Betraying Norman Rockwell

When museums sell off their treasures, one jargon word is unavoidable: “deaccession”. The thing to look out for is how many other jargon words there are. As ever, more = worse.

Enter the Berkshire Museum, explaining why it’s selling off the single most valuable piece in its collection, Norman Rockwell’s Shuffleton’s Barbershop. The piece has no place in the new vision for the museum, we are told, in words of many syllables: the exact phrasing is that it does “not directly contribute to its new interdisciplinary interpretive plan”.

There’s a lot more where that comes from. After learning about “bold steps” and “moving forward” and the need to “greatly accelerate Pittsfield’s ongoing transformation,” for instance, we are told that “the new model will provide visitors with technology that allows them to interact in a variety of modalities”. And, yes, Virginia, there are renderings. Oh boy are there renderings.

Via Berkshire Museum

This certainly looks like the wholesale destruction of everything the Berkshire Museum was, and its replacement with trendy cyber-bollocks inevitably adorned with “out of order” signs.

Back in 2008, the NYT’s Edward Rothstein wrote about how even when the museum was undergoing revamps, its director always found that “the curiosity cabinet tradition is too strong to be discarded,” and explained just what kind of museum Pittsfield had been gifted:

It recognized no distinctions between the arts and sciences nor, for that matter, between the artistic heritage of Europe and nascent American art forms; it would combine world-class objects with local discoveries.

Over the years the institution’s eccentric lineaments were deepened by donations. The museum was given Nathaniel Hawthorne’s desk and a stuffed albino pheasant, a piece of the first trans-Atlantic cable and collections of local minerals. More recently, aquariums and terrariums joined the mix. When I began to visit the museum more than 25 years ago, I felt as if I were venturing into an enormous attic in which a wealthy collector was showing off his treasures…

On the second floor one of Bierstadt’s Yosemite paintings might be hanging a room away from an Egyptian mummy; a fifth-century Chinese vase might be found not far from a 19th-century plaster cast of the Venus de Milo; prime examples of the Hudson River School could be seen not far from regrettable recent acquisitions. The museum was an extraordinary “curiosity cabinet” — what the collectors of several centuries ago used to call their assembled objects — and it offered a kind of thrill that is difficult to find in larger museums.

Such venues are rare and special things – pay a visit to the John Soane Museum in London, if you don’t believe me. What’s not rare and special, on the other hand, is the kind of digital edutainment which seems to be where the Berkshire Museum is headed.

The local newspaper has certainly been convinced, running an editorial which talks in glowing terms about how “the museum’s board of trustees sought input from focus groups, consultants and various stakeholders to inform a decision to radically redesign the way the institution presents itself, its collection, and to overhaul the character of its outreach.”

The paper’s helpful conclusion? It’s all for the best if the museum’s Rockwells are “exploited as a revenue source”. Ugh.

A bit more context, this time from Charles Giuliano:

Consider the several museums in the Berkshires. The Norman Rockwell Museum in Stockbridge concentrates on aspects of illustration. Mass MoCA in North Adams presents world class contemporary art. Reflecting the collection of its founders Sterling and Francine Clark, the Institute in Williamstown primarily focuses on 19th century French painting, American art, and Old Masters. It is regarded as one of the finest small museums in America. The Williams College Museum of Art has a diverse and intense collection, a hands on resource, for a great range of academic studies. Added to the mix is the Hancock Shaker Village.

It is significant that these museums serve different mandates. They complement rather than compete with each other. All of the Berkshire arts organizations, some of the most renowned and unique in the world, meet on a regular basis. They explore means of working together and creating synergy.

In other words, don’t look at the Berkshire Museum on its own; instead, look at it as part of a group of museums which together form more than the sum of their parts. Specifically, look at the grouping as the premier place to learn from and study the work of Norman Rockwell. And, now, consider the fact that these museums are losing one of their very finest Rockwells.

The museum’s stance can be inferred from the newspaper editorial. “Realistically, with the Norman Rockwell Museum mere miles away,” we’re told, “Rockwells at a Pittsfield museum are redundant anyway.” That is untrue on its face, and I’m sure no one at the Rockwell Museum would agree with it. But even if it were true, that would only be an argument for coming to some kind of mutually-beneficial arrangement with the Rockwell Museum. It’s certainly not an argument for shipping these masterpieces off to Sotheby’s so that they can be sold to the highest bidder.

It’s almost impossible to overstate how important Shuffleton’s Barbershop is in Rockwell art history: any museum would be proud to own it, especially the Rockwell Museum. Whole articles have been written about its representation of African-American men; it was even turned into a movie, starring Danny Glover. Rockwell himself was entirely cognizant of the painting’s importance, which is why it’s so important to know what his wishes were.

Which brings me to a fact you’ll find nowhere in the Berkshire Museum’s press release: Shuffleton’s Barbershop was donated to the museum by the artist himself.

This is crucial, because Rockwell clearly believed that the painting belonged in a museum. Having decided that, he chose the Berkshire Museum. If the Berkshire Museum has now decided that it no longer wants to be in the business of owning Shuffleton’s Barbershop, then fine – it can move the painting down the street to the Rockwell Museum. What’s far less acceptable is the idea that it’s totally cool for the Berkshire Museum to remove the painting from museum ownership entirely.

Should the painting leave the Berkshires, where Rockwell wanted it to remain in perpetuity? No, it should not. But even if it does, it should be sold to somewhere like Crystal Bridges, and remain on public view.

Via Berkshire Museum

But even that is not on offer. Instead, the painting will now leave the world of museums, re-enter private hands, and be replaced with an “interpretive plan” of “thematic zones”. It’s not a good trade.

People of color aren’t managing foundations’ money. They should be.

