication was “essential or very important” as an information source on philanthropy, according to the survey.

Jim Reilly, director of planned giving at Fairfield University, is among those who embrace the Benefactor. Fairfield is renewing its 250 subscriptions, which are paid for by an alumnus, Mr. Reilly says. “I’ve been very happy with every issue,” he says. “Our basic aim was to provide benefactors with an independent publication — independent of us — that would state the case for philanthropy through example and illustration.”

Still, Mr. Reilly’s view is by no means universal. In interviews, a number of charity executives expressed mixed feelings about the Benefactor’s tone and content, and some said they are not renewing.

One recurring theme of complaint was what they see as the Benefactor‘s tony advertisements. Their donors, they say, are more comfortable shopping at Wal-Mart than at Neiman Marcus (an occasional Benefactor advertiser) and would not be able to afford to give to charity if they indulged in the platinum jewelry, Hawaiian resorts, and Brioni suits promoted on the magazine’s ad pages.

Susan D. Thomas, director of planned giving at the Binghamton University Foundation, which bought 100 subscriptions last year, says that some recipients liked the magazine but that others were “very offended that anyone thought philanthropy was about keeping up with the Joneses.”

The Binghamton foundation, which raises money for the State University of New York at Binghamton, didn’t renew for 1998, Ms. Thomas says. “Our donor group does not match well with that magazine,” she says. “Their sensibilities are a bit different.”

The Benefactor’s editorial mix also makes some charity officials uneasy. While topics have ranged from “the endangered charitable deduction” and “why we give” to donors who become mentors to inner-city children, charities complain that there has been a heavy dose of celebrity and big-name personality in the magazine. As an example, they point to the latest issue, whose cover story is titled “The Hollywood Way of Giving.”

“Hollywood charity is equal parts philanthropy and special effects,” a headline notes.

Nelson W. Aldrich, Jr., the Benefactor’s editor in chief, defends the magazine’s content. Those who complain about the stories may not be reading them, he says. “We don’t think they know what they’re talking about,” he adds.

Bente Strong, the publisher, adds that charities should remember “that the magazine is designed for their donors, and we know the readers — donors — are loving it and demanding it.”

Ms. d’Eustachio, who continues to be listed on the Benefactor‘s masthead as founder, has quite another view of her erstwhile editorial home. She and her co-editor in chief of Giving, Douglas E. White, a prominent planned-giving authority, say they will shape their new venture to compensate for what they see as The American Benefactor’s shortcomings.

Their ambitions are high: A debut with more than a million subscriptions, a United Kingdom edition by spring 1999, plus future editions in Australia and Canada.

Ms. d’Eustachio says she has more than $10-million in venture capital and her own money to get the U.S. and U.K. editions off the ground. She also says she is negotiating with a U.S.-based media company with global operations to finance Giving on a broader international scale. She refuses to name the media company.

Like the Benefactor, Ms. d’Eustachio says, Giving will be distributed to donors through subscriptions arranged by charities. But, she says, the subscriptions will be free, and Giving will be sold on newsstands and through individual subscriptions.

Ms. d’Eustachio and Mr. White say they will shape Giving’s editorial content to reflect the view that philanthropy is not just an impulse of the rich but rather, in Mr. White’s words, “a broad feeling and a human emotion we all have.”

A prototype cover story portrays a “land rich, cash poor” farmer named J. C. Hyde, pictured with his dog and mule. Mr. Hyde “preserved his land, made a big gift to charity, and paid the I.R.S. $500,000″ in estate taxes, a headline declares.

A focus on everyday charity could well have an appeal with some charity executives. “I could be very enthusiastic about that kind of product,” Mr. Cullinan says. “The American Benefactor has staked out its territory to play to the very wealthy and the highly connected charitable person. There’s another market it may not be able to reach that is a much broader-based, middle-American, common-sense market about philanthropy.”

Whether Ms. d’Eustachio and Mr. White can muster the money and know-how to tap that market remains an open question. Already, it seems, the skeptics await.

“Just when we thought The American Benefactor comatose, we get Giving,” one fund-raising official wrote this month to Ms. d’Eustachio and Mr. White on an on-line discussion list. “It looks like from slick to hokey. Will we get tractor and denture ads instead of watches? Please give us the pitch.”