December 12, 1996 | Read Time: 12 minutes
Aaron Diamond Foundation is set to shut down — as planned — after donating $220-million in 10 years
Many charities here will begin 1997 by saying goodbye to a beloved benefactor. On New Year’s Eve,
the Aaron Diamond foundation will close its doors, after a decade of giving almost $220-million to more than 700 New York charities. Most of the foundations’s beneficiaries have been organizations that conduct medical research, help provide education to minorities, and run cultural activities.
The fund, which last year was No. 64 on the Foundation Center’s list of the grant makers that give away the most money, is the one of the handful of foundations that deliberately decide to spend all of their money in a short period of time and then go out of business. Most other philanthropies limit the amount they spend each year to make sure that their endowments will keep growing, allowing them to make grants indefinitely.
The foundation, which was started by the late Aaron Diamond, a New York real-estate developer has been widely hailed for its early and generous support of efforts to help people with AIDS. Its money helped finance the recent discoveries of drugs that seem to suppress the virus that causes the devastating illness. It has also won praise from many non-profit groups because it was one of the few foundations that made grants for general operating expenses.
Avoiding Bureaucracy
Irene Diamond, the foundation’s president and Aaron Diamond’s widow, says the decision to shut down the philanthropy 10 years after it received at large share of the couple’s fortune was made by her husband. Aaron Diamond hoped that his money would make a difference as quickly as possible, she recalls. What’s more, he did not want to build a memorial that would turn into a bureaucracy controlled by people who never knew him. Instead, she says, her husband wanted to be hands-on grant maker
But he never got the chance. He had a heart attack and died just one week after the couple decided how they wanted to give away their money.
Although the Diamonds created their foundation in 1955, they did not use it initially for significant giving. Not until 1984, when the couple was walking along Florida Beach, did they have a serious talk about their philanthropic dreams — especially Mr. Diamond’s desire to give away a large chunk of money while he was still alive.
They decided that they would give 40 per cent of the foundation’s assets to medical research, 40 per cent to minority education, and 20 per cent to cultural and other programs. Although neither of them were native New Yorkers, the Diamonds decided that almost all of the money was to be distributed in New York because the city had great needs and was the place where Mr. Diamond had amassed his wealth.
After Mr. Diamond’s death, his wife was left to carry out those plans alone. In so doing, she has been determined to take on causes that many other grant makers shun.
‘Not the Pretty Things
“I have taken risks because the things that we are interested are not the pretty things people like to give money for,” says Mrs. Diamond, 86. “We do the necessary things, like giving for AIDS programs in jails and helping schools that are in frightful condition. That does not happen often enough but that is what foundations should be for.”
Mrs. Diamond pushed the foundation to take on the fight against AIDS at a time when few philanthropies were doing so.
“I read about it in the paper, this strange disease that no one knew anything about,” Mrs. Diamond recalls. “And I said, ‘I have a feeling this is going to be very devastating and I’d like to get into it.’”
The foundation has given $45-million to AIDS research programs and an additional $5-million or more for AIDS prevention and other related efforts.
In 1991, the foundation helped create the Aaron Diamond AIDS Research Center to study the disease and the human immunodeficiency virus that causes it. Diamond has poured $25-million into the center, and from its sophisticated laboratories have emerged some of the most significant discoveries in the field of AIDS research, including recent scientific findings about “protease inhibitors” — drugs that allow people who have the virus to lead relatively normal lives for years.
‘Queen of the Condoms’
“The most effective programs to fight AIDS are those that have been premised on the basis that this is an emergency,” says Michael Isbell, associate executive director of the Gay Men’s Health Crisis, an AIDS group here. “The Aaron Diamond center has lived by that premise.”
But Mrs. Diamond has received criticism for some of the foundation’s AIDS grants. She was called the “‘Queen of the Condoms” after she led the foundation’s effort to help the New York City Schools Commissioner distribute condoms in public schools.