Never let it be said that nothing substantive ever comes out of expense-account boondoggles like the Black Corporate Directors Conference. Every so often, a well-placed question can result in positive changes worth hundreds of millions of dollars.

Such was the case in 2010, when a conference delegate asked Knight Foundation president Alberto Ibargüen about how his foundation’s assets were invested. Specifically, the questioner wanted to know what proportion of Knight’s $2 billion had been placed with diverse firms, rather than companies owned and operated by white men.

Ibargüen didn’t know the answer, but promised that he would find out. After all, the Knight Foundation strongly believes in the value of diversity, so it ought to be practicing what it preaches.

The actual number was depressingly, yet predictably, tiny: Of all the people managing the foundation’s assets, only one was a person of color: a private-equity manager with less than $7 million of the foundation’s funds.

Happily, this was one of those problems where the solution is both obvious and pretty easy. The Knight Foundation’s endowment is managed by a man named Kevin Stephenson, who works for an outside vendor, Cambridge Associates. Ibargüen and his CFO, Juan Martinez, simply directed Stephenson to add more diverse managers to the roster. Stephenson, for his part, did what his client demanded, and today the Knight Foundation invests $472 million, or 22.5% of its holdings, with diverse-owned firms.

The fact that Knight uses an outside firm to manage its endowment was doubly helpful in this process. Not only did it make it very easy for the foundation to simply instruct Cambridge Associates what to do; it also forced Cambridge Associates to go out and spend a bunch of time looking at diverse asset managers who they might not have examined in such detail otherwise. Now that Cambridge has made itself comfortable with a larger number of such managers, it’s much more likely to choose them for other accounts. Which means that there’s an unknowable multiplier effect to Knight’s actions.

So far, so effective. A simple question leads to a simple decision which makes a significant difference.

But of course it didn’t end there. The Knight Foundation, having changed its own asset allocation, decided that the next step was to look at everybody else’s. To that end, it commissioned Josh Lerner, a professor at Harvard Business School, to produce an 85-page report analyzing “the representation of women- and minority-owned firms in the U.S. asset management industry”. The report begat a 14-page PowerPoint presentation lamenting that diverse-owned firms represent only about 1% of U.S. assets, as well as an entire campaign, which called itself DAMI, or the Diverse Asset Managers Initiative, which in turn has produced a 64-page fiduciary guide for other institutions looking to diversify their asset management.

DAMI is a bit of a peculiar fish: The Knight Foundation wanted a campaign, so they went to a campaign shop called Raben Group, which built them the campaign they wanted. The director of DAMI is Raben Group founder Robert Raben, and the two DAMI co-directors are also Raben Group principals.

Raben describes his shop as a place which is “particularly invested in people of color,” and as such he was probably a natural choice for Knight, as they searched for someone to create a campaign for them. But he’s not an investment professional, and DAMI campaign is hardly a passion project.

Partly as a result, the message is not well framed for its target audience. Raben is the kind of person who, quite rightly, gets upset about systemic racism, and so that’s the message he’s peddling here.

Raben’s story is pretty simple. Asset managers are hired by chief investment officers (CIOs), and if you ask the CIOs what they’re looking for in an asset manager, says Raben, “they say they only look at investment returns, they don’t look at anything else.” Raben has data which refutes that notion: there are lots of minority-owned asset managers who can boast returns just as good as their non-minority-owned counterparts. The problem is, he says, that there’s a lot of institutional racism in the field, which “rests on the bias that people of color can’t manage money well”.

The problem is that this narrative does a dreadful job of describing how the asset-management industry works, or explaining why it has so few minority-owned companies. The outcomes it describes are real, but Raben’s simply wrong about the factors which lead to those outcomes.

Take for example the central idea behind Raben’s report, which is that fund managers can and should be judged solely on their past returns. This is simply false: Indeed, when I asked Kevin Stephenson how much he looks at returns when picking a manager, he said that “in general, returns should be something you place very little emphasis on.”

After all, track records are not particularly useful things. Short track records suffer from randomness; long track records incorporate data from a time when the manager might have been much smaller, or hungrier, or able to move more nimbly for whatever reason. High returns can just be a function of the manager taking on more risk. And of course all track records are rife with selection bias.

What’s more, size matters: shops like Cambridge Associates simply don’t invest in firms managing less than $1 billion. If you’re investing the permanent funds of institutions with century-long time horizons, you’re not primarily chasing returns. Your first priority is rather going to be finding a safe institutional home, somewhere which has no chance of losing your money due to inexperience or fraud or weak controls. And while Raben is absolutely right that there’s no shortage of minority-owned investment funds, there is a shortage of minority-owned investment funds with more than $1 billion under management.

Partly, that’s just the law of large numbers. If you only have two or three partners, it’s relatively easy to be minority-owned; if you have a hundred partners, or if you’re a public company, it’s all but impossible.

So if you want to move the needle in terms of persuading foundations to invest more of their money with minority-owned fund managers, it’s, shall we say, unhelpful to point to non-risk-adjusted returns and complain that investment officers believe that people of color can’t manage money. There are definitely institutional constraints which prevent minority-owned fund managers from getting mandates, but they’re not that blatant, and mostly they’re associated with status quo bias and the desire to go with safe, large options.

Raben makes a good case that it’s important that minority-owned companies be welcomed into the investment community, and not just for the obvious benefits in terms of diversifying the ways that different parts of a broader portfolio are managed. “We believe that minority-owned businesses employ minorities, and they invest in our communities differently,” he says. “You don’t have a Dance Theater of Harlem, or an Ebony magazine, without black corporate assets: Minority businesses play a crucial role in strengthening our communities.”

