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Reprinted from the Spring 2017 issue of Philanthropy magazine (PhilMag.org) istockphoto.com / OSTILL istockphoto.com 40 PHILANTHROPY Human kindness and charitable success aren’t necessarily linked. That’s one of the paradoxes of philanthropy. By Grant Smith Kindly donors with sterling characters and good intentions don’t always yield good charitable results. That’s one of the fundamental realities of philanthropy. quality can make our society better, as the following What’s rarely pointed out is the reverse. eight examples show. Uninspiring—even deeply unlikeable—donors sometimes produce amazingly powerful results. Charles Yerkes Some of our country’s most consequential giving A business prodigy who opened his own brokerage was advanced by an all-star assortment of human firm at age 22, Charles Yerkes made his first fortune train wrecks. trading public bonds. At the end of the Civil War The introduction to The Almanac of American he became a financial agent to Philadelphia’s City Philanthropy cites J. Paul Getty, Russell Sage, and Treasurer, speculating with public monies in the Leland Stanford as examples of givers who pulled dizzying post-war markets. As was the custom of the off huge good works for not-so-good reasons, time, a considerable portion of the massive returns and notes that part of the magic of the American he racked up with taxpayer money went straight into charitable mechanism is that you don’t need to be the pockets of local political leaders—and Yerkes’s an angel to succeed. The genius of our philanthropic too. But the Great Chicago Fire caused a financial tradition is that it takes people just as we are—kind panic and wiped him out. Unable to make payments impulses, selfish impulses, confusions and wishes he owed the city, Yerkes was convicted of larceny and vanities of all sorts swirling together in the usual human jumble—and it helps us do wondrous things, Grant Smith is the pseudonym of an executive at a despite our flaws. Even donors of dubious moral large foundation. SPRING 2017 41 and embezzlement and sentenced to 33 months of hard labor in the dreaded Eastern State Penitentiary. Yerkes tried to secure a pardon by blackmailing several prominent politicians. The effort failed, but his allegations were serious. Fearing their potential repercussions on the 1872 elections, President Grant intervened. Yerkes received his pardon on the condition that he retract his accusations. Seven months into his sentence, he walked out of the prison gate. After obtaining a quickie divorce in the Dakota territories, Yerkes acquired a 24-year-old trophy wife and moved to Chicago, where he made his next fortune in municipal public transportation. By When real-estate mogul Leona Helmsley was convicted of 33 tax-related felonies, spectators in the means fair (massive borrowing) and foul courtroom cheered for joy. But today, the medical patients and others served by her billions in giving are (blackmail, bribery), he methodically the ones cheering. acquired one street railway after another. Eventually exhausted by his adventures of history’s most consequential supporters investors in New York City, and shortly in Chicago’s bare-knuckle politics, of science. after meeting Leona he offered her a Yerkes later moved to England and led position as senior vice president. Shortly a massive expansion of the London Leona Helmsley after they began a torrid affair. In 1971, Underground. He died five years later, Leona Helmsley may have been the face Harry left his wife of three decades mistress at his side. of a luxury hotel empire, but her hauteur to marry Leona. Together they built In his will, Yerkes made provision for was the stuff of late-night comedy. When a massive real estate and hospitality two magnificent institutions. He donated she was convicted of 33 tax-related empire worth $5 billion at its peak. Their his extensive art collection (he was the felonies for billing the costs of a home holdings included the Empire State first American to acquire a Rodin) and renovation to her company, and sentenced Building, the Flatiron Building, and a his elegant home on Fifth Avenue for a to four years in prison, spectators in the nationwide chain of 30 hotels, including public gallery. He also allocated funds to courtroom broke out in cheers. When she the St. Moritz, the Park Lane, and the create a charitable hospital in the Bronx, died in 2007 and left $12 million to her Helmsley Palace. “opened to the public without regard beloved Maltese terrier, the dog received Leona’s exacting standards and to race, creed, or color.” Unfortunately, death threats. mercurial temperament earned her a debt finally caught up with Yerkes, and It was an unexpected ending to nasty reputation. Her lavish lifestyle creditors claimed the majority of his a life that began with much