Judy Barber

Ellen Remmer is Director of Family Philanthropy at The Philanthropic Initiative, Inc. At TPI she has helped a number of families create strategic-giving programs. She has also helped several corporate clients reassess their philanthropic goals and design comprehensive plans that include expertise on how to partner with non-profit organizations, start an employee volunteer program and make in-kind donations. Ellen has served a key role in many of TPI's educational outreach programs and is co-author of several publications including Lessons from Wingspread - the Ten Trillion Dollar Intergenerational Transfer of Wealth, a Philanthropic Game Plan.

In addition to her consulting work with TPI, Ellen serves as the Managing Trustee of her family's foundation, the Remmer Family Foundation, which supports programs that help disadvantaged pre-adolescent and adolescent girls take charge of their lives. She serves on several committees in the philanthropic community, most recently as a member of the Council on Foundations' Family Foundation Committee and Boston's Women in Philanthropy group.

In a report published in the spring of 1997 by TPI entitled Promoting Philanthropy, she suggests that the following key factors spark our giving:

• Being asked to give and volunteer

• Having positive experiences when young, such as volunteering, participating in civic groups and being exposed to inspiring role models

• Changing one's demographic factors - in particular, being older and having more disposable income

• Being involved in religious organizations

• Living with a tax policy, both federal and state, which affects the cost and value of giving

• Having a healthy economy, which affects incomes, employment, stock values, and wealth

• Continuing to reinforce satisfaction that comes from one's giving - i.e. a sense of making a measurable difference

• Exposing oneself to moral frameworks, which justify giving and service.

Factors which appear to discourage giving, include:

• Not being asked to give or volunteer

• Distrusting society as a whole and the nonprofit sector in particular

• Being concerned that their money will not make a difference

• Having financial concerns and uncertainty about the future

• Lacking time

• Lacking a tradition of giving

• Losing community connections - due to such factors as frequent moves or little time.

Furthermore, Ellen states that the reasons some people give and others don't is their passion for a cause or institution, developed through personal experience or exposure. According to Ellen, these factors seem to be the common quality of our society's most generous individuals. And if that passion is combined with the conviction that one's generosity will have an impact, you have the making of a great philanthropist.

Ellen can be reached at tpi.org/about/staff.htm

PERSONAL EXPERIENCE

Interviews with Bud Knapp & Deborah Szekely

Cleon "Bud" Knapp

When he was 54 years old, after 30 years of building Knapp Communication Corporation, Bud Knapp sold his publishing company, which included the highly touted Architectural Digest and Bon Appetit. At that time, Bud and his wife, Elizabeth Wood Knapp, plunged head-on into the world of philanthropy. He has since chaired the Board of the Cancer Research Fund of the Damon Runyon-Walter Winchell Foundation in New York and has served on several boards, including two prominent museums in Los Angeles, The Anderson Graduate School of Management at UCLA and the Santa Fe Opera.

FM - Tell us about Architectural Digest. Please describe its history.

CK - Well, very briefly, it was started in 1920 by my grandfather as a local magazine for decorating and architectural trades. It was a picture book of designs. In the late 1950's he became ill and the family said me, "Can you leave school for a while and help the family business survive while he's recovering?" I did and I never went back. While I was helping out, I became more and more fascinated with some of the possibilities. After his death in 1965 I purchased the business from his estate.

FM - Was it a deliberate strategy to expand the magazine into national and international markets?

CK - Oh, yes. We took it from what we call a trade or a professional readership to a consumer readership. We transferred the costs of publishing to the reader by charging a lot of money for single copies and subscriptions, as opposed to our competitors who charged the cost of publishing to the advertiser. We put a lot of money into the product. It was a very lavish presentation for the upper end consumer and still is.

FM - How did Bon Appetit and your other publishing ventures evolve?