Or, to put it another way: this isn’t just about helping rich asset managers get even richer, it’s about helping to grow the amount of wealth within communities of color. The asset management industry has changed a lot in recent years, and it’s now easier than ever to endow a relatively small shop with state-of-the-art risk management and compliance functions. So if foundations want to use active management, there’s no reason they shouldn’t pick their managers from as broad a field as possible. The Knight Foundation is helping that cause, even if their campaign can in places miss the mark.

Rich people giving to rich people: The good, the bad, and the very, very ugly

Rich people often target their philanthropic donations in the direction of other rich people. Warren Buffett gives billions to Bill Gates; Reid Hoffman gives millions to Mark Zuckerberg. When it’s done well (and Buffett has done it well), this can be an extremely effective exercise in allocative efficiency.

Giving away very large sums of money is difficult, after all, and some people are better at it than others. Gates has proved, at this point, that he knows what he’s doing; Buffett has no inclination to join him on that learning curve; so instead he has effectively outsourced his philanthropy to the Gates Foundation. What’s more, Buffett knows that in terms of comparative advantage, he is the investor while Gates is the grant-maker. So Buffett makes sure that Gates doesn’t invest any of his money inside the Gates Foundation endowment, and has to give away all the money he receives from Buffett every year. Smart.

The Hoffman donation I’m less excited about, just because the Chan-Zuckerberg philanthropy is as yet unproven. Hoffman’s announcement of his donation is full of vague nothings: the headline is “Symbiosis with the Biohub,” and he goes on to use lots of words like “strategic” and “leverage” and “computational”. All of this verbiage has grown out of what Hoffman describes as “many conversations with Mark Zuckerberg and Priscilla Chan” over the past few years, and while I’m sure that talking about such medicine with the Chan-Zuckerbergs makes for a lovely date night, I’m not at all sure that Mark and Priscilla are yet real experts in the fraught world of medical philanthropy. The Chan-Zuckerberg Initiative is in its very early days, and its processes and outcomes are as yet entirely unproven.

Hoffman says that he’s “pretty good at this kind of capital allocation,” and he might be right about that, although I don’t share his confidence that people who are good at capital allocation in the realm of early-stage technology companies are, mutatis mutandis, also going to also be good at capital allocation in the realm of philanthropy.

This donation, in particular, is weird just because philanthropy, almost by definition, looks for opportunities which are capital-constrained, and it’s hard to think of an entity which is less capital-constrained than CZI. Of all the very real problems facing CZI right now, “we don’t have enough money” is very, very far down the list. (Probably, in fact, further down the list than “we have too much money”.)

In fact, if I were being cynical about this, I would look at Hoffman’s donation and say that it was a sign that Reid is worried about CZI being ineffective, and feels, like the venture capitalist he is, that the best way to make sure that this organization achieves its potential is to buy himself a board seat and make sure that Zuckerberg’s money doesn’t end up utterly wasted. In that sense, throwing $20 million into a $600 million pot can be a very smart investment: for a relatively small up-front price, Hoffman can help to set the course for something which is going to become a philanthropic supertanker in the coming years.

Still, all of these individuals – Bill and Melinda Gates, Warren Buffett, Mark Zuckerberg, Priscilla Chan, Reid Hoffman – are grappling seriously with the profoundly important questions of when, where, and how to put their money to its best philanthropic purpose. And in that they are far from typical. Most of the time, when rich people give their money to other rich people’s charities, they do so in a far more self-centered and transactional manner.

Which brings me, finally, to the Eric Trump Foundation, now under investigation by New York’s attorney general.

According to Dan Alexander at Forbes, when Donald Trump wanted $100,000 of the Donald Trump Foundation’s money, he got the Donald Trump Foundation to make a $100,000 donation to the Eric Trump Foundation. Then, the Eric Trump Foundation paid $100,000 to the Trump Organization, for the use of its facilities. (Eric Trump has consistently averred that his foundation got the use of Trump hotels and golf courses for free.) As Alexander puts it:

This maneuver would appear to have more in common with a drug cartel’s money-laundering operation than a charity’s best-practices textbook. That $100,000 in outside donations to the Donald J. Trump Foundation (remember: Trump himself didn’t give to his own foundation at this time) passed through the Eric Trump Foundation—and wound up in the coffers of Donald Trump’s private businesses.

This is a particularly egregious example of something which happens every day: transactional philanthropy, or the way in which people give money to a certain charity only if they get something they personally desire in return.

Donald Trump, it seems, rapidly realized that he didn’t need to funnel his own foundation’s money into the Eric Trump Foundation in order to get his son’s foundation to start writing six-figure checks to the Trump Organization. Instead, he packed the Eric Trump Foundation board with Trump Organization cronies, ousting Eric Trump’s childhood friends along the way, and then steadily increased the amount of money that the foundation paid the Trump Organization each year. The $100,000 in 2011 was just the beginning: by 2015, the Eric Trump Foundation paid the Trump Organization an eye-watering $322,000 – much more than the open-market value for services rendered.

Meanwhile, the Eric Trump Foundation kept on bringing in millions of dollars, most of which ended up being passed through to the St Jude Children’s Research Hospital in Memphis. To a first approximation, none of that money came from the Trump family – and yet today, if you visit St Jude, you’ll find an intensive care unit with Eric Trump’s name on it.

That ICU is a classic example of transactional philanthropy: the quid (having the Trump name on the door) came in response to the pro quo of Eric Trump promising to donate $20 million to St Jude over the course of 10 years. Which, incidentally, now looks ike it’s not going to happen: pledges are all well and good, but when they come from people like Eric Trump or Alberto Vilar, they can end up failing to materialize.

