The disappearing philanthropists
Resource type: News
Just when a culture of philanthropy takes hold in Ireland, the rich lose their money.
By Conor O’Clery
DUBLIN — Just off a two-lane country road south of Dublin, work has been going on for three years on a magnificent modern development set into a hillside, comprising a hotel, conference center and apartments.
The site, at Kilternan on the Enniskerry Road, also includes Ireland’s only (artificial) ski slope, and was poised to become an Irish version of Davos, the winter sports and conference center in Switzerland. But today it is fenced off and deserted, apart from a security guard.
It is a white elephant, one of hundreds of developments across the country lying idle as a result of the severe recession. And that is bad news for a social phenomenon that Ireland was just beginning to enjoy for the first time in its history: the growth of a culture of philanthropy.
Like a number of Irish builders who became multi-millionaires in recent years, the Kilternan developer Hugh O’Regan had made known his ambitions to give away his fortune to do good. Now his wealth and that of many other members of Ireland’s rich list has substantially declined.
The extent of over-borrowing by builders was revealed this month when the minister for finance, Brian Lenihan, announced the creation of a “bad bank” — with the Orwellian name of the National Assets Management Agency — to remove between 80 billion and 90 billion euros ($106 billion to $119 billion) of property loans from the balance sheets of the country’s lending institutions.
“We had got to the point where 500 million euro was donated to charity each year but now people are beginning to see their wealth disappear,” said Tina Roche, chief executive of the Community Foundation for Ireland. “Over 20 billion euro has been written off in the last two years, so if there are bad assets of 90 billion euro, then Irish people’s wealth has gone down by 110 billion euro.”
Even at its peak last year, Ireland was still well behind the United States and 10 years behind the United Kingdom in philanthropic giving, according to Roche, whose foundation holds funds of 25 million euros and makes grants on behalf of donors.
Three years ago, at the height of the boom, the Bank of Ireland reported that Irish citizens were the second wealthiest in Europe, with an average net worth of $268,000. That was when the debate on philanthropy got going. Trinity College Dublin launched Ireland’s first course dedicated to fundraising and philanthropy studies, in partnership with the Center on Philanthropy at Indiana University. Since 2007, the Community Foundation for Ireland has given an annual award to the Irish philanthropist of the year.
Big-time giving, long a feature of the United States, is relatively new in Ireland. Irish people are known for responding generously to disaster appeals, but most of the new rich felt entitled to enjoy their wealth to the fullest. A survey of advisers to the wealthy in 2008 found that fewer than 5 percent of their clients engaged in philanthropy and most had left less than 10,000 euros to charity in their wills. There was no giving tradition for them to follow. Before the Celtic Tiger economy, the government and the Catholic Church were expected to fund education and social services.
With one or two exceptions, no one made big private donations until Irish-American philanthropist Chuck Feeney began funding Irish universities in the late 1980s. To date the former duty-free tycoon, who transferred his entire wealth to his foundation, Atlantic Philanthropies, has donated more than $1 billion to good causes on the island.
Feeney’s giving-while-living philosophy did help inspire some of the new Irish rich to think about distributing their wealth in their lifetime. Declan Ryan, son of the late Tony Ryan, co-founder of Ryanair, created a foundation named One after the U2 song of that name, with the line, “We’ve got to carry each other.” Ryan has donated 27 million euros in five years to projects in Ireland and Vietnam, and intends, like Feeney, to give all his foundation’s assets to good causes in the next 10 years.
Other philanthropists — such as property developer Niall Mellon, who in 2002 used his own money to start building houses in South African townships with the financial and physical help of hundreds of Irish volunteers — have been held up as role models for the wealthy.
But many of the new rich aren’t around anymore and the need for charity is growing. The turnaround has caused private funds for thousands of community organizations tackling issues from autism to youth problems to dry up.
“We were getting applications for 6 euro for every one we had,” Roche said. “Now we are getting applications for 10 euro for every one.” Philanthropy was just getting going, she added. “Now it has been knocked on its ass.”
Editor’s note: Conor O’Clery was a member of the judging panel for Irish Philanthropist of the Year in 2007 and 2008. He is the author of a biography of Chuck Feeney, “The Billionaire Who Wasn’t.”