Philanthropic Leverage

Matthew Bishop
MATTHEW BISHOP, New York Bureau Chief of The Economist and co-author of Philanthrocapitalism: How Giving Can Save the World

There is a certain sort of philanthropist who funds buildings to gain the immortality that comes from having his or her name carved in stone above the door. Chuck Feeney is not one of them. A lack of fanfare has been one signature theme of his giving, even if he has been persuaded to abandon his preferred anonymity in the interest of transparency. Yet so, too, has been putting up buildings, which has accounted for approximately one third of the $6.8 billion or so his foundation has given away over the past three decades, mostly through The Atlantic Philanthropies.

Clinics in rural Viet Nam; health centers in schools in Oakland, California; a hospice in Cork, Ireland; and the Nelson Mandela Gateway to Robben Island in Cape Town, South Africa, have all benefited from Mr. Feeney’s largesse. University buildings, in particular, are to Mr. Feeney what libraries were to Andrew Carnegie: the most tangible evidence of a bold and transformational approach to giving whose impact extends far beyond mere bricks and mortar.

The echo of Mr. Carnegie is no accident. “Wealth,” which the steel magnate published in 1889, has been a source of inspiration to Mr. Feeney throughout his philanthropic journey. He has heeded the call for the successful businessman to give most of his money to good causes during his lifetime. Giving to fund buildings has played a crucial role in these meaningful efforts, not least because the best building projects are among the most effective ways to deploy large sums of money quickly while delivering benefits to society that can continue to flow for many decades.

In our book Philanthrocapitalism: How Giving Can Save the World, Michael Green and I describe the growing movement of entrepreneurial, impact-oriented donors whom we call philanthrocapitalists. These are philanthropists who bring to their giving the same can-do spirit and thinking that helped them prosper in business. (As Mr. Feeney put it in his Giving Pledge letter, “In business, as in philanthropy, I have always sought an independent, strategic edge where potential is often greatest, as well as opportunities that I can understand and to which perhaps I can contribute personally.”) In the book, we describe Mr. Feeney’s gifts to universities, in particular, as “probably the greatest example of philanthrocapitalistic giving to higher education” by the current generation of donors. This is because he has understood how the right building in the right place can be used to leverage large additional sums of money from other sources, including fellow philanthropists and government.

One way in which today’s philanthrocapitalists differ from Mr. Carnegie and his peers is that even the largest personal fortune nowadays is tiny compared to the budgets of governments, multilateral agencies and multinational corporations, and, often, compared with the size of the problems they are trying to tackle. Unless donations are used to leverage other money to join the cause, philanthropic dollars are unlikely to stretch far enough.


Mr. Feeney’s gifts of buildings have shown him to be a master in the art of philanthropic leverage. University facilities, of which many have been built or upgraded with his foundation’s money as far afield as Australia, the United States, Ireland, Viet Nam and South Africa, are in some ways an inherently leveraged gift, because they help unleash the human capital of the researchers and students who work in them. Mr. Feeney emphasizes the impact buildings can make in people’s lives. But not all buildings are equal, even university buildings. Over time, Mr. Feeney and his colleagues at The Atlantic Philanthropies have become increasingly adept at achieving leverage by identifying when a physical infrastructure can help lift an impactful institution or organization to a higher level of impact and how to use it to recruit other funders and even drive systemic change. In this sense, investing in buildings is really about betting big on the people who will lead and make use of them, through personal engagement, often over many years. Mr. Feeney has come to know well and believe in these people as forces for good.

His initial giving for buildings at Cornell University, which has now received $1 billion of his fortune, was driven more by gratitude to his alma mater than by a coherent long-term leverage strategy. Contrast that with his foundation’s recent $350 million gift to help build Cornell’s applied technology campus on Roosevelt Island in New York’s East River, which was accompanied by significant matching grants from government and other donors, as well as an impact assessment forecasting that the new campus would create an estimated 20,000 short-term construction jobs, 38,000 permanent jobs and 600 spin-off companies, as well as generating more than $23 billion in economic activity and $1.4 billion in additional tax revenues in its first three decades.

As Mr. Carnegie would not provide the capital to build a library until the community where it was to be located committed to paying for its ongoing operating costs, so has Mr. Feeney increasingly given on condition that others join him in doing so. Among other things, this requirement provides a useful market test of whether a building is a genuinely useful investment rather than a rich man’s folly. Typically, Atlantic’s support of buildings has generated three times as much in matching funds, though in some cases the multiple has been far higher.

This strategy really took off in 1997, when Mr. Feeney decided to add to his already substantial giving to universities in Ireland and Northern Ireland. On the grandest scale, this was born out of his belief that a strong economy would promote peace and reconciliation among the island’s divided communities, and that developing a knowledge-based economy was the best strategy for attracting international companies and the better jobs that would come with them.