So where did all those millions come from? It wasn’t from people who were particularly exercised about the cause of pediatric cancer – after all, those people could just have given their money to St Jude directly, without getting Eric Trump to do their giving for them. Instead, the money came from another quid pro quo: in return for writing large checks to the Eric Trump Foundation, rich people would ingratiate themselves with the Trump Organization and get to play golf and have dinner in luxurious surroundings.

The primary beneficiary of their money – St Jude – was clearly chosen not so much because it needed the cash (Eric Trump says he’s “not really sure” why he’s giving to St Jude rather than anybody else), but rather because it’s an entirely inoffensive cause, a household name which no one’s going to feel any need or desire to second-guess.

That said, there were secondary beneficiaries of the Eric Trump Foundation, all of which were much more clearly transactional. In one case, the American Society for Enology & Viticulture ended up with a $1,600 check while Eric Trump walked away with a copper wine still and an antique bottle washer. This is the difference between the 1% and the 0.01%: While the 1% might spend $1,600 of their own money on a copper wine still, the 0.01% spend $1,600 of money which was donated by other people to their personal foundation.

As Forbes’s Alexander notes, all of this unedifying favor-currying did have significant positive outcomes, in the form of millions of dollars flowing to St Jude’s. That might not be the most efficient philanthropic destination in the world, but it’s still a good cause which has clearly benefitted from its relationship with the Eric Trump Foundation.

In a weird way, Eric Trump is a good charity fundraiser precisely because he so intuitively understands the venality of the rich. He could have asked his rich friends to donate money to St Jude’s, and some of them would have done so. Ultimately, however, the amount he could have raised that way would have been a fraction of the amount he managed to aggregate by throwing a series of glamorous golf-course parties. Such events make effective-altruism types grimace, but they are effective in their own way.

Money is fungible, and charities can do as much good with tainted money as they can with the noblest of donations. That, in turn, means that there’s a strong incentive for philanthropic types to look the other way when money arrives for bad or ugly reasons. So there’s no reason to blame St Jude’s for anything, here. But the rest of us have no reason at all to give the ulterior-motive donors a pass. Everybody associated with the Eric Trump Foundation, including the people who attended its parties, was involved in an extremely skeevy scheme. The good news, I guess, is that thanks to the current salience of the Trump name, prosecutors are now getting involved. Political success can, it turns out, have negative consequences.

The Met museum and the curse of growth

Recently-defenestrated Met director Thomas Campbell has given a fascinating interview to The Art Newspaper, where he talks a bit about the art-architecture nexus:

We can’t go out into the marketplace to buy works of art that are $50m, $60m or $70m apiece. What we can do, and what the Met has always done, is build beautiful galleries so that donors and collectors will see us as a worthy destination. That’s what happened with our Chinese collections. We rebuilt our Chinese galleries back in the 1980s and early 1990s and, based on those beautiful spaces, we have received gifts that have turned us into one of the most important destinations for those who want to see Chinese paintings anywhere in the world.

As the slogan goes, collectors collect art, and museums collect collectors. It seems that in practice, if you’re fishing for collectors, one of the best things to use as bait is a shiny new piece of architecture.

When you’re making fill-in acquisitions to round out an existing encyclopedic collection, that strategy makes sense. You spiff up your Chinese galleries (or your Islamic galleries, or your American art galleries, or your tapestry galleries), and collectors with the museum-quality works you covet will be that much more likely to donate them to your shop rather than someone else’s. Especially if the spiffier galleries also provide a world-class level of scholarship and curation.

But when it comes to contemporary art, the calculus necessarily changes. There’s a good reason why you don’t find contemporary art in the Louvre, or the Prado, or the British Museum, or anywhere on Berlin’s museum island. Beyond the fact that it’s generally enormous and there’s nowhere to put it, the inconvenient thing about contemporary art is that, well, it’s contemporary. Every decade throws up a whole new slew of artworks, being collected by a whole new slew of potential donors. By collecting contemporary art, you essentially force yourself to grow in perpetuity.

Perpetual growth isn’t just exhausting, it’s nigh-on impossible, and what’s more it inevitably diverts attention and resources from the husbandry of your existing collection. If you improve the Chinese galleries, that benefits your entire Chinese collection; if you build a new wing to house future gifts of contemporary art, then by contrast you’re entirely neglecting your raison d’être.

The proximate cause for Campbell leaving the Met was that it was having difficulty balancing its budget: while donations were healthy, they were all too often earmarked for capital expenditures, and revenues weren’t enough to cover operating costs. (One under-reported aspect of all this is the retail apocalypse we’ve all been hearing about of late – the Met used to get a lot of money from its stores in shopping malls, but that formerly-predictable flow of funds now seems to be gone forever.)

In that context, the last thing the Met should aspire to is further growth, especially now that it has bitten off the entire Met Breuer building and is having great difficulty chewing it all. Expansion doesn’t just cost a lot of money up front, it also means higher operating budgets in perpetuity. What’s more, there’s no shortage of fantastic institutions devoted to modern and contemporary art, both in New York City and beyond.

The problem here is common to most boards: Filled with alpha types, they are used to chasing growth in the private sector, and therefore work on the assumption that growth is good in the non-profit sector as well. But they’re generally wrong about that. Once a museum reaches a certain size (and the Met is already much bigger than that size), growth pays no dividends. Better to concentrate on maximizing what you have, than on adding to it. It’s a hard lesson to learn, but a very important one.

How art begets architecture, Leonard Lauder edition

Back in 2013, when Leonard Lauder announced the gift of his world-class cubism collection to the Met, the New York Times was clear that this was about as clean and pure as such things ever get. For one thing, Lauder was quoted saying that “this wasn’t a bidding war. I went knocking, and the door opened easily.” And we were twice told that the gift came without “restrictions,” whatever that was supposed to mean.

