Scanning the Skyline: Lessons From 30 Years of Capital Grantmaking

Resource type: News

Tony Proscio, Duke University Center for Strategic Philanthropy & Civil Society |

Buildings have a special allure for philanthropy—their mass, their unambiguous reality, their durability, their promise of sheltering great transformative enterprise—that few other achievements can match. They also conjure a cloud of distinctive risks: the possibility of inadequate maintenance, financial drain, premature obsolescence, the danger that the activities they house may not end up being all that transformative.

For a certain kind of donor—the philanthropist as creator, whose passion is to summon new things into being—the appeal of a building, if well planned and managed, more than compensates for the risks. It can transform the physical landscape, concentrate attention and resources on important lines of work, galvanize public will, raise standards of effort and performance, perhaps make a striking architectural statement. Yet even from this vantage point, the goal is rarely the thing in itself, but the activity it makes possible: superior learning and discovery, more effective human services, accelerated scientific or technological innovation, improved medical care, or intensified creative energy, will and collaboration.

In other words, if done properly, philanthropic support for a building is not the purchase of a product. It’s an investment in enterprise, a long- term underwriting of whatever goes on inside. As Chuck Feeney summed it up in 2010, capital philanthropy creates “good buildings for good minds” that in time “can make the difference in the lives of a lot of people.” Partly for that reason, it is especially popular among entrepreneurial givers, for whom building a business and building a cause are related undertakings.

Admittedly, for another kind of donor—let’s say, the philanthropist as reformer, whose aim is to change policies and systems, to alter ideas and practices, to improve the way societies and economies function—buildings can trigger more aversion than fascination. Their scale and finality may seem, to some, too costly and irreversible, too inflexible a bet on one thing in one place.

Among institutional funders especially, this aversion to buildings is fairly common. Unlike individual donors, institutions may not derive much satisfaction from placing their names on a structure; many also fear a latent stream of future requests to keep funding maintenance and improvements long after a building is finished. For whatever reason, as South Africa’s Constitutional Court Justice Albie Sachs put it elsewhere in this book, “Anyone connected with philanthropy could have told us that we would be wasting our time trying to get funding for physical infrastructure. Money could go for equipment, salaries, transport and conferences, but never, ever for buildings.” An exception to that rule, Justice Sachs discovered, was The Atlantic Philanthropies.

Perhaps the most significant and fascinating revelation from the hundreds of capital projects in these pages is that Chuck Feeney and Atlantic together have managed to be both kinds of philanthropist, creator and reformer, in one. Though Mr. Feeney’s personal enthusiasm has tilted toward creation, and his foundation’s institutional efforts have tilted more toward reform, each of these inclinations has been inspired and invigorated by the other. Far from being averse to buildings, Atlantic—even in its most reformist endeavors—has used buildings to educate, empower and equip the leaders of change. And it has built many of its most ambitious reform efforts partly on the credibility that comes from creating significant buildings.

For Atlantic, as for Mr. Feeney personally, great efforts to improve society, promote justice and advance human achievement entail major near-term investments in both the methods and the physical surroundings that make long-term progress possible. Seen this way, Giving While Living is not a short-term undertaking, though it occurs in the concentrated span of a single lifetime. Instead, philanthropy conducted intensively today lays a foundation—often literal, but also figurative—for generations of future achievement, invention and aspiration.

“Yes,” writes The Honorable Michael Bloomberg in his reflection on the projects in this book, “they are investments in bricks and mortar and infrastructure, but at base they are investments in people and in their economic and creative futures. This is the power of philanthropy.”

From this point of departure, it’s possible to draw several related lessons:

1. Capital grants are one critical point in a philanthropic process; they’re not the whole story. Support for a new building or complex is usually a kind of midpoint between smart planning and smart management—all of which are part of a longer-running project. Before the first brick is laid, a building must be the fruit not only of good architecture and engineering, but also of the strategic, business and human- resource planning for what will go on inside the new walls. And long after the ribbon is cut, the building’s success will depend on steady, skilled management of the facility, its finances and the quality of the activities inside. For the capital philanthropist, it isn’t necessary to fund all these things. In fact, other donors are often more willing to support planning and management than construction. But making a capital grant wisely usually calls for reasonable confidence that all these other questions—those that precede the building and those that follow it— have good, dependable answers.

Consider, for example, the Ha Noi School of Public Health or Mercer’s Institute for Successful Ageing at St. James’s Hospital. In neither case could Atlantic have hoped to fund the vast web of activity necessary to elevate public health across Viet Nam or services for older people across Ireland. But it could be, and it was, confident that the leadership of the recipient institutions and the public support for their work were sufficient—that the grantees were intellectually prepared for the challenges ahead, expert enough to carry them through, and securely enough funded to sustain their operations and exert nationwide influence.

