August 25, 1997, Monday.
Tycoon puts his money where his beliefs are
by Martha T. Moore
NEW YORK -- When billionaire George Soros began promoting democracy in Eastern Europe in 1984, he was one of the few who backed up his ideas with cash.
But when his Open Society Institute, which until recently operated mainly overseas, opens a field office in Baltimore next month, Soros will join a horde of nonprofit groups working to solve the ills of the American inner city.
Soros, who made his fortune on Wall Street and is worth at least $ 2.5 billion, stands out in the crowd.
He gives away big money; he moves fast; and he has controversial ideas. His fans call him a modern-day Andrew Carnegie; his critics call him a liberal with a fat wallet.
An emigre who lived under communist rule in his native Hungary and a Jew who survived Nazi occupation, Soros has spent more than $ 1 billion to promote democracy in Eastern Europe and the former Soviet Union. He began giving away money in 1979 for scholarships in South Africa, and he donates as much as $ 360 million a year, a figure that rivals the Ford Foundation, the richest in the country.
To give away that money, Soros created the Open Society Institute based in New York and Budapest, and under its umbrella, a network of foundations in 25 countries. Backed entirely by Soros, the foundations do everything from buying copy machines to funding the Central European University, a graduate school in Budapest.
Soros has spent money in the USA, but recently his institute has created a blizzard of grants and programs. Spending on U.S. programs ballooned from $ 1.7 million in 1994 to $ 11.4 million last year to $ 13.4 million just the first quarter of this year. With that money, Soros is
plunging into some of the most polarizing issues in the country.
The thread of his giving is his philosophy of the "open society" in which free debate reigns, values take priority over money and civil institutions flourish. When Congress passed laws last year cutting off some welfare services for legal immigrants, he promptly created the Emma Lazarus Fund, named after the 19th century poet who wrote the Statue of Liberty's inscription, "Give me your tired, your poor, your huddled masses yearning to breathe free." He has pledged to spend $ 50 million for the foundation to help immigrants become citizens and eligible again for benefits.
He calls U.S. drug policy a failure and, through grants to the Washington, D.C.-based Drug Policy Foundation, is the biggest financial backer of needle exchange programs. This month, his institute announced a grant of $ 1 million to the San Francisco-based Tides Foundation for another program to provide clean syringes to drug addicts, an effort to prevent the spread of AIDS.
He supports campaign finance reform and abortion rights. He created a center to study death and dying. The institute has given $ 3 million to promote public financing of elections, and $ 1.4 million for programs for prisoners and crime victims. He also has promised $ 12 million to the Algebra Project, which teaches math in inner-city and rural schools. He spent $ 1 million privately to support medical marijuana ballot initiatives that passed in California and Arizona last fall.
In Baltimore, the foundation pledged this month to give $ 25 million over five years to community groups for social services and economic development. The foundation also has pledged $ 2 million for a program trying to provide drug treatment on demand in Baltimore. The city was chosen in part because Baltimore Mayor Kurt Schmoke and Soros agree that needle exchanges and treatment on demand are effective ways to combat drugs. And while Baltimore has many of the serious problems of other cities, its size (population 703,000) makes it manageable for the foundation's first major U.S. project.
The institute also will launch community development programs in New York and a third city yet to be named.
Soros acknowledges he's directing his largesse to the USA at a time when his adopted home is enjoying a prolonged economic boom. "I do not see this as an emergency intervention," Soros said in an interview. "But I think that to have a reasonably just society, there should be ongoing concern and intervention in issues that are troubling and undermining our society."
Fellow philanthropists admiringly compare Soros, 67, to Carnegie, the steel baron who endowed hundreds of local public libraries. "This is a man who's willing to take the whole world as his stage, and to act on that stage in a way to, he hopes, change history for the better," says Nelson Aldrich Jr., editor of American Benefactor, a magazine for philanthropists.
His critics question his motives. "At first people thought, because of his background on Wall Street and because of the work he did in Eastern Europe, that he was an anti-communist -- and then because of the drug stuff, that he was a libertarian," says Robert Pambianco of the Capital Research Center, a conservative think tank in Washington, D.C. "But it's become increasingly clear, as he's gotten involved in public policy in this country, he's the ACLU with a billion dollars."
Going full tilt
Soros draws attention not just for what he gives to, but for how much. "On the issues that (Soros' institute) decided to look at, they have gone full tilt," says Paul Demko of the Chronicle of Philanthropy. "They haven't said, 'We're going to put a couple hundred thousand dollars here.' They've said, 'Here's $ 50 million, here's $ 25 million,' and jumped head first into things. That's pretty bold."
Soros says he wants to give away all his money in his lifetime. But he keeps earning more and concedes there's so much of it he probably won't be able to.
His open society philosophy certainly sounds more like the USA than the post-communist East. "We do have very, very open debate in this country," Soros says. "There are areas where there's a bigoted approach, as for instance in drugs. There are areas we just refuse to deal with, like the problem of dying. In those areas, I am fostering debate.
"For a politician to touch the drug issue is touching the third rail. . . . I think this is an issue where public opinion is way ahead of the politicians."
Critics of needle exchange say it condones drug use and is a first step toward legalization. Soros does not favor legalization, says Ethan Nadelmann, head of the Lindesmith Center, the Open Society Institute's drug policy reform program.
"What George is about is sensible, pragmatic and compassionate approaches to dealing with drugs and drug addiction," Nadelmann says. "You can count on other people to pay for the safe stuff. Our money should be used to pay for things no one else will pay for because it's too hot to handle."
But being viewed as too politically aligned could hinder his foundation's work, Soros says. "It's a danger, and I'd like to avoid it. But I'm willing to expose myself because, on an issue like drugs, very few people are in a position to take the abuse that I've taken."
In other words, a pile of money makes a good soapbox, especially when you're espousing something unpopular. And spending money to help solve problems gives legitimacy to a point of view, Soros says.
"If you're actually doing something about an issue . . . it gives you a much stronger ground for advocacy," Soros says. "There's an old Soviet joke about goose liver pate. You have to mix it a little bit: one horse to one goose liver.
"Advocacy and actual engagement should be also mixed: a goose liver of advocacy and a horse of actively pulling your weight."
Copyright (c) 1997, USA Today