In practice, of course, there was a contract, laying out “commitments” on both sides. And now the NYT reports that as part of the quid pro quo, the Met promised “to create a suitable home for the Lauder material” by 2025.

Lauder doesn’t seem to be holding the Met to its commitment: embroiled as it is in a fiscal crisis, there’s no way the museum can afford the $600 million that it had planned to spend on the new contemporary and modern wing which was going to house his collection. But seeing as how Lauder was knocking at an open door, why did they even make him that $600 million promise in the first place?

The answer is lying in plain sight: just look at the headline on that original NYT story, talking about “A Billion-Dollar Gift”. Sure, the gift might have been purely paintings, with no cash involved at all, but these days all giving is increasingly fungible. It’s no coincidence that art museums are popping up around the world, and existing museums are expanding, at exactly the same time as the art in those museums is becoming much more financially valuable.

Many of those museums are being built by the collectors themselves, to house their own collections. A broad range of collectors, from Eli Broad to François Pinault to Peter Brant to Giorgio Spanu and Cynthia Olnick, have decided in recent years that the best way to display their art in a museum is simply to build their own museum. Indeed, Leonard Lauder’s brother Ronald did just that, with the Neue Galerie, a stone’s throw from the Met.

The option of building one’s own museum is increasingly attractive, to collectors, for two big reasons. Firstly, you get to ensure your art gets seen, in the way you think it should be seen, rather than being hidden away in the stacks somewhere. And secondly, as collectors start paying nine-figure sums for individual paintings, the cost of building your own museum starts becoming largely indistinguishable from the cost of adding just a handful of works to your collection. If you’re going to spend billions on art, then spending a fraction of that on a museum which shows it off perfectly is entirely logical.

It’s that logic which, in turn, forces established museums like the Met to promise glorious new galleries to any donor who comes calling with a world-class art collection. Who wants to give a billion dollars’ worth of art to a museum, only to see it shoehorned in among the existing displays?

The problem for the Met, of course, is that the new building will be so associated with Lauder that it’s hard to persuade anybody else to pay for it. The new NYT article helpfully explains that Lauder “could have provided a lead financial gift for the Met addition,” but that “he did not want his name on the wing”. After all, convention has it, in museum circles, that if someone kicks off the fundraising for some grand new piece of architecture, that person gets to put their name on the architecture when it opens.

So, for the time being, the Met is going keep on kicking the tires of various billionaires, in the hope that one of them, eventually, will pay for a shiny new modern-and-contemporary wing. Despite the fact that it has much more urgent cashflow problems than that. As Robin Pogrebin says, “it’s always been easier to raise money for bricks and mortar than for operating expenses.” I guess the operating expenses are just going to have to come from non-rich museumgoers paying admission fees.

How not to give credit for malaria reduction


Malaria is both preventable and treatable, at astonishingly low cost. That’s why it’s a global tragedy to see hundreds of thousands of people dying from this disease every year.

Still, there’s good news here: The war against malaria is being fought successfully, with the help of billions of dollars from around the world, and malaria deaths are coming down.

Some of the money comes from individuals giving to places like the Against Malaria Foundation, which has raised some $129 million over the past 15 years, with substantially all of that money going to buy anti-malarial bed nets. But the overwhelming majority of the money is institutional, coming from places like the Gates Foundation, the World Health Organization, and of course the governments of the most affected countries.

At the very heart of the global institutional support for the fight against malaria, one can find the President’s Malaria Initiative, or PMI. This US organization, created by George W Bush, started by spending $30 million in 2006 and grew fast: by 2012 it was spending more than $600 million per year.

As with all such projects, coordination is key. The Roll Back Malaria Partnership and the Alliance for Malaria Prevention are the key bodies making sure that the thousands of different organizations taking part in this fight are working effectively with each other, rather than being duplicative in some areas while unjustly neglecting others. The US government component is a great example of America working extremely closely with the rest of the international community towards a common goal.

This point can’t be stressed enough, and it’s something which is understood at a very deep level both at USAID and at places like the Gates Foundation. When Bill and Melinda Gates wrote their annual letter this year, for instance, they correctly concentrated on global outcomes, rather than trying to disaggregate those outcomes so that they could take sole credit for some small part of them.

It’s entirely proper, then, that in its annual reports to Congress (the latest one is here), PMI concentrates on the official WHO estimate of 6.8 million lives saved between 2001 and 2015. That couldn’t have happened without PMI, and it’s a shining achievement for US soft power. It’s true that PMI doesn’t operate in all the countries affected by malaria, but if the system is working well, then that should be fine: it doesn’t need to. If the US works in one country and Norway, say, works in another, then everything should, in an ideal world, even out.

But now, here comes the NYT. “US Malaria Donations Saved Almost 2 Million African Children,” is the headline, about a new study which attempts to isolate and quantify the effects of PMI alone.

According to the NYT, the results of the study “debunk one of the persistent myths of foreign aid: that it has no effect because more children survive each year anyway as economies improve.”

Except if you wanted to debunk that myth, you’d surely look at the war against malaria more broadly, and make the pretty slam-dunk case that total foreign aid targeting the fight against malaria is strongly correlated, both within countries and internationally, with a reduction in its incidence.

This study didn’t do that. Instead, it looked at the difference in malaria reduction between countries where PMI is active, and countries where it isn’t. It concluded that “after adjusting for baseline differences between countries, overall time trends, other funding sources, and individual characteristics, PMI was associated with 16% annual risk reduction in child mortality.”

(The study did not, incidentally, ever try to turn that 16% annual risk reduction into total lives saved: the 1.7 million number came from one of the authors of the paper, not from the paper itself.)