CK - Later I purchased Bon Appetit, in anticipation of the so-called "food boom" of the 70's. Once more, this one was pretty good luck, as we timed it beautifully. We took it from a liquor store handout to, again, a consumer magazine - not quite as lavish as Architectural Digest, but pretty exclusive. We bought a license to publish Geo from the German company. That didn't work out so well. We purchased Home Magazine, and that did work out. We also published mostly coffee table books. We built the enterprise into a pretty good-sized business.

FM - What led to the sale?

CK - In 1989 there were economic forces that were of great concern to me. The magazine industry was consolidating. To compete for major advertisers and to get competitive prices on materials and supplies we had to either leverage the assets of the company to obtain some growth capital to expand or realize the value of the company and sell. We went back and forth on this for two or three years. During that period there was a moderate recession, so any thought of expanding was out of the question. But then it became clear that something had to be done. Our company had a very high value, so I made the choice to sell the company to realize its value rather than try to risk expansion.

FM - You made a major life change when you sold the business. How did you sort all that out?

CK - In the process of deciding to sell, I did something that your readers may find a little unusual. I approached a psychologist and presented to her the problem of getting a divorce from the business. It was getting a divorce from this way of life that had been mine for 30-something years. I wanted to make sure that the divorce would be amicable and not destructive. During the counseling sessions, it became clear that my identity did not only come from the magazine company. Among other things, this realization encouraged me to assume that I would not be emotionally injured by selling this business.

FM - Did you talk to your family about your decision?

CK - I communicated with my wife Betsy and the family - that's four children - about my intent, because the children had been somewhat encouraged to consider coming into the family business. Before the sale we had, together as a family, attended several generation and succession planning seminars, so I had done a fairly good job of informing them as to the pros and cons of becoming involved in the family business. Of course they gave me some feedback, so there was a lot of information at my feet to consider before going ahead with this.

FM - You made the change in your mid-50's. How did you decide you would pursue and develop other interests rather than starting another business?

CK - It was fatigue and some disillusionment. Again, going back to the counseling, I realized that I was really tired of managing people and operating an organization. The rewards just weren't there, and I didn't enjoy being the boss and dictating or influencing subordinates. That just wasn't appealing anymore. Also it became more and more costly to do business. I could also see that since I had been very aggressive in the delegation of authority, the business really didn't need me to successfully operate. I felt comfortable that the properties would continue to flourish under a new owner.

FM - In selling the business and moving into philanthropy, did your views change on the meaning of accumulating wealth?

CK - That's a really critical question, and again, it goes back to ego identification with a product or company. I always asked myself, "How much is enough?" It became obvious that to continue running on this hamster wheel in order to build-up the bank account or the value of the company really didn't serve much purpose. I think I won the game. I had identified what I would receive net after taxes from the sale of the business to maintain a lifestyle and to make some improvements in my life that I had put off when I was building the business. I had reached what was enough.

FM - Could you talk a little bit about your history of charitable giving?

CK - Well, originally it was charitable giving, not charitable work. It was tied to the family business. At the sale of the business, the foundation was created to maintain those relationships, and then I began to be asked to join several boards.

FM - How did you go about making the tough decisions about where to put your time and energy?

CK - I realized very shortly that there were too many requests for the amount of time and interest that I had. It took a couple of years to really understand this. So we brought in a person who is a consultant to small family foundations here in southern California. When we began to look at the issue of accountability, suddenly all those donations of major gifts based on knowing the director of some people on the board well didn't resemble an investment in the institution. So we just built a system of grant solicitation and grant making that has drastically changed the way the foundation operates and those to whom we give. We identified three areas, in no particular order: the arts, medical research, and education.

FM - What's one of the more meaningful projects you're involved with?

CK - Well, an organization called The Fulfillment Fund here in Los Angeles - and it's a group that matches adult mentors with students without resources who have great promise who are identified by their teachers. They're handicapped by family, drugs, physical disabilities - whatever it is. We gave the Fund a grant to do a marketing study for major fund-raising. We give scholarships that pay for the kids to have mentors through high school. We know the mentors and some of the students. It's very rewarding.

