In the Spotlight

News & Features
Make Change, Not Money
Part 3: Family Philanthropy
By American RadioWorks
September 3, 1998

HISTORIAN DANIEL BORRSTIN CALLS BENJAMIN FRANKLIN the patron saint of American philanthropy. Franklin created a number of pioneering nonprofit enterprises, from the first public library to a volunteer fire department. Unlike his European peers, Franklin didn't care about doing good for its own reward. No, he wanted to solve community problems.

University of Chicago Historian Barry Karl says that impulse remains strong.

Karl: The major idea, which is that there has to be an emotional commitment on the part of local communities to the giving process, to what is being done for citizens, by citizens, is really in this country such a tradition. It's really unmistakably essential to the way American society operates.
In the San Francisco Bay area, it's not too much to say that philanthropy is part of the social fabric. A hundred and fifty years ago, miners descended on California in search of gold. A merchant named Levi Strauss showed up around the same time. The blue jeans company he founded is now the largest garment maker in the world.

Today, his descendants control a cluster of family foundations big enough that they could easily spread their charitable money nationwide. Instead, the family focuses on the Bay Area. Keeping closer to home is a strategy a growing number of nonprofits are embracing as the federal government returns more power to states and localities. But in San Francisco, some worry that too much is being asked of local philanthropy and too little of local government.

The Tenderloin Child Care Center is located in the heart of downtown San Francisco's poorest neighborhood, a place of rundown hotels, porno theaters, old apartment buildings, and bars. The center occupies the ballroom of a residential YMCA, and Graham Dobson is the program director.

Dobson: Our goal is to work beyond what goes on with the child, but also to work with the families to enable them to get the most out of what they have and to move forward, whether that be employment, school, looking for permanent housing.
The center cares for 36 youngsters, a third of its enrollment reserved for children from homeless families. Many children attend free. The center has a prominent and generous ally, the Miriam and Peter Haas fund, one of the half dozen Haas family charitable foundations set up by the heirs to the Levi Strauss fortune.

What's unusual about the Haas family's support is that the center never asked for the money. Instead, the staff of the Haas fund sought out the center. The Haas family's methods are extraordinary, but it's also striking that one family created so many foundations aimed at just one limited geographical area, in this case, the San Francisco Bay region. Unlike the Ford Foundation and the Rockefellar Foundation, which are national in their scope, the Haas funds are perfectly happy to do their work in one place. If there's a trend here, it's that other foundations are also focusing their efforts in their own back yards.

Across the Bay at the University of California at Berkeley, construction is under way on a new building for the school of public policy. Haas family money is paying for that. The Haas foundations have contributed around $50 million to the university just for new buildings.

Claude Rosenberg, author of a book on philanthropy titled "Wealthy and Wise", and an acquaintance of many Haas family members, says Levi Strauss has always been a model of corporate behavior.

Rosenberg: And we're just fortunate in the San Francisco Bay area to have benefited from a company, and the owners of that company, who did not place making the top dollar as being the number one responsibility at all times.
As Levi Strauss' shares have grown in value, so have the assets of the Haas Family Funds. But California's taxpayer revolt of the 1970s began a reengineering of public finance in the state. Public moneys for arts, education, and social services came under intense pressure. Marshall Kilduff, editorial writer for the San Francisco Chronicle, says the trend of tighter public purse strings and looser philanthropic ones poses a policy question that will eventually have to be faced. He argues that some social programs should squarely be the responsibility of government.

Kilduff: The state government, city government, and certainly the Feds are not pouring as much money into cultural or social activities, which in many cases the Haas family and other like them are doing.

It would be bad policy for private foundations to try to take up the slack for shrinking public spending, according to Ralph Kramer, a retired Berkeley professor of social welfare, and one of the pioneering scholars in the study of not-for-profit corporations. He says since the Reagan years, there's been a trend toward privatization of public responsibilities.

Kramer: Part of the ideological push in support for privatization is the assumption that government either never was able to do anything right or has become inept and doesn't deserve the kind of support it once had.
As long as the stock market is robust, politicians can sidestep the unpopular task of asking for new taxes. But when stocks begin to fall, Kramer warns, the government won't be able to turn to foundations to provide a bailout.

Kramer: These organizations are rarely engaged in picking up the pieces after governmental budgets are slashed. That's a grievous error, because they are not engaged in providing direct assistance for example.

Today the fund that bears the name of Evelyn and Walter Haas Jr. is the biggest of the Levi Strauss foundations with more than $400 million in assets. The director of programs, Sylvia Yee, says the Haas family sees its role as a catalyst for public participation and not a substitute.

Yee: We, as private funders, can help to enhance the effort, by helping give some startup money, by helping with the planning and technical assistance to ensure that there is real quality in growing these kinds of neighborhood institutions. I think our trustees would be terribly unhappy if they really thought that that we were displacing what the public should be doing.
With a family of such wealthy and motivated benefactors, public officials in the Bay Area, in effect, have their own social safety net. But it's only as reliable as the stock prices on Wall Street. If retrenchment should ever hit the portfolios of the Haas Family Funds, many Bay-Area communities and educational institutions now dependent on foundation support could face a rude awakening.