April 14, 2005 | Read Time: 7 minutes
As president of the F.W. Olin Foundation, Lawrence W. Milas has spoken at the dedication of more than 30 college and university buildings the philanthropy has financed. And at most of the ceremonies, Mr. Milas says, he has made the same remark: “The power of philanthropy is mighty indeed.”
What he is referring to, in particular, he says, is the $21-million that Franklin W. Olin, a businessman who made a fortune in the munitions industry, gave to the foundation he started in 1938. Nearly $800-million in grants has been awarded by the foundation in the years since, much of it to pay for the construction of 78 buildings on college campuses around the country.
“Those buildings, worth well over a billion dollars to replace, are what came from Mr. Olin’s original $20-million investment in philanthropy,” Mr. Milas says. “That is the power I am talking about.”
Yet Mr. Milas and the other trustees also believe the F.W. Olin Foundation, in Sarasota, Fla., can be most effective by limiting its life span. The philanthropy will shut down at the end of the year, and Mr. Milas, who has been on the foundation’s board since 1974, will retire.
For Mr. Milas, a lawyer who had been in private practice before coming to the foundation, working as the president of the F.W. Olin Foundation has been a full-time job since 1988. To keep overhead costs down and to eliminate layers of administration, he says, the foundation’s small board — he and three other members — has run the organization largely without a staff. Mr. Milas, who will be 70 when he retires, has in recent years earned more than $300,000 annually in salary and deferred compensation.
During Mr. Olin’s lifetime — he died in 1951 — the foundation gave mostly small grants to a variety of causes. Two exceptions were a 1940 gift to Mr. Olin’s alma mater, Cornell University, for a chemical-engineering building, and a grant nine years later to build a vocational high school in Illinois. By the 1960s, such gifts became the foundation’s hallmark, as the board narrowed the organization’s grant making to one or two large gifts a year for educational facilities.
In 1997, the F.W. Olin Foundation pledged $200-million — among the largest awards ever in higher education — to create from scratch a stand-alone engineering college. Since then, the foundation has pumped a total of $461-million into the Franklin W. Olin College of Engineering, in Needham, Mass., including a final $30-million grant late last year. When the foundation shuts down, it will transfer its remaining assets, up to $10-million, to the college.
Another prominent Olin Foundation is also planning to shut its doors soon: The John M. Olin Foundation, in New York, which was established by one of Franklin Olin’s sons, will close down in the next few years. John Olin didn’t want the foundation to outlive the trustees who knew him and what he wanted, so the foundation is now trying to spend the last of its money. Franklin Olin was not as explicit, but Mr. Milas says he believes his foundation, which has no connection to the John M. Olin Foundation, can best carry out its founder’s goals by closing.
It was Mr. Milas who 12 years ago first floated the idea that the foundation go out of business. Over the next four years, the board developed a plan to start the college — based in large part on National Science Foundation studies that found engineering education lacking in this country — and phase out the F.W. Olin Foundation.
“We looked at this as the foundation turning itself into a college,” says Mr. Milas, who at the end of the year will step down as chairman of the college’s board, but remain a trustee.
In an interview with The Chronicle, Mr. Milas talked about the foundation and its plans to shut down.
Has the board struggled with the foundation’s narrow grant-making program?
I don’t think so. We all bought into the idea that focus is extremely important. To have any impact or effect as a foundation, you have to find something that you can do, and do well. If you try to do everything, or move each year or every few years to what the latest fad in grant making is, you are not going to have much impact. The other thing that was always interesting about our kind of grant making is that we can really tally up in a quantitative way what we have done, whereas with other kinds of grant making, for what is called soft needs, it’s very difficult to present any kind of accounting for what you have done other than the dollars you have spent.
How critical is it for foundations to be able to give such a hard accounting?
Obviously, when you are talking about social services and that kind of thing, there’s no question that there are many successes. But I wonder whether some of those successes would have occurred anyway, and where that funding might have been better used. How do we account for all that? I just don’t know. I’m not suggesting that that kind of funding should stop.
Where should support for programs such as social services come from then?
It’s very important for philanthropy and others to support a lot of these needs, but it’s not clear to me that all the money that foundations pay out for those needs is well spent.
What was the biggest benefit of giving so few grants that were each so large?
My whole concept of this was that we weren’t really giving away buildings. We were simply using the buildings as sort of a carrot to encourage and stimulate college and universities to move forward, to develop, to become stronger institutions. A multimillion-dollar grant from a nationally known foundation, that was seen by many in higher education as the equivalent of the Good Housekeeping Seal of Approval, was one that could get an institution’s constituency excited.
Do you think other foundations should close, as Olin is doing?
As new foundations are created out of new entrepreneurial wealth — Bill Gates is the most obvious example — smaller and middle-sized foundations are going to become less and less relevant, and the people who run them are going to be much more remote from the people who founded them. I’m going to sound like I am critical of the foundation world, and I certainly don’t mean to, I’m not painting with a broad brush here, but in certain cases there are foundations that really exist for their administrators, who really don’t do much with all they have. With all of that combined, you need to ask: Where would this foundation be 25 or 50 years from now? What will it be doing? How true will it be to its founders? These are all serious questions that we considered. Questions that other foundations maybe ought to consider.
How is Mr. Olin’s vision or legacy preserved with his foundation going out of business?
Certainly people who take their kids around to colleges that they may be interested in gaining admission to are often struck by the number of Olin buildings around the country. That’s a legacy that will be recognized as long as those buildings stand. Basically, we wanted to do good, add some value to the world, help young people create a better world. Students and teachers are what you have to have for a good education, but you need facilities, too, and we chose to support educational buildings. We chose to support one thing, and when you think about what we have done, there is a clear record and I am very proud of it.
LAWRENCE W. MILAS, PRESIDENT OF THE F.W. OLIN FOUNDATION
Education: Earned a bachelor’s degree in business administration from Babson College, in Wellesley, Mass., and a law degree from Columbia University, in New York.
Previous work experience: Mr. Milas was a partner in the New York City law firm of Baer Marks & Upham, where he specialized in tax law and trusts and estates.
First book he plans to read in retirement: Truman, by David McCullough.
First adventure he plans in retirement: Driving his power boat up the East Coast from Florida to New England.