FM - Are your children involved in the foundation?

CK - Slowly. Because they're in their 30's, they're more interested in making money than in spending it. They're modestly interested in the foundation. Another thing I have to be honest about is that we have not discussed the estate plan with them. Until they really understand how the estate is set up, how much money they are going to get at our deaths and the size of the foundation, it's an intellectual abstraction. I hope they will be part of the board that oversees the foundation.

FM - As you look back on your decision to devote more time to philanthropy, how do you feel about the personal satisfaction and the contribution that you've made so far?

CK - I find myself right in the middle of a transition and it's a very exciting period of time. Los Angeles, unlike Boston or Baltimore or New York, has little philanthropic traditions. Rather than going out and soliciting major gifts, it's about going out and educating about philanthropy. The major gifts will come later.

FM - So the satisfaction comes from moving charitable giving to a business framework?

CK - Yes, but at the same time, government funding to not-for-profits is declining. And so, more and more private foundations are being asked to pick up the slack. And it's a major shift. I don't see that the government is ever going to be as active as it once was. Eighty percent of the University of California system used to be funded by the state. It's now close to 20%. The difference has to be made up with private funds. So these two transitions - educating the second generation in southern California about philanthropy and promoting the use of business practices in non-profits - have been lots of fun.

FM - As you look back over the last four or five years, is there anything you would do differently?

CK - Yes. I would have taken more time before giving a nickel to any not-for-profit. I would use a very aggressive means of inquiry into whether joining a board is really worthwhile or not and I would have brought in a professional to advise us on the foundation at the very beginning. A lot of "do diligence" and good professional help. Southern California is unique and the diversity issues are constantly in front of us and foundations need to find ways to include minorities in the process.

FM - Bud, thank you. I appreciate your time and your candor.

CK - You're welcome.

Deborah Szekely

When she was 59 years old, Deborah Szekely, pioneer of the spa industry and founder of the Golden Door in California and Rancho La Puerta in Mexico, left her business in the hands of her son and daughter. She then embarked on a series of new challenges: President and CEO of the inter-American Foundation, advisor to the director of the United States Information Agency and founder of her non-profit foundation, Eureka Communities. At 75, Deborah continues to look for new career challenges in philanthropy.

FM - Tell us about the history of The Golden Door and Rancho La Puerta. What lead you to start a spa?

DS - It was just before the United States' involvement in World War II. When war began in Europe, we suddenly had no income - we were broke. Edmond was in the United States with a visitor's visa on his Romanian passport. He received two letters from his embassy ordering him to return to Romania for military service. For him, a young, Jewish man, going to Romania would be like committing suicide. Shortly afterward, the Romanian embassy advised us that his passport had been canceled. Within two weeks, we received a letter from the Immigration and Naturalization Service stating that if he was still in the United States after June 1, 1940, he would be arrested and returned to Romania as a deserter. So we went to Mexico as undocumented aliens.

FM - How long did you stay?

DS - Forever. Part of us will always be there. In prior years my husband had held annual summer health camps, each one in a different country, so it was a simple decision to say, "That is what we will do." We invited people who had read his books to our health camp in Tecate, Mexico: $17.50 a week, bring your own tent. He chose the area for the climate. I happily agreed because it was not too far from my family.

FM - And then when did you actually move back to San Diego?

DS - Not for twenty years; not until my kids started school. Then I commuted. I'd pick them up on Friday; we'd go to the Ranch and return on Monday morning just in time for school. In 1958, when my son was six months old, I founded the Golden Door.

FM - How did you and your husband share in the running of the business?

DS - My husband was a genius, a very unusual person. He hated details. He was a writer and a philosopher, but he was wonderful with the guests. So from the beginning I ran "the back of the house," handling all the details. In 1969, we divorced after 30 years.

FM - And so then, by that time you were pretty much running things anyway?