As with all grantmaking, however, a lapse in vigilance can lead to long-term disappointment. For example, early in its grantmaking in Viet Nam, Atlantic supported a new $1.3 million facility for residential vocational training for adolescents with disabilities. The cause was impeccable, the need was evident, the building was well designed and soundly built. But the business plan for operating the training program was faulty, and Atlantic arguably missed opportunities to help improve it. In time the program failed. A decade later, the government rents the building out to unrelated nongovernmental organizations.

2. Capital grants are human capital grants. The success of any building is ultimately a function of the people who will govern, manage and use it. For Chuck Feeney, the first calculation behind a major capital grant was almost never about architecture, but about talent and leadership. He viewed buildings as ways of expanding and solidifying the ambitions of brilliant people. His largest, most sustained investments—in New York, Limerick, San Francisco, Belfast and Brisbane, among many other places—were inspired first by leaders in whom Mr. Feeney recognized intellectual dynamism and entrepreneurial zest. Investments in these exceptional leaders then in turn made it possible for them to equip and embolden other talented colleagues who would occupy the buildings.

Describing the Atlantic-supported Walter and Eliza Hall Institute of Medical Research in a suburb of Melbourne, Australia, former director Suzanne Cory said that the facility “enabled me to bring in new teams in biomathematics, proteomics and structural biology—enormous strengths for our research. Those people would not have joined up, and may even have gone overseas, had I not been able to develop out those labs further here.”

Especially in undercapitalized areas of work and in under-resourced communities, a superior building often helps to elevate the ambitions of the people who work there and gives employees greater credibility in advocating for improvement. Dr. Bui Duc Phu, director of Viet Nam’s Hue Central Hospital, concluded that his new cardiovascular center, funded by Atlantic, “was a meaningful turning point in the development of the hospital, a move that motivated people to believe in the future and that we could do anything if we had the dreams and ambition.”

3. Capital projects are interventions in systems that extend well beyond the perimeter of the project. This point may sound abstruse—a bit of abstract political theory at odds with the solid practicality of financing new structures— but it is actually both concrete and central to the philanthropy of buildings. Create a facility for research, teaching, medical care, human services, or artistic display or performance, and you are inevitably altering the productive environment of a much broader field of activity in which the building and its occupants will play a role. Whether that role merely augments the current field of activity or actually changes it in some significant way (preferably for the better) is a critical part of the grantmaking calculus.

The work going on in a new building may incubate new practices, set new standards, train new leaders, or significantly widen the sphere of influence of the field or profession doing its work in the new space. It is the flow of changes that ripple out from a new physical structure that make it an appealing philanthropic project. So, for example, Atlantic’s support for small clinics in dozens of poor and rural Vietnamese communities is not significant solely for bringing better medical facilities to those communities (though that is, in fact, a huge benefit to the residents and to the staff who practice there).

The far greater significance of these buildings is in the way they’ve drawn attention to the superior primary health care being delivered inside, including better training for the staff and physicians, better communication between the clinics and the provincial health authorities, and a wider array of local services to help prevent illness and treat diseases early. Most important, they have demonstrated a way of integrating services for a more complete approach to family health. Independent evaluations, funded by Atlantic, made it clear that the benefits for the overall health system more than compensate for the capital cost of upgrading facilities. These demonstrations have been closely followed in Viet Nam’s national Ministry of Health and have since been replicated across the nation’s health system—including in hundreds of places where Atlantic has made no contribution to construction.

4. A project’s name is one of its value-generating assets. A funder who waives the right to name a project is, in effect, granting that right (potentially worth millions of dollars) to the organization putting up the structure. Forgoing the opportunity to put one’s own name on a building, thus making that opportunity available to some future donor, may well constitute a non- cash grant of immense financial value.

In his reflection on Chuck Feeney’s approach to philanthropy, journalist Matthew Bishop observes that “Mr. Feeney’s purposeful efforts to avoid placing his name on buildings made it easier for the recipient institutions to seek complementary funding with the prospect of naming rights.” It is surely one of the most extraordinary features of Atlantic’s history that there is not one building in the world named for Atlantic or for Chuck Feeney. Instead, there are several where Mr. Feeney was the project’s prime mover, but another major donor was enticed by the opportunity to name the structure.