Vincent McGee, executive director of the Diamond fund, shares his boss’s willingness to take on controversial causes. “You should not look for trouble, but effective things often do not happen without some debate or creative tension,” he says. “Foundations too quickly shy away from anything where there may be questions, and I think we have to watch that.”
Grassroots organizations may be among the biggest losers when the Diamond Foundation shuts down. Diamond gave much of its money to small groups, and those dollars helped some organizations grow into well-established, large charities.
Unlike most foundations, which earmark money for special projects, the majority of the Diamond Foundation’s grants in areas other than medical research have come with no strings attached.
Dealing With Tough Times
Geoffrey Canada, president of the Rheedlen Centers for Children and Families, says Diamond’s support helped guide his organization through a time when it had new leadership and shaky finances.
The charity received $50,000 a year from Diamond from 1991 to 1993, then $100,000 annually from 1994 until this year. That support helped the group garner grants from other foundations as well, Mr. Canada says. When Rheedlen first started out, it raised about $150,000 from foundations and individual annually, now it is bringing in about $2-million a year.
Mr. Canada says Diamond was more effective than other foundations because it had such a limited period of which to distribute money. “There are a lot of groups bemoaning the fact that one of their usually largest supporters will no longer be around,” he says. “But what they did was the right thing. Instead of giving a lot of small grants over a longer period of time, they felt they could make a fairly significant difference.”
When the Diamond Foundation did make a grant for a specific project, it often went back to the organization later and offered to provide general support to supplement the initial grant.
“One of the things we have always tried to do so is not to tell people what to do,” says Mr. McGee. “They usually know better how to use their money. You want to encourage and have people make their own decisions and move on.”
Because the foundation knew from the start it would have a short life span, its officials always made it very clear that charities could not rely on its support forever. The foundation often worked with grant recipients to help them develop a solid plan to raise money from other sources to keep a project financially afloat.
Saying Goodbye is Hard
Diamond Foundation officials have also taken an active role in helping grant recipients find other means of support. They often introduced them to grant makers and worked with grant recipients to polish the proposals they were submitting to other foundations.
Still, saying goodbye to long-time grant recipients has not been easy.
“it has been awkward because the last several years have been very difficult financially in New York City,” Mr. McGee says. “But by working with them to find other funding we feel that we have not let people down.”
It has not just been the last few years of the foundation’s existence that have been emotionally wearing on Mrs. Diamond and Mr. McGee.
After Mr. Diamond’s death, Mrs. Diamond found herself tangled in disputes with some of the business associates her husband had selected to manage his estate and business affairs. Those advisers, Mrs. Diamond recalls, “kept putting off the foundation and kept saying we weren’t ready for it and that they wanted to reorganized things.”
After discovering differences between what Mr. Diamond had wanted and what the financial advisers were telling her, Mrs. Diamond ordered an audit of the estate. As a result of its findings, one associate was convicted of fraud and embezzlement and sent to jail, and another was removed as an executor and trustee of the estate.
Clock Began Ticking in 1987
It was not until January 1, 1987, almost three years after Mr. Diamond’s death, that the foundation was finally able to begin large-scale grant making — and the clock started ticking on its goal of shutting down a decade later.
Mrs. Diamond had not had any previous experience with foundations, but she says her early career as a story editor at the Warner Brothers film company and elsewhere was useful. (Mrs. Diamond is credited with finding the script that she eventually helped turned into the movie Casablanca.)v
Grant making, she says, is not that different from what she did in Hollywood: “You found a good project, you would research it, and then you would do it.”
Mrs. Diamond says that in her early years as a grant maker, she did not fully appreciate her husband’s insistence that the fund should not operate in perpetuity.
I didn’t realize how right he was until half way,” says Mrs. Diamond. “If you leave it to other people, it does not necessarily mean it won’t be a good foundation, but it won’t be yours, with your ideas.”
Mrs. Diamond’s ideas have influenced every aspect of the fund’s operations.
She hates foundations that spend too much money on “accouterments,” she says, so she has always run a lean organization. The foundation has given away an average of $20-million a year, with a staff that never grew larger than 12 people.
