The New York Times
Wednesday, December 17, 1996, Page A1
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With Big Money and Brash Ideas,
A Billionaire Redefines Charity
A GIVER'S AGENDA
A special report.
By JUDITH MILLER
At the peak of a storm last
February, several of the nation's most gifted philosophers and political scientists met
for a weekend at the Westchester County estate of George Soros, the Hungarian-born
billionaire financier. As the wind rattled the windows, Mr. Sores raised a glass in
honor of his guests and gave them a challenge: If they were to advise him on how to spend
more money each year than the Ford Foundation does on philanthropy, much of it in the
United States, what would they suggest?
"It was an astonishing session, as well as
the most expensive philosophical tutorial anyone has ever had," said Alan Ryan, at
the time a professor at Princeton and now the warden of New College at Oxford.
The philosophers' weekend debate, one of
several "Sores retreats," as one participant called them, was pivotal in shaping
the latest phase of Mr. Soros's extraordinary philanthropic career. For after
spending $1.1 billion, most of it since 1989 trying to transform the former Soviet bloc
into thriving capitalist democracies, or what he calls "open societies," Mr.
Soros, deeply concerned that America's own open society is eroding, is bringing his
philanthropy home. Along the way he is shaking up the philanthropic world."
A man who often seems to donate millions on
impulse, Mr. Soros plans to devote half his annual giving -- more than $350 million last
year, almost all of it overseas -- to five domestic issues: immigrants' rights, death and
dying, drugs, education, and criminal justice. While other foundations and
philanthropists are more comfortable healing the sick, housing the poor or feeding the
hungry, Mr. Soros is unabashed in pursuing a political agenda.
Almost single-handedly, for instance, Mr. Soros
financed successful ballot initiatives this fall in Arizona and California to permit the
use of marijuana for medical purposes. The support brought furious criticism from
many conservatives, government officials and drug experts, who called it an arrogant
social experiment that they fear is a disastrous first step toward full legalization of
marijuana and other drugs.
But Mr. Soros, who amassed most of his net
worth of $2 billion by taking huge risks in the currency and other financial markets, is
undaunted by any fury. He says the philosophers' weekend reinforced his
determination to greatly increase his domestic giving -- since 1994, he has committed $90
million -- out of concern that the conservative drift in the United States has bred
indifference to genocide abroad and to suffering and injustice at home.
"The core of an open society is under
attack in our laissez-faire society," Mr. Soros said in an interview, adding that he
wanted to foster debate about divisive issues.
His giving has inspired comparisons to an
"George Soros is the only American who
rivals the great philanthropists of the 1890's -- John D. Rockefeller Sr., Andrew Carnegie
and Julius Rosenwald," said Nelson Aldrich Jr., the editor of The American
Benefactor, a quarterly, and who is himself a cousin of the Rockefellers.
Alfred Stepan, who helped found the Central
European University, a $55 million Soros project in Budapest, noted the scale of Mr.
Soros's philanthropy, "if you rank a donor by assets, Soros is nothing said Mr.
Stepan, a fellow at All Souls College at Oxford -- the Ford Foundation, for example, which
committed $342 million in 1996, has assets estimated at $8 billion. But, Mr. Stepan
added, "if you measure it by dispensed gifts, especially in proportion to income,
Soros is the world's single largest donor. Individual or foundation."
More than sheer numbers make Mr. Soros stand
"Soros is successful because his giving is
openly political and daring," said David Rieff, a writer who serves on one of Mr.
Soros's boards. He is determined to use his money to change the nation's social
agenda and is tough-minded about achieving his goals."
Mr. Soros, 66, never tires of
expounding, in his Hungarian accent, often arcane theories about how the world works -- a
"failed philosopher," he calls himself. He studied under Sir Karl Popper,
whose philosophy of "Open Society," a critique of Marx and other proponents of
historical determinism, deeply influenced his thinking. Of slight build, well
tanned, with silver hair, wire-rimmed glasses and expensive suit, Mr. Soros would not
stand out in a room of multimillionaires as a multibillionaire.
There is only a hint in his deliberately calm
tone of the toughness of someone who escaped the Nazis as a Jewish adolescent in Budapest
and immigrated to the United States in 1956 to found an off-shore investment fund known
today for its financial brinkmanship and unparalleled success. Having
"broken" the Bank of England in 1992 by betting that Britain would devalue the
pound, Mr. Soros exudes confidence -- arrogance, some detractors call it -- a quiet
certainty that his self-made wealth makes him worthy of being listened to.