I do believe and accept that the fight against malaria is more advanced in the 19 countries where PMI is active than it is in other African countries where PMI doesn’t (yet) operate. But insofar as that’s true, it’s a failure of the global fight against malaria, and a failure of international coordination. It seems weird to hold it up as some kind of glowing success.

It’s very natural to want to take sole credit for great achievements. And charities like the Against Malaria Foundation are based on that idea: if you give them $5, they’ll buy a bed net, and lives can directly be saved thanks to your donation. But the truth, at the individual-donation level and even at the PMI level, is inevitably more complicated. These kind of projects involve immense amounts of international teamwork, and it’s invidious to try to single out individual contributions and then quantify their marginal effects.

To take an obvious example: If the Against Malaria Foundation wasn’t operating in Kenya, would none of the people it has given bed nets to have bed nets today? Of course not: everybody realizes how important it is to give those people bed nets, and if one organization didn’t do it, then another one probably would.

That doesn’t mean there’s no point in giving money to the Against Malaria Foundation. It does a magnificent job! And by buying bed nets in Kenya, it frees up other organizations’ resources to fight the disease in other parts of Africa and the world. But ultimately, this is a global project, fought with global resources, which has already cost billions of dollars and which will cost billions more before the day finally comes when malaria has been truly eradicated.

It’s great to be a part of that project, even if you’re only donating a few dollars. But ultimately the amounts involved are so large that the vast majority of the money is going to have to come from governments. And even the US is but one partner in the global scheme.

Let’s have fewer attempts, then, to parcel out quantifiable disaggregated credit for the achievements already made, and more attempts to accelerate one of the most successful public-health projects of this century.

Jay Sekulow and the culture of non-profit impunity

Well, that didn’t take long. A quick timeline:

June 18: Jay Sekulow emerges as a key Trump lawyer in the Russia investigation, appearing on a round of Sunday talk shows to defend his new client.

June 27: The Guardian, with a big assist from a article dating back to 2005, publishes a brutal takedown of the way in which Sekulow has seemingly misused a pair of related charities to pay himself and his family laughably huge sums of money.

June 28: The attorneys general of both North Carolina and New York announce that they are opening investigations into Sekulow and his charities.

The investigations are clearly overdue: A good 12 years overdue, it would seem. And that’s surely a large part of the scandal here. Sekulow emerged from bankruptcy in the early 1990s and rapidly built a new career at the political wing of the evangelical movement, embracing a lavish lifestyle (private jets to golf courses, that kind of thing) and becoming a well-known TV talking head. All that politicized exposure was great for fundraising, and – at least after the article appeared – should equally have brought Sekulow to the attention of the authorities in charge of regulating non-profits.

It’s worth spelling this out. Non-profits are largely unaccountable to anybody, especially when, as in this case, the board of the charity is controlled by the family running it. As a result, the public responsibility to oversee non-profits should be taken very seriously, especially in cases where the non-profit in question has a high profile and is raising tens of millions of dollars a year in small donations. Those donors are never going to get straight answers about what is being done with their money, so the government has to.

But Sekulow bet, correctly, that he would sail on, unscathed. He has many powerful friends (he’s been associated with Pat Robertson for decades, and is deeply connected in Washington), and his charities are religious organizations, which are both politically and practically difficult to oppose. After all, religions have been spending obscene sums of money on themselves for millennia; if the government in its wisdom wants to make such organizations tax-exempt, then the consequences are entirely predictable.

What’s more, Sekulow made his graft hard to find. All non-profits have to file a Form 990, and in most cases payments of this magnitude (more than $60 million, in all, to Sekulow, his family, and his businesses, since 2000) would be quite easy to spot. But most of the payments didn’t come directly from the charity raising the money, Christian Advocates Serving Evangelism, or Case. Instead, they came from a sister organization, the American Center for Law and Justice, which tended not to advertise itself: when it raised money from individuals, it would do so using the Case name.

None of this would have been hard for a decent attorney general to discover, especially not one with a subscription. But such people have a lot on their plate, and if people are voluntarily giving millions of dollars to a charity, especially a religious charity, then, well, who is the government to second-guess them. So Sekulow managed to make tens of millions of dollars by calling lots and lots of people with very little money, and persuading them, en masse, to give him what little they had.

The crazy thing is that Sekulow and his lawyers are going to claim, with a straight face, that all of this is perfectly legal. Case and ACLJ are registered non-profits, people can donate to them if they want, and they can spend those donations in accordance with their boards’ wishes. And while I suspect that North Carolina and/or New York are probably going to be able to claim a victory here, that’s going to be difficult, time-consuming, and expensive.

Which is to say, if Sekulow hadn’t gotten involved in the all-encompassing political fustercluck that is the Trump-Russia investigation, almost certainly he would have happily kept on raking in the millions from unsuspecting small donors, without consequence. That’s a sign that the problem here isn’t just Sekulow. It’s much bigger than that.

Agnes Gund’s philanthropic innovations

In philanthropy, there’s often a tension between the glamorous causes which rich people support on the urging of their rich friends, on the one hand, and the really important if unglamorous causes which desperately need funding, on the other. For example: the social stratosphere that is the MoMA board, versus the grim nuts and bolts of the people working to reform criminal justice.

Which is why the Art For Justice Fund is so fascinating: it’s a bold attempt to imbue the issue of criminal justice with some of the prestige of the top end of the art world.

The impetus for the fund is Agnes Gund, the force-of-nature MoMA board member and long-time president who for a few years now has been regularly faced with the kind of philanthropic dilemma which could easily crop up in a philosophy grad seminar.

Specifically: Gund, the daughter of a successful Ohio banker, has more than enough money to live on, but she doesn’t have millions (let alone hundreds of millions) of dollars to give away. What she does have is a spectacular art collection, and lots of art-world friendships. How, then, to best fulfill her self-imposed philanthropic obligations?

