July 2007 – Giving something back

One of my fondest memories from childhood is the weekly visit with my mother to the local lending library. Over the door, etched in stone, was the name Andrew Carnegie.

It was much later that I discovered that Carnegie, one of the greatest philanthropists the world has known, had spent the latter part of his life dispersing his vast fortune accumulated in the Carnegie Steel company.

Now the British billionaire Sir Tom Hunter has announced that he plans to do the same. He aims to invest his business building skills in to creating purposeful projects, often helping those in poorer parts of the world.

He and his wife, Lady Marion Hunter, he said last week, planned to leave the world as they entered it, “pretty much with nothing.”

Sir Tom’s thinking matches closely, not only that of Carnegie but that of Warren Buffet, another self-made billionaire who last year committed most of his wealth to charity, giving about $30bn to the Bill and Melinda Gates Foundation.

All three men were concerned to provide sensibly for their immediate families, the idea being, as Mr Buffet put it, to leave them enough that they can do something with their lives, but not so much that they can do nothing.

Carnegie had been dismayed at the desultory lifestyles adopted by the children of some of his contemporaries and wanted to avoid any repetition in his own family. This is a recurring theme in the protestant work ethic that extends now to the middle classes.

Preparing young people to make a difference in this world is one of the greatest gifts any generation can bestow upon another.

But striking the right balance is difficult. How can you replicate the conditions that shaped your own approach to work within the comfortable lifestyles enjoyed by today’s middle classes?

How many parents tell their children “you have it too easy these days?” It’s tempting to lecture them about getting up for work on cold mornings with frost on the inside of the bedroom window. But I heard those same stories from my parents and I’m not sure it made much difference to me.

Brian Souter, another self-made multi-millionaire and chief executive of Stagecoach, the bus and train operating company, preaches much the same home-spun philosophy to his own young family. He espouses a value-for-money approach founded on efficient work practices, doing a good job and accounting for every penny spent and earned, what, in a newspaper interview this week he calls “the products of aspiring working class people.”

But Mr Souter’s children are no more working class than mine. Besides, there are different issues for young people today. While it might be easier for young people to borrow a family car, buying a first home is a much tougher proposition than it was for their parents. Beyond that, today there are debts associated with university education that must be settled as people begin to earn. When I started work at least, financially, I started with a clean slate.

So many companies incorporate degree expectations in to jobs these days that young people have little option but to invest in their education. Across the industrialised world parents have decided that education is the key to a financially secure future for their children.

Such thinking is as sound today as it was in Carnegie’s time when his father, a hand loom weaver, and his uncle, a grocer, did what they could to ensure that the family was well read.

A concentration on education is important. But theory-based school and college education in a system that has become obsessed with exam results can only go so far and too often creates a “grading mentality” that feeds through in to the workplace.

One of the schemes introduced by the Hunter Foundation, the charity established by Sir Tom and his wife, is partnered with the Scottish Executive to encourage better teaching of business skills and entrepreneurship in Scottish schools. Among the pilot programmes is one building leadership skills among head teachers.

Just as Carnegie made a list of good causes, prioritising institutions such as libraries and schools, the Hunter Foundation has established certain principles designed to help people make a success of themselves whatever their background.

“There are basic human rights no person should be denied and the chance to succeed must be one of those rights,” it says on its website.* “We cannot go on funding high dependency interventions around the world. Our view is a simple one – equip everyone with the ability to succeed and the conditions in which they can apply that ability. Offer fishing rods not fish.”

Another policy is to engage in partnerships with agencies that have already demonstrated a sound understanding of issues on the ground in various parts of the developing world. The idea is to apply investment principles to philanthropy, rather than simply giving money away.

One certainty for all such approaches is that it is almost as difficult to make useful charitable investments as it is to accumulate wealth in the first place. Outcomes from charitable work are notoriously difficult to measure and might not become apparent for decades.

How, for example, can you measure the impact of Carnegie’s libraries? More than 2,500 were built, most of them in the US, although 660 were built in the UK and Ireland. All were founded on the principle that they should extend free book lending to all. This was particularly important in the US where, without Carnegie’s intervention, it would have been more difficult to establish the principle of free borrowing.

Today there is an equally urgent need to establish free wireless internet access for all who need it so that the same principles may apply. I can see why so many airports and hotels have created “paid for” services, but the dissemination of knowledge is too important - for business too in the long run – to apply a fee-paying model in every circumstance.

One of the strongest lessons from fortunes made on the back of hard work among those who come from modest backgrounds is that money is a tool for getting things done, something to be valued as a resource, not squandered in flamboyant behaviour and certainly not to be worshiped. “No idol is more debasing than the worship of money,” said Carnegie.

The Hunter Foundation, like others in the US, is showing how wealth, carefully managed and directed, can be put to better uses than the self-aggrandising collection of ever more ostentatious possessions. It’s difficult to carp about fat cat pay when those who earn great wealth work just as diligently to ensure that it is put to good use.

*www.thehunterfoundation.co.uk

See also my blog article: craigslist-and-carnegie

A different view (not one I share) here: http://www.thefirstpost.co.uk/index.php?storyID=7912