None of his giving has created more fury than
his support for a new approach to drug policy. Conservative critics say that in the
guise of fostering debate about politically charged issues, Mr. Soros is trying to impose
his liberal and misguided policy agenda on an unwitting public.
Public records show that since 1993 he has
donated some $15 million to foundations and groups that favor changing the nation's drug
policies. Ethan A. Nadelmann, head of the Lindesmith Center, a New York City
institute founded in 1994 with Mr. Soros's money and budgeted for $828,000 in 1996, has
called for legalization of marijuana and other drugs.
In addition to this charitable, or tax-exempt,
support, he donated more than $1 million to the ground-breaking state ballot initiatives
on drug laws in California and Arizona, contributions that are not tax deductible.
Both measures were over-whelmingly approved by voters in November.
California's new law allows marijuana to be
grown and used by anyone, even a minor, with an oral recommendation from a doctor to treat
"any other illness for which marijuana provides relief." Arizona's measure
allows doctors to prescribe any of 117 banned drugs, including marijuana, LSD and heroin,
for a "seriously ill or terminally ill patient." It also releases
prisoners serving time for personal possession of drugs.
"Neither initiative would have made it on
the ballot were it not for George Soros," said Stu Mollrich, a consultant to the
California measure's opponents. Three former Presidents, senior Clinton
Administration officials, state law enforcement officials and prominent drug and medical
experts opposed one or both measures.
But Mr. Soros expresses no regrets and says he
is ready to support similar initiatives in other states. Denying that he favors
across-the-board legalization of drugs, he claims to support "rational debate"
about what constitutes a "saner drug policy." Since a drug-free America
"is an unattainable dream, our policy should aim at reducing harm connected with
drugs." Specifically, that means "saving our jails for violent criminals
and predatory drug dealers, not nonviolent drug addicts willing to undergo treatment or
the occasional marijuana smoker," he said.
That has not persuaded some drug-policy
experts, who said Mr. Soros had given money not for debate, but to weaken drug laws.
Herbert D. Kleber, vice president of the
National Center on Addiction and Substance Abuse at Columbia University, said that while
Mr. Soros was "playing around" with the idea of legalization of drugs,
"people will die from it."
Mr. Soros dismisses such criticism, arguing
that drug policy is surrounded by "hysteria, passion and extremism." When
it comes to drugs, he said, "even our politicians have become extremists by trying to
cater to popular sentiment which has been whipped up and exploited for political
Mr. Rieff, the writer, said that Mr. Soros's
lifetime of struggle against often deadly adversaries had made him impervious to such
attacks. "If you've fled the Nazis, fought the Communists and battled your way
to the top of the West's financial markets, a nasty column about you in a newspaper is no
big deal," Mr. Rieff said.
Aryeh Neier, the human rights
advocate who is Mr. Soros's closest adviser and president of the Open Society Institute,
the nonprofit foundation that supervises much of Mr. Soros's domestic giving, attributed
Mr. Soros's shift in focus partly to his dismay at America's failure to "seize the
revolutionary moment" offered by the fall of the Berlin Wall and collapse of the
Soviet Union -- he felt the country should have poured money into supporting democratic
impulses in the former dictatorships, Mr. Neier said. Then came the genocide in
Yugoslavia, with a belated American response. (Mr. Soros gave $50 million in late
1992 to help alleviate the suffering of Bosnia's tormented civilian population.)
Mr. Sores was further "repulsed," Mr.
Neier added, by the "Gingrich revolution," the triumph of conservative
Republicans in the 1994 Congressional races, which symbolized for Mr. Soros the state's
abandonment of its obligations to citizens, particularly the poor and immigrants.
And finally, Mr. Soros said, he was worried about the extent to which "market values
and excessive individualism" were permeating the professions of medicine, law,
journalism and politics, turning them into businesses rather than callings.