promise. became fodder for Manhattan gossip estate, so the home and art had to be sold, Leona Mindy Rosenthal grew up columnists. Her reluctance to pay and plans for the hospital were scrapped. in Brooklyn, the third child of an contractors for their work ultimately Yet the string puller did leave immigrant Polish milliner. She led to release of the false invoices that behind one massive philanthropic dropped out of college, married (and sparked the tax-evasion charges. Harry accomplishment. In what he admitted divorced) three times, and eventually was too ill to stand trial, but Leona was an attempt to burnish his image, entered real estate. She was tough and ended up serving 18 months in prison. he pledged $300,000 in 1892 so the plain-spoken. Through force of will, In her final years, Helmsley became newly founded University of Chicago she became one of the most successful increasingly committed to philanthropy, could build what was then the world’s agents in Manhattan, with a specialty making gifts of $25 million to New York largest telescope. The Yerkes Observatory in brokering conversions of rental Presbyterian Hospital, $5 million to integrated observation equipment with apartments into co-ops and condos. the victims of Hurricane Katrina, and on-site laboratories, marrying astronomy Accounts differ as to how Leona met $5 million to the families of firemen with earth sciences. It became a nonpareil Harry Helmsley, but it’s clear she made killed on September 11. When she died research facility, and the birthplace of an immediate impression. Harry was in 2007, most of her estate went to the modern astrophysics, making Yerkes one among the most successful real-estate Helmsley Charitable Trust. Today the / Contributor gettyimages / Donaldson Collection 42 PHILANTHROPY trust has a corpus of $5.5 billion, and has already awarded more than $1.1 billion in grants for medical research, education, and local nonprofits serving Israel and New York City. Its reputation among biomedical researchers is second to none, matching the unapologetic perfectionism of its benefactor. John MacArthur Hetty Green John MacArthur was medically discharged from the One of the greatest business minds of the Gilded Navy in 1917 for “dementia praecox,” a diagnosis Age was a woman named Hetty Green. Born into a that today might be called schizophrenia. On a good wealthy Quaker family, she invested her inheritance day, he was one of the world’s greatest salesmen. brilliantly. Avoiding speculation, she sought and It’s somewhat ironic that such an absurd found value in stocks, bonds, mines, railroads, and risk-taker made his fortune in the insurance especially real estate. When markets panicked, she business. At a time when the life-insurance kept her head, thus building riches that, by one industry’s cheapest plans started at $10 a month, calculation, would place her somewhere between MacArthur sold policies for $1. In his early years, he Warren Buffett and Bill Gates today. was slow in paying benefits, and barely stayed ahead Not that she ever enjoyed any of this. Tales of of state and federal regulators. He steadily bought Green’s miserliness are legion. She wore the same outfits, day in and out, until they were little more than rags. Her daily lunch consisted of The genius of our philanthropic oatmeal, which she unceremoniously heated on an office radiator. She raised her two children in tradition is that it takes people just as a series of shabby apartments in Hoboken and we are and it helps us do wondrous Brooklyn, never staying anywhere long enough for the tax authorities to find her. things, despite our flaws. As a person, she ranked somewhere between disagreeable and disreputable. At 21 years of out rivals, ultimately turning Bankers Life into one age her Aunt Sylvia died and left millions to charity. of the nation’s largest insurance companies. In the Though Green was already at that point a millionaire 1960s, he began snatching up Florida real estate, herself, she claimed to have found an alternate will becoming the state’s largest private landowner. that left everything to her instead. At trial, the estate MacArthur ultimately became the offered evidence that Green’s will was almost certainly second-wealthiest man in the United States. Not a forgery. The disgraced skinflint spent the next six that you would guess as much. He and his wife lived years hiding in London. At her death, the newspapers in a modest apartment, with a view of a parking trumpeted that she left nothing to charity. lot. He worked out of a hotel coffee shop, making But that conclusion may be inaccurate. “I am of deals over the phone, drinking endless cups of black the Quaker belief,” she once explained. And “one way is coffee, and filling ashtray after ashtray. to give money and make a big show….

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