DS - I'd been running both spas for years. We'd been separated for ten years and I'd been running the Golden Door from day one. He had no involvement, except he'd come and lecture. So, I went to the Bank of America and they advanced the money that made the whole thing come together. Later, thanks to B of A, when I rebuilt the Golden Door, I received what proved to be the largest SBA loan that had ever been given up to that time.

FM - You made a major life change when you passed the business on to your children. Was your decision gradual or instantaneous?

DS - I was fifty-nine and had given a brunch at my house with twenty of my friends. Everything had been cleared up and I was relaxing, daydreaming by the fireplace. Thinking about the party, I said to myself, That was nice. Then my daydream took me into the future and I imagined myself ten years older. My frienDS - ' concerns had not changed in years and as I listened I realized that I wanted to make a change.

FM - So you ran for Congress?

DS - There was a vacant seat. Unfortunately, there were eighteen Republicans and three Democrats in the race. It was in the 1980s; I was a Republican, a woman, a Jew and pro-choice. None of these added up to a winning candidate.

FM - Then what?

DS - I traveled to Washington to see if I would like the job, whether I would be good at it. I had hoped to find some kind of job description but there wasn't one. I decided to go to Washington not as a Congresswoman but with a simple goal of creating for them a management manual. That would be my next career. I knew I needed a university with a political science department and grad students. I started at the beginning of the alphabet with American University, where I told them I would donate $100,000 toward my goal. Setting Course, A Congressional Management Manual is now in its sixth edition and is sent to newly elected Congress members of both parties.

FM - So what did you do about the business?

DS - I had told my kids, "I worked for you all these years, now it's your turn." Actually, Alex had already been working in the business. When I used to lecture on management, I would tell my audience, "When an entrepreneur who created a business is ready to turn it over to his successors he needs to be gone for a year." The new CEO needs to be free to profit from success and learn from failure.

FM - Was Sarah Livia in the business at that time?

DS - Yes, she is a landscape designer. Our vegetable gardens had lain dormant for several years. She recreated them into the glorious gardens of today and against great odds trained a wonderful staff to carry on her work. Both the Golden Door and Ranch are known for their beautiful gardens, which are due primarily to her creative vision.

FM - Many entrepreneurs who retire at a relatively young age will start another business. How did you decide to shift your interests to government and the nonprofit world?

DS - I was always involved in the community and concerned about the plight of the poor. Thanks to Setting Course, I was able to escape the image of the "Lady from the fat farm" when I'd sought and received the Presidency of the Inter-American Foundation, an independent agency of the Federal government working in grassroots development throughout Latin America and the Caribbean. Those six years were marvelous training; it was exciting to witness real change in people's lives as we strengthened the nonprofit organizations created to serve them.

FM - Before we move on to Eureka, I'd like to know if having left your business, whether your views have changed on the accumulation of wealth? If so, in what ways?

DS - I was very young when we started the Ranch and Golden Door. I had been exposed to the so-called "Lifestyle of the rich and famous". I recognized that it didn't make people happy. I decided that that life was not for me.

I was a teen-ager when I first read this quote from Luke 12:48: "For unto whosoever much is given, of him shall be much required: and to whom men have committed much, of him they shall ask the more." It had great impact on me.

FM - So you left the business, retired from the government and then founded Eureka?

DS - I didn't retire from something, I went forward to something. I think that's the key, never retire. I just changed occupations. It was a career change.

FM - Tell us about Eureka Communities.

DS - Eureka is the child of the Inter-American Foundation, the result of twenty-five years of helping the poor of Latin America and the Caribbean help themselves. I knew that successful Third World development techniques would work. For six years, I testified before House and Senate Foreign Relations and Appropriations Committees and each time terminated my presentation by saying, "We of the United States desperately need a version of the Inter-American Foundation."

FM - So Eureka began with the models from the Inter-American Foundation?

DS - Yes. I was inspired by my visits to several hundred entrepreneurial community based nonprofit organizations. I had a responsibility as

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