Gund has donated more than 250 works to MoMA alone and has helped MoMA to acquire hundreds more; she has also supported and sat on the boards of countless other arts organizations. The way the things normally work in these kind of circles, Gund would hold on to her finest art until her death, at which point one of three things would happen. The art might stay in her family; it might get donated to MoMA; or it might get sold off as part of the estate.

Gund, however, has now blazed a different trail entirely. Recently, she sold her most valuable painting, a Lichtenstein entitled Masterpiece, to hedge-fund billionaire (and fellow MoMA board member) Steven Cohen. Cohen, who recently gave $50 million towards MoMA’s expansion project, paid $165 million for the work, most of which Gund passed on immediately to her new Art For Justice Fund.

The fund is very well designed, as such things go: the plan is that it will spend all of its money within five years, because the need for money now is so urgent. What’s more, it will only fund projects which can result in large-scale change to the structures and policies surrounding incarceration in America. (There will also be some “selected artistic initiatives,” but I suspect they’re going to be a rounding error in terms of total disbursements.)

But the major innovation here is just in the imagination behind the fund’s structure. Charities make bold asks on a regular basis, but I can’t think of one which would go up to an art collector like Agnes Gund and suggest that she sell her beloved Lichtenstein so that she could take the financial proceeds and put them towards criminal justice reform. That piece was hung in pride of place in her Upper East Side apartment, after all: it wasn’t some anonymous securities portfolio. What’s more, paintings are, well, paintings, especially when they’re as museum-quality as this one. They get donated to museums. That’s just how things work, in Gund-land.

So Gund deserves a huge round of applause just for reimagining the philanthropic potential of art. It’s not like MoMA desperately needs another Lichtenstein, after all. And MoMA already has a huge endowment, while the cause of criminal justice is in desperate need of funds. Besides, the Lichtenstein is probably just taking a detour on its way to MoMA: there’s surely a very good chance that Cohen will donate it there eventually. So, in these politically-charged times, Gund, who has six African-American grandchildren, has managed to execute what William Powhida says is “one of the most effective examples of ‘political art’ this year”. Better yet: In doing so, she has expanded the potential of what art can do. Today, we live in a world where the Ford Foundation’s Darren Walker can proclaim that “art has meaning on a wall, but it also has meaning when it is monetized.” That’s all thanks to Gund.

On top of that, Gund has constructed some truly amazing framing in terms of what her fund looks like to her peer group. Right now, it’s essentially an ultra-exclusive club, made up of Agnes Gund and her A-list art-collector friends. Suddenly, selling art and giving the money to charity is aspirational, in a way that it never was before. Of course there have been thousands of charity auctions of art in the past, but that’s mostly art donated by artists. What we’re seeing here is collectors embracing the idea that, especially if they own more art than they will ever have walls to display, there’s real value in just selling it off for a good cause.

This is a fantastic way of raising funds, because it effectively expands the size of the philanthropic pie. Someone might have money they have put aside for charity; they might even have their own charitable foundation. But their art is, conceptually, in a completely different bucket. It’s a sunk cost for them, and in many cases that cost is much lower than today’s present value. If that person just hands over their painting to the Art For Justice Fund, it can do an enormous amount of good work – with no cash outlay needed. And it’s not like the art is “spent”: it just changes hands, and stays just as valuable and just as important as it ever was. It’s almost like free found money.

Money and wealth and ownership are fraught things, psychologically. My own personal art collection has very little financial value, but there is one piece which is worth more than I paid for it – and more than I would ever pay for it. (I’m kinda over it, tbh.) That doesn’t mean I want to sell it. But if someone came to me and told me that were I to give it up, that would do wonders for the cause of criminal justice reform – well, that’s the kind of thing which might finally get me to part with a piece which I might have got a little bit bored with.

I’m sure my editioned work on paper, which I bought on the internet, has little if any interest to the Art For Justice Fund. Some charities are built on small donations; others… aren’t. And that’s fine. Big donations are really important! And Agnes Gund is a true innovator in terms of creating a whole new way for rich people to donate their millions. For that, she deserves a huge amount of credit.

The obvious intersection of urgent need and lasting impact

I love the formula which Jeff Bezos uses to define where he’d like to focus his philanthropic efforts: “at the intersection of urgent need and lasting impact”. His note arrives as Robert Frank, in the NYT, asks some pointed questions about Bezos’s philanthropy, and the fact that Bezos is by far the richest American not to sign the Giving Pledge.

Bezos says that he wants to be “helping people in the here and now,” which is a surprisingly rare focus for mega-scale philanthropy. Most billionaires tend to the opposite end of the charity-philanthropy spectrum, embracing ultra-long time horizons with an aim of having impact for many centuries to come. Philanthropically-funded scientific research, for instance, gave us both Norman Borlaug’s green revolution and the Pill, with almost unquantifiably enormous positive consequences in both cases. Similarly, a lot of billionaires have a tendency to fund foundations, hospitals, universities, libraries, and other quasi-permanent institutions; again, the idea is that the gift will keep on giving for decades or even centuries to come.

I’m not a huge fan of this kind of thinking. I believe that philanthropy should be front-loaded, since the clear secular trend in philanthropy is that more and more rich people are giving more and more money every year. The future is going to enjoy a massive quantity of philanthropic resources, even if we’ve already spent down all the gifts currently in existence. And on top of that, the world in general is becoming richer and healthier, which means that today’s neediest are, to a first approximation, the neediest that the world will ever see. Let’s focus on them.

The next question, of course, is how to do that. The main reason given by the very rich to move away from the charity end of the charity-philanthropy spectrum is that it doesn’t make a lasting difference. Give a man a fish and he’ll eat for a day, but he’ll still be hungry tomorrow.