Its offices, 26 stories about Radio City Music Hall, are modest and decorated with artwork from several of the foundation’s grantees, such as the Studio in a School Association, a group that brings artists into public schools and homeless shelters.
“Many foundations have big offices and very luxurious luncheons,” Mrs. Diamond complains. “We don’t do that. We would rather spend the money on the people that need it.”
She adds: “You can accomplish more if you stick to your guns and your priorities and use your money for that purpose, not for the aggrandizement of the foundation.”
A Case Study
For some, the Aaron Diamond Foundation — which plans to archive its thousands of documents in the New York Public Library for all to peruse — will be a case study. The mass of proposals, summaries, evaluations, and other materials may help shed some light on the questions of whether a foundation does better work if it has a limited life or is set up to last forever.
Most of Diamond’s grantees say the foundation’s work shows why a short life span might be better.
“They’ve set an example of what can be done and how to transcend the ivory tower of foundations to truly impact people’s lives,” says Mario Cooper, a board member of Gay Men’s Health Crisis.
Mrs. Diamond says she has no question that her grant making was improved by knowledge that the foundation would not exist until the end of time.
She says she would only make two changes if she had to do it all over again: She would have made grants to groups pushing for gun control, and she would have supported more day-care centers for kids.
But even as Mrs. Diamond prepares to close the foundation, she shows no signs of retiring from philanthropy. She plans to give away about $4-million next year through the Irene Diamond Fund.
“I am going on because there is so much to be done — as long as I am able to do it,” Mrs. Diamond says.
“I am an old lady, but my spirit is not — because I’m involved.”
A SAMPLING OF GIFTS FROM THE AARON DIAMOND FOUNDATION 1987 – 1996
Medical Research
Aaron Diamond AIDS Research Center for the City of New York for renovation of the center, new equipment, and to pay for programs: $25,000,000
Aaron Diamond Postdoctoral Research Fellowships on AIDS and Drug Abuse, to recruit and support 100 fellows in New York research institutions to study treatments and prevention: $19,800,000
Mount Sinai Medical Center, for research on and development of AIDS-prevention programs in East Harlem: $874,250
Capital District Center for Drug Abuse Research and Treatment for the creation of a center to develop and test new drug treatments: $698,535
Latino Commission on AIDS, for general support: $70,000
Minority Education
City University of New York, to collaborate with public schools and for teacher training, graduate-level scholarships for minorities, peer tutoring, curriculum development, and other projects: $17,065,218
New Visions for Public Schools (formerly Fund for New York City Public Education), for general support and several specific projects: $5,770,000
The Studio in a School Association, for general support of efforts to bring artists into public schools and for after-school art workshops for homeless children: $1,145,000
El Museo del Barrio, for education programs in the Manhattan schools: $130,000
Living Hope Family Day Care Network, for general support: $110,000
Arts
Dance Theatre of Harlem, for general support of education and young artist programs: $2,682,000
New York City Ballet, for general support and the Diamond Project for new choreography: $1,088,000
Julliard School, for efforts to recruit minorities and for scholarships: $770,000
Feld Ballet, for its New Ballet School, which provides tuition-free professional ballet raining to talented children who attend New York City public schools: $425,000
Bargemusic, a group that presents chamber-music concerts on a converted barge on the Brooklyn waterfront, for general support: $370,000
Alvin Ailey American Dance Theatre, to provide classes for young minority dancers: $235,000
Human Rights and Civil Liberties
Human Rights Watch, for general support and special projects: $2,150,000
Advocates for Children of New York, for general support: $1,460,000
The Correctional and Osborne Associations, for general support and the AIDS in Prison Project: $1,030,000
Center for Immigrants Rights, for general support: $275,000
Volunteers of legal Services, for costs associated with coordinating free legal services donated by New York law firms: $200,000
Center for Reproductive Law and Policy, for general support: $120,000
Committee to Protect Journalists, for general support: $95,000
Note: Amounts are totals for all grants made to the organizations in the past decade. All groups are based in New York.