Having initially funded building at Irish universities such as Limerick and now convinced that the time had come for Ireland to get serious about postgraduate research, Mr. Feeney and his team at Atlantic entered into direct negotiations with the government over a match funding deal. The result was an initial public- private partnership to boost this research, which has gone on to provide approximately 100,000 square meters (1.1 million square feet) of new research facilities, 46 research institutes or programs, 1,000 research positions and 1,600 new postgraduate positions. The €178 million ($262 million) given to this scheme by Atlantic has leveraged more than €1.1 billion ($1.3 billion) in matching spending by the Irish government. This success did not come easy. Indeed it required that Mr. Feeney behave like a hard-nosed businessman in his philanthropy. When, in 2002, a newly elected government tried to wriggle out of its commitments, Mr. Feeney made it clear that Atlantic’s money would stop flowing unless the government honored the original agreement. Rightly sensing that he was serious, the government did the right thing and the project was soon back on track.

Mr. Feeney’s relationship with the University of the Western Cape (UWC) in South Africa is another great example of the art of leveraging buildings. After the end of apartheid, 85 percent of the school’s students were black and poor. To retain and attract leading scientists and students, and establish UWC’s reputation as a serious research institution, Atlantic invested in a state-of-the-art Life Sciences Building, which has helped UWC become ranked by the South African National Research Foundation as first in research impact in biology and biochemistry, molecular biology and genetics, and physics. As a condition of the funding, the government of South Africa matched Atlantic’s grant, ending a 15-year moratorium on spending for higher education infrastructure. This seems to have turned on the spigot of investment in higher education by the government, which has since provided all its universities with a further ZAR6.9 billion ($880 million) for infrastructure. Not a bad return on Mr. Feeney’s ZAR190 million.

Similarly, as his involvement grew with universities in Queensland, Australia, he saw the opportunity to develop a biotech industry where none existed. The A$102.5 million ($61 million) Atlantic provided for three buildings in Queensland—the Translational Research Institute, Queensland University of Technology and Queensland Institute of Medical Research (now QIMR Berghofer Medical Research Institute)—was the single largest philanthropic gift to higher education and medical research in the history of Australia. In partnership with government, it has led to the construction and expansion of many additional university and medical research institutes.

Ironically, Mr. Feeney’s purposeful efforts to avoid placing his name on buildings has made it easier for the recipient institutions to seek complementary funding with the prospect of naming rights. So Cornell’s New York City campus will be the Joan and Irwin Jacobs Technion-Cornell Innovation Institute, whilst buildings that Mr. Feeney helped fund at the University of California, San Francisco, include the UCSF Betty Irene Moore Women’s Hospital, UCSF Benioff Children’s Hospital and UCSF Bakar Cancer Center.

Mr. Feeney has also achieved leverage outside the university sector. In Viet Nam, Atlantic has been investing in improving community primary health care, including funding the construction or renovation of more than 940 local commune health centers. The $259 million of Atlantic’s money deployed in Viet Nam’s health care system since 1999 has secured $690 million in matching funds from both national and provincial governments and other donors. A less direct way of leveraging government funding has been exemplified by Atlantic’s Elev8 initiative—a flexible, full-service community school model that includes school-based health centers in Baltimore, Chicago, Oakland and the state of New Mexico that has received more than $100 million from Atlantic since 2006. Advocacy efforts led by the School Based Health Alliance, another Atlantic grantee, have helped to secure more than $200 million for school-based health center construction throughout the United States.

Buildings have also been at the core of Mr. Feeney’s efforts to leverage goodwill and collective memory to promote peace and reconciliation in divided societies. In this respect, even building a place where people of different backgrounds can have fun together, such as the Millennium Forum Theatre and Conference Centre in Derry/Londonderry, Northern Ireland, can have an impact far beyond what goes on within its walls. Investing in the Nelson Mandela Gateway to Robben Island, the expansion of the District Six Museum (memorializing 60,000 inhabitants who were forcibly removed from their homes in a racially mixed area of Cape Town during the 1970s), and restoration of Johannesburg’s Old Fort at Constitution Hill (turning the Old Fort prison into a museum about the struggle against apartheid) were part of a “memory portfolio” strategy based on the belief that preserving historic sites—which the government did not consider a priority at the time—would keep alive memories essential to the process of societal healing in South Africa and provide a permanent reminder of the importance of democracy.

As Mr. Feeney begins to pass the philanthropic baton to the next generation of philanthrocapitalists, the lesson they should learn is that even traditional forms of giving such as putting up buildings can be leveraged into massive social impact—especially if you don’t insist on putting your name above the door.

— MATTHEW BISHOP, New York Bureau Chief of The Economist and co-author of Philanthrocapitalism: How Giving Can Save the World