Still, it’s easy to overstate this phenomenon. Give Directly and other researchers in the world of unconditional cash transfers have found that simply giving poor people a lump sum can have astonishing lasting effects: it doesn’t just disappear into short-term consumption or waste. And if you save lives, cure the sick, and house the homeless today, those people will become much more productive members of society tomorrow, improving not only their own lives but those of many people around them.

To put it another way: Every time a foundation is set up in such a manner as to retain 95% of its cash for future expenditures, spending only a bare minimum of 5% each year, the opportunity cost of that 95% is enormous, and almost certainly far greater than any reasonably foreseeable investment return it might generate.

So I have no problem at all with the fact that Bezos has not set up a personal foundation. I also have no problem with him keeping the Washington Post as a for-profit company, although presumably he could turn it into a non-profit trust any time he wanted. I do consider the Washington Post to be a philanthropic endeavor, either way: to use Bezos’s own formula, it meets an urgent need and it is having a lasting impact.

Bezos is in the fortunate position of having most of his wealth in the form of a liquid minority stake in a large public company. That means he can give away his money quite easily, without having to worry about how to sell his stock or what would happen to his control of Amazon. (Bezos has absolute control of Amazon by dint of being the visionary founder; he is utterly secure in his roles of chairman and CEO, no matter how much he reduces his stake in the company.)

My advice to Bezos, then, would be to say that the answer is pretty much staring him in the face: Sell your shares in Amazon, and give the cash to poor people. How many shares you sell, and which poor people you give the cash to, is ultimately a personal decision. Do you front-load your giving by selling most of your shares today? Or do you place your faith in an ever-rising share price which will maximize your giving if you hold on to the shares for many years to come? And in terms of which of the world’s neediest you target, will you begin at home, in Seattle? Or will you go somewhere like Kenya, where the objective need is greatest? Those are decisions only Bezos can make.

Bezos does not need to set up any kind of charitable foundation to do this; nor does he need to sign the Giving Pledge if he doesn’t want to. In terms of intermediaries, there are any number of non-profit institutions who would be happy to take care of the logistics of transferring the cash efficiently and effectively to the poor. The results would be enormous, and Bezos could even spend a bit of extra money trying to measure them, if he were so inclined. But the fact is that the intersection of urgent need and lasting impact is not hard to find. You just need to believe in the transformative potential of money. And that’s not very hard to believe in at all.

Syrian refugees vs Charity: Water

via charity: water

Charles Duhigg has a piece today which asks why you don’t donate to Syrian refugees, while you do donate to Charity: Water. The headline: “Why Don’t You Donate for Syrian Refugees? Blame Bad Marketing”.

The first thing worth noting, here, is that the premise of the article is simply factually false. Charity: Water has not yet got around to releasing its 2016 annual report, but in 2015 it raised $25.1 million in charitable donations from the public at large, and received another $10 million to support its own operations, so its total revenues were $35.1 million.

Let’s compare those numbers to the International Rescue Committee, one of many charities where people can donate for Syrian refugees. In 2015, the IRC raised $77.3 million in charitable donations from the public at large, a number which grew to $101.4 million in 2016. (The IRC’s 2016 annual report is already online.) The IRC had multiple other revenue sources too, including foundations and government contracts, which means that the IRC’s total revenues were $739.9 million in 2016, up from $691.2 million in 2015. And the IRC isn’t even the biggest charity working to help refugees: That would probably be Oxfam, which receives some $1.5 billion in donations each year.

So while Duhigg might be right that it’s statistically unlikely that you’ll write a check to help Syrian refugees, you’re statistically much less likely to write a check to Charity: Water.

More broadly, when Duhigg talks about how “one of the most important and heart-wrenching issues has so much trouble attracting donations,” he’s completely ignoring the fact that organizations like Oxfam and the IRC, for all that they are very happy to receive donations from fickle individuals, do not necessarily rely on them. Duhigg says that “people were three times as likely to donate to victims of the 2015 earthquake in Nepal or the 2011 Japanese tsunami as to those fleeing the war in Syria,” but those kind of donations are one-off things: no one is giving to victims of the 2011 Japanese tsunami in 2017. The IRC, by contrast, has found itself a predictable revenue stream of well over half a billion dollars a year, which it can spend year in and year out. That’s not my idea of an organization which has “trouble attracting donations”.

Duhigg also simply assumes that, in the words of his conclusion, “what matters most” is persuading more people to donate to Syrian refugees. But that, too, is false. The global refugee crisis is a political crisis, which requires political solutions. That’s one reason why the CEO of the IRC, David Miliband, is a politician.

Political decisions by lawmakers in Europe and America are vastly more important to Syria’s refugees than any amount of donations from the likes of Charles Duhigg. Yes, money is needed – and it is needed in multi-billion-dollar amounts which only governments can provide. But governmental refugee policies in the EU, the US, and elsewhere are more important still. A single meeting where Miliband persuades a European country to increase the number of refugees that it’s willing to admit could well matter much, much more than any number of individual donations.

Consider this: the EU has pledged $770 million to help Syrian refugees through 2018. You want to add a few more dollars to that bucket? Go ahead: they’re sorely needed. But ultimately the size of the bucket is going to be determined by political decisions in Europe’s capitals, and not by the amount that you choose to give. And of course the amount needed to help the refugees is caused in large part by the inability of refugees to find a country willing to let them in. If those policies were relaxed, the amounts needed would go down quite sharply.

Duhigg’s article is, ultimately, predicated on the idea that when there is a major problem in the world, that problem can effectively be addressed through individual charitable donations. That’s not generally true, and it’s certainly not true in the specific case of Syrian refugees. Sometimes, a problem is so big that only governments can really address it. And this is one of those problems.