5. An important, well-chosen building can establish alliances and credibility that make other achievements possible. Capital projects produce tangible, three-dimensional products that (if well chosen and planned) are highly valued by other parts of society, including government, philanthropy and the voluntary sector. They also make it possible for other funders, public and private, to envision work that they might not have imagined, or thought possible, before. Working with these other actors, and producing something of lasting value to them, can forge relationships of trust and collaboration from which even more ambitious and far-reaching activity can be launched.

Brian O’Connell, former rector and vice chancellor of South Africa’s University of the Western Cape, has written that Atlantic’s support for a new life sciences building there helped trigger a massive increase in government investment in the infrastructure of higher education in the ensuing years. At the same time, it fed a new sense of confidence and possibility across his university’s campus. “Here was someone external to ourselves having faith in us,” he wrote, referring to Mr. Feeney. “And the psychological impact was tremendous.”

As Matthew Bishop concludes, “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.”

Another example: Atlantic’s historic collaboration with the governments of the Republic of Ireland and Northern Ireland had its roots in dozens of academic buildings that Mr. Feeney and the foundation helped to create, from Galway to Limerick, Dublin to Belfast. But once those relationships were cast in (literal) stone, they became the basis for much wider-ranging joint investments in higher education. These did not involve capital construction, but they generated new engines of research across the universe of third-level institutions in both parts of the island.

Chuck Feeney “raised the game of the universities collectively,” Mary Robinson, former president of the Republic of Ireland, writes, “by enabling capacity dedicated to research in state- of-the-art facilities. But his perspective was not a narrowly academic one. It was about making university campuses better places.” And as the places improved, the ability to think more expansively about what they could strive for and achieve grew ever wider.

6. Capital grants need not be only for bricks and mortar; equipment can also make a lasting difference in the infrastructure of human achievement.Many of Atlantic’s contributions toward improved facilities for research, education, and health—including virtually all of Atlantic Charitable Trust’s capital grants in Cuba—have been for new and upgraded equipment to transform what happens inside key buildings. Particularly for smaller donors, or those who feel unable or unready to plunge into the complexities of real estate finance, an investment in significant equipment and technology may offer a more appealing option, often with equally far-reaching consequences.

7. Capital funding is a specialized skill. It requires funders—or their staff, agents or advisors—to understand the financial complexities that the project may create for the recipient institution and to incorporate solutions (or at least mitigation) into the planning of the grant. If done well, capital funding is often more technically demanding than other types of grantmaking. That is not solely because it requires a sound grasp of real estate development and finance—forms of expertise readily available to most foundations from outside specialists. The subtler technical challenges arise from lesson number one above: A new facility can place operational and management burdens on a grantee that are easy to underestimate and require careful analysis and preparation before the investment is made.

It can be tempting to view an impressive new headquarters or operations center as the solution to a struggling organization’s problems. Yet in some cases it could actually just become a new and greater source of struggle. Such risks can be minimized with good planning, management and fundraising. But a funder needs to be sure, in advance, that these things are truly adequate to the challenges ahead—a kind of assurance that takes skill and experience to achieve.

Fortunately for Atlantic, Chuck Feeney made a significant part of his fortune by creating and managing successful buildings and spaces. Managers at Trinity College Dublin got the benefit of that expertise, for example, when he persuaded them to reposition the Old Library’s gift shop adjoining the Book of Kells so that it would attract visitors both arriving and leaving. His own experience, and that of his advisors and associates, has been a potent resource for all the foundation’s capital giving. Most donors, however, cannot expect to master all the complexities in-house. Instead, they can and should seek out expert support with a substantial history of experience amassed behind it.

The photographs and stories in this book are a testament in stone, steel and glass to one person’s particular philanthropic vision. Another foundation or donor might not have supported this precise combination of projects and aspirations. But funders in many fields confront the need, at some time or other, for a building or set of buildings that can anchor a critical endeavor, give it physical expression, and provide the space for it to progress, grow and adapt. The aversion many funders feel about meeting that need with grants or low-interest loans is, at least in some fields, probably overblown. The projects in this book, taken as a whole, surely demonstrate that capital philanthropy can produce impressive results whose significance reaches far beyond the buildings themselves.

But some degree of caution is surely called for. The best capital philanthropy is a complex calculation about both masonry and movements—about locations and structures and the wherewithal to maintain them, but also about the business to be done inside, including its soundness and management and the influence it will exert outside the newly constructed walls. The lessons of this book do not suggest that these calculations are any easier than those of other forms of grantmaking, or that success is more certain. Rather, if the message can be summed up in a phrase, it is that bricks and mortar are often an essential part of great human achievement—that, to borrow Chuck Feeney’s words, good minds often need good buildings. And good philanthropy can provide the means and the vision to build both.