William Simon’s Legacy to Philanthropy

By LESLIE LENKOWSKY

With the death of former U.S. Treasury Secretary William E. Simon, philanthropy lost one of the most influential figures of the past 25 years. His contributions were rarely acknowledged in many corners of the non-profit world, even though his observations about the relationship between philanthropy and capitalism have set the agenda for a growing number of donors.

To be sure, especially in his later years, Mr. Simon’s personal generosity attracted considerable recognition and acclaim. Though his zest for making money as a financier was legendary, he was just as eager to give it away. He worked hard to make certain that most of his estimated $500-million fortune would be given to charity during his life and the lifetimes of his children.

Mr. Simon made a point of devoting not only money but time to helping the needy, and insisted that his children do likewise if they wanted to remain trustees of his foundation.

“Writing checks for charities is necessary and important,” Mr. Simon, a devout Catholic, told The Chronicle in an interview that was published two years ago. “But it can’t compare with corporal works of mercy, which are infinitely greater.”

Bill Simon’s example of how to be a good steward of wealth is not primarily what made him a prominent figure in the philanthropic world, however. Mr. Simon’s real legacy consists of his ideas about the role of foundation and corporate giving in American society — ideas that have drawn criticism but are now also finding growing acceptance among donors.

Those ideas were first laid out in his 1978 book, A Time for Truth, which became a surprise best-seller. Written after he had served four years in the Nixon and Ford administrations, it is chiefly a sharp critique of government policies that Mr. Simon believed were stifling economic growth and threatening individual liberties. (The book carried introductions by Nobel Prize-winning economists Milton Friedman and F.A. Hayek.)

In the concluding chapter, Mr. Simon turned his fire on grant makers, charging them with promoting public support of those policies.

“Most private funds,” Mr. Simon wrote, “flow ceaselessly to the very institutions which are philosophically committed to the destruction of capitalism.” In particular, he added, “the great corporations of America sustain the major universities, with no regard for the content of their teachings … [and sustain] the major foundations, which nurture the most destructive egalitarian trends.”

Why they did so he could not really explain, but he attributed it to the desire of most business leaders to place “short-range respectability” ahead of “long-range survival.” Yet the eventual result, he noted, would be the destruction of the economic and political systems that sustain not only the wealth that makes philanthropic activity possible but also the independence that makes it so valuable.

Mr. Simon called upon business leaders and donors to “rush by multimillions to the aid of liberty, in the many places where it is beleaguered.”

He did so himself by accepting the presidency of the John M. Olin Foundation, which seeks to advance “the virtues of the free-enterprise system and the traditional American values of individual political freedom and responsibility” through supporting scholars and programs inclined toward those ideas.

He also spearheaded the group that created the Philanthropy Roundtable, an organization whose membership now includes some 600 foundations, corporations, and individual donors interested in the kind of grant making that Mr. Simon advocated.

Among leaders of the philanthropic world, however, Mr. Simon’s views were controversial, to say the least. Many of them rejected his claim that their grants were undermining capitalism and individual liberty. And many campus leaders contended that donors who took Mr. Simon’s advice would themselves be restricting academic freedom.

To those who disagreed with Mr. Simon, the John M. Olin Foundation came to be an example of misguided philanthropy, more interested in promoting a political agenda than in acting as a responsible grant maker should.

Often that reaction was more than a little defensive, suggesting perhaps that Mr. Simon had indeed hit a nerve. And the accusation that the Olin Foundation would interfere with academic freedom increasingly appeared implausible, as its roster of grantees came to include more and more scholars of unquestionable excellence — a standard Mr. Simon had insisted upon from the outset. In time, even those who disagreed with its goals had to admit that the foundation’s program was not only a legitimate one but also among the most innovative and effective in philanthropy.

What Mr. Simon did was to show how “conservative” — or as he probably would have preferred, “classical liberal” — ideas could be translated into serious grant making. He did not do this alone; he had many allies, both at other foundations and elsewhere (including this writer). But with characteristic bluntness and imperviousness to what others thought of him, he was the most prominent and steadfast promoter, using his public stature to gain entry to boardrooms and other places where he could make the case for philanthropy that identified progress with the growth of enterprise rather than of government.

Today, much of what Mr. Simon stood for seems to have a growing number of adherents in the grant-making world. Corporate-giving officials now talk of aligning their objectives more closely with those of their businesses. Private foundations are now increasingly looking for ways to help the poor build financial assets and obtain business loans, as well as creating inner-city private schools to serve low-income families and their children — projects they rarely supported in the past. And of course, among the rising generation of philanthropists (and not a few of the older ones), applying entrepreneurial principles to grant making is quickly becoming the rage.

Not all of those successes can be attributed to Mr. Simon’s efforts. Moreover, he would undoubtedly find plenty to criticize in how today’s grant makers understand or are applying what he took to be the essential principles of capitalism. Still, there’s no doubt that being “businesslike” is more acceptable in the philanthropic world (and in the universities) now than it was a generation ago. If not well appreciated in his own time, Bill Simon’s legacy — like that of one of his philanthropic heroes, Andrew Carnegie — is likely to grow steadily in the future.

Leslie Lenkowsky is professor of philanthropic studies and public policy at the Indiana University Center on Philanthropy and a regular contributor to these pages. His e-mail address is llenkows@iupui.edu.