Mr. Soros has shown little interest in
achieving political change through traditional channels. He gives relatively little,
by his standards, to candidates or major parties. His largest contribution this year
was $100,000 to the Democratic National Committee, plus a total of $5,000 to three Senate
candidates and $500 each to 25 Congressional candidates. mostly Democrats and a few
Nor does he assume that his giving will insure
political influence. "I can already see the President if I want to," he
Rather, Mr. Soros, like most philanthropists,
seems to know that his charitable contributions can provide even greater prominence and
Yet although he has written that he indulges
his "messianic fantasies" through his giving, he is shrewd and sensitive enough
to the rules of democracy not to try to impose his views directly. Instead, he uses
his money to foster debate about his agenda, hoping that an educated public will agree
So Mr. Soros, advised by Mr. Neier and Gara
LaMarche, both veterans of the Human Rights Watch organization, directs his spending to
wide-ranging grassroots projects that he hopes will help transform the nation's political
culture and protect Americans from what he calls "unintended consequences" of
bad government policy. There is variety in subject and amount:
* A $50 million commitment to the Emma Lazarus
Fund, a project started in September to help legal immigrants attain full participation in
American society. Mr. Soros described the grant as a spontaneous response to his
"outrage," as an immigrant, over the recent law denying legal immigrants several
types of public assistance and benefits.
* A $15 million commitment for three years to
the Project on Death in America. The effort, headed by Kathleen M. Foley, a doctor
and senior pain specialist at the Memorial Sloan-Kettering Cancer Center in New York,
supports projects that enhance comfort, dignity, care and relief from pain for the
dying. Mr. Soros says he is trying to end America's "denial of death."
* A $12 million commitment over three years to
the Algebra Project, which seeks to improve mathematics skills of rural and inner-city
public school students throughout the country.
* The creation last spring of the Center on
Crime, Communities and Culture, headed by Nancy Mahon, a 32-year-old expert on
prisons. She has already awarded $1.4 million in grants to more than two dozen
groups to support projects like prison guard training and research on the effect of film
and television on individual and community perceptions of crime.
The Open Society institute board approved in
principal over the week-end $7 million more for criminal justice as part of $50 million in
new pledges for 1997. Mr. Soros's domestic giving is increasing exponentially --
from $15 million this year to what Mr. Soros says will eventually be more than $100
million a year. Until recently, less than 10 percent of his annual giving was spent
To See It Through?
Few grant-makers challenge
the unorthodox nature of some of Mr. Soros's giving or his usual lack of support for
either Jewish causes or traditional philanthropy. But some of his critics wonder
whether he can sustain his interest in a domestic agenda.
A fellow foundation director remarked on Mr.
Soros's intellectual restlessness. "He focuses on something and then moves
on," said the grant-maker, who spoke on condition of anonymity. "And he
likes to see results quickly. He has now chosen areas where it's hard to see results
quickly. Does he have the staying power?"
Mr. Soros says he does. As evidence, he
points to what foundation officers call the "professionalization" of his giving,
or its institutionalization. Last year, for example, Mr. Soros published the first
comprehensive annual report ever on his foundations' projects. Mr. Neier and Mr.
LaMarche, both highly regarded professionals in the foundation community, have insisted on
strict budgets and project evaluations.
"Soros has not surrounded himself with yes
men," Mr. Rieff said. "They talk back; they disagree. And they are
running the projects, not George."
His failures abroad also reinforced the need
for greater structure and accountability, he and his associates say. His Russian
foundation, for example, has undergone three reorganizations since Mr. Soros learned that
much of its budget was diverted into Swiss bank accounts and luxury cars.
The new emphasis on American philanthropy has
resulted in an expansion of the Open Society Institute's American staff, to more than 160
employees today from 64 in 1994. But the staff is still lean by foundation
standards, and its members are not as well paid as their philanthropic counterparts.
The foundations' offices on 57th Street overlooking Central Park and Carnegie Hall -- in
the same building as Mr. Soros's business offices -- are spare.
"Why would we take pay cuts and smaller
offices to come to work for a billionaire?" Mr. LaMarche said. "Because of
the chance to do truly creative, risky giving."
Some question whether Mr. Soros, whose charity
finances 50 offices and employs more than 1,000 people worldwide, is starting up too
quickly and spreading himself too thin. That was a concern, Mr. LaMarche
conceded. "But all these issues are inter-connected and must be addressed
simultaneously if we are to see results," Mr. LaMarche said.
Mr. Soros hopes that his giving will prompt
other foundations to support such risky projects and research. He said he knew that,
like some of his early projects in Eastern Europe, China and South Africa, some American
projects may fail.
"I don't have all the answers," he
said. "But I know what questions to ask. And after all, I can't take it