Levi Strauss Heirs Pursue a New Vision of Philanthropy

And yet, despite initiatives in community development, gay & lesbian rights, and immigration policy, large civic gestures still define the principal foundation of the Haas family. 

An unusual feature on a philanthropic family appeared in the San Francisco Chronicle.  Julian Guthrie interviewed three siblings who represent the next generation of the Haas family, descendants of Levi Strauss and heirs of the clothing fortune (brother Bob is still chairman of the corporation). 

The Evelyn and Walter Haas Jr. Fund (EIN 94-6068932 Form 990) was the focus of the article, although the family has four other large scale funds and a number of other smaller ones, as well.  To put the article about the fund in perspective, I analyzed the 634 grants that the fund reported in its 2005 Form 990, the most recent one available.  Of those, there were about a hundred that were over $100,000 and four that were over $1 million.  I took a closer look at the six- and seven-figure grants (which accounted for just about two-thirds of the $39 million in grants (including approved grants that had not yet been paid out).

As the article suggests, the fund has several key focus areas: 

• One is community development, which accounted for about $3.7 million spread over two dozen of the larger grants (plus smaller ones).  About half of that are projects relating to the Visitacion Valley in San Francisco (a neighborhood so disadvantaged it isn't  yet included in the Google street view of SF).
• Rights for gay and lesbian people is the next largest focus area: $3.3 million in larger grants to fifteen different groups.
• Then comes immigration reform: a bit over $2.0 million split among a dozen groups. 

In contrast, the four largest single grants in 2005 were:

• $5 million to the University of California Berkeley for a student athletic center (which is one payment on a $15 million challenge pledge)
• $3.3 million to the San Francisco Symphony
• $1.2 million to WETA-TV (Washington, DC) to underwrite Ken Burns' documentary on the national parks, scheduled to air in 2009
• $1.1 million for the California Academy of Sciences

These four large grants exceeded the amount that went to the focus areas.  And in the focus areas, there is no single beneficiary; rather, money is doled out to a number of groups, only of few of which are familiar names associated with their respective issues.  So the difference between the old style and the new style philanthropy is clear. 

The question is whether the new style will accomplish its objectives.  After all, there is little question that after spending $15 million, there will be new student athletic center, but after spending millions on gay & lesbian rights and immigration reform, there's no assurance of any lasting social change.  The aggregate amount of the spending is far less than what would be needed to mount a significant public relations campaign, for instance. In the case of community development, it doesn't seem likely that spending a few million on a neighborhood will be enough to achieve a lasting turn-around or a significant increase in affordable housing. 

So there is a mismatch between the ambitiousness of the goals and the amount of resources committed to them.  There is a troublesome disproportion between the amount committed to forms of entertainment (sports, classical music, and television) and human rights. 

On the subject of disproportion, the Form 990 shows another disconnect in the compensation arena.  The executive director of the Haas Jr. fund, Ira S. Hirschfield had a compensation package of $672,610 in 2005 (reported on page 101 of the 153-page form).  The next highest paid position is the Vice President of Programs, Sylvia Yee, at $266,843, less than half that of the top position.  Finance & administration vice president Michael Blake is at $204,750, less than a third that of the chief (though still an impressive salary—anywhere except New York or San Francisco).  We have already questioned the internal controls in organizations where the top position is compensated so much more than the next tier of managers. 

It's also worth noting that the Form 990 shows payments of close to $1 million to five investment advisers and custodians, and total payments related to investments at $1.3 million, which is more than all but two of the organization's grants in 2005.  The infrastructure needed to support philanthropy is expensive. 

Comments

[Anon]

Awesome analysis of the futility of the "community development" strategy. I've worked with some of the recipients of the smaller grants. The sense of being kept alive, but unable to really do the work aspired to, is constant and infuriating.

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