On a cool summer afternoon at Dublin’s Heuston
Station, Chuck Feeney, 81, gingerly stepped off a train on his journey
back from the University of Limerick, a 12,000-student college he willed
into existence with his vision, his influence and nearly $170 million
in grants, and hobbled toward the turnstiles on sore knees. No commuter
even glanced twice at the short New Jersey native, one hand holding a
plastic bag of newspapers, the other grasping an iron fence for support.
The man who arguably has done more for Ireland than anyone since Saint
Patrick slowly limped out of the station completely unnoticed. And
that’s just how Feeney likes it.
Chuck Feeney is the James Bond of philanthropy. Over the last 30
years he’s crisscrossed the globe conducting a clandestine operation to
give away a $7.5 billion fortune derived from hawking cognac, perfume
and cigarettes in his empire of duty-free shops. His foundation, the Atlantic Philanthropies,
has funneled $6.2 billion into education, science, health care, aging
and civil rights in the U.S., Australia, Vietnam, Bermuda, South Africa
and Ireland. Few living people have given away more, and no one at his
wealth level has ever given their fortune away so completely during
their lifetime. The remaining $1.3 billion will be spent by 2016, and
the foundation will be shuttered in 2020. While the business world’s
titans obsess over piling up as many riches as possible, Feeney is
working double time to die broke.
What Feeney does is give big money to big problems–whether bringing
peace to Northern Ireland, modernizing Vietnam’s health care system or
seeding $350 million to turn New York‘s
long-neglected Roosevelt Island into a technology hub. He’s not waiting
to grant gifts after he’s gone nor to set up a legacy fund that
annually tosses pennies at a $10 problem. He hunts for causes where he
can have dramatic impact and goes all-in. “Chuck Feeney is a remarkable
role model,” Bill Gates tells FORBES, “and the ultimate example of giving while living.”
For the first 15 years of this mission Feeney obsessively hid
the type of donations that other tycoons employ publicists to plaster
across newspapers. Many charities had no idea where the piles of money
were coming from. Those that did were sworn to secrecy. “I had to
convince the board of trustees that it was on the level, that there was
nothing disreputable and this wasn’t Mafia money,” says Frank Rhodes,
the former president of Cornell University
who later chaired Atlantic Philanthropies. “That was difficult.”
Eventually Feeney was outed ( in part due to FORBES), but his fervent
desire for anonymity remained (until this year he had done about five
interviews in his life). Now that his quest to give until nearly broke
is coming to its conclusion, he’s opening up a bit. What emerges is one
of strangest, most impactful lives of all time.
Feeney prefers showing to telling. In Dublin he sends me on a three-hour tour of Trinity College
to witness everything from the library gift shop he designed to his
genetics complex and department of neuroscience, complete with lab rats
with electrodes implanted in their heads. The next day he endures the
six-hour round-trip to the University of Limerick to personally walk me
through its Irish World Academy of Music & Dance, its new medical
school and its new sports center (now home to Ireland’s Munster rugby
team), where hundreds of young kids were playing soccer on the
all-weather turf. Rather than walk me through his life story, he invites
Conor O’Clery , the author of the Feeney biography , The Billionaire Who Wasn’t
(PublicAffairs, 2007), to dinner in Dublin’s Peploe’s Bistro. At dinner
Feeney sits quietly in a frayed navy blazer, sipping chardonnay that he
dilutes with a splash of water, occasionally throwing in a point for
emphasis or, more often, a witty, self-deprecating joke.
The story that emerges is this: Feeney grew up in an Irish-American
neighborhood in the blue-collar town of Elizabeth, N.J., coming of age
in the Great Depression. He served in the Air Force during the Korean
War before attending the Cornell School of Hotel Administration on the
GI Bill. After graduation in 1956 he traveled to France to take more
college classes and later got involved in the business of following the
U.S. Navy’s Atlantic fleet, selling tax-free booze to sailors.
Competition was intense, but he got ahead by using his military
experience to talk his way directly onto ships and gathering
intelligence on the fleet’s next destination by chatting up local
prostitutes.
He brought fellow Cornell alum Bob Miller into the business, and the
pair started selling cars, perfume and jewelry to servicemen and
tourists. They later added tax lawyer Tony Pilaro and accountant Alan
Parker as owners to help manage the bootstrapped business more
professionally. By 1964 their Duty Free Shoppers had 200 employees in 27
countries.
It was a nice little business, but soon the Japanese economic boom
would transform the scrappy operation into one of the most profitable
retailers in history. In 1964, the same year as the Tokyo Olympics,
Japan lifted foreign travel restrictions (enacted after World War II to
rebuild the economy), allowing citizens to vacation abroad. Japanese
tourists, along with their massive store of pent-up savings, surged
across the globe. Hawaii and Hong Kong were top destinations. Feeney,
who had picked up some Japanese language and customs while in the Air
Force, hired smart, pretty Japanese girls to work the stores and filled
his shelves with cognac, cigarettes and leather bags that gift-crazy
Japanese snatched up for co-workers and friends. Soon Feeney and company
had tour guides on the payroll who herded tourists to DFS stores before
they had even checked into the hotel so they couldn’t spend money
anywhere else first.
The Japanese were such lucrative customers that Feeney hired analysts
to predict which cities they’d flock to next. DFS shops sprung up in
Anchorage, San Francisco and Guam. Another target was Saipan, a tiny
tropical island just a short flight from Japan that he predicted could
become a hot beach spot for Tokyo residents. There was a catch: The
island lacked an airport. So in 1976 DFS invested $5 million to have one
built.
The aggressive growth strategy placed DFS in the perfect
position for the subsequent Japanese economic explosion. Feeney received
annual dividend payouts worth $12,000 in 1967, according to O’Clery.
His payout in 1977? Twelve million dollars. Over the next decade Feeney
banked nearly $334 million in dividends that he plowed into hotels,
retail shops, clothing companies and, later, tech startups. He remained
obsessively secretive and low key, but the money was now too big to
ignore.
In 1988 The Forbes 400 issue included a four-page
feature that exposed the success of DFS and the vast wealth of its four
owners. The story by Andrew Tanzer and Marc Beauchamp, and the
subsequent attention, was so jarring to Feeney that O’Clery devoted an
entire chapter of his biography to the episode. The article pulled back
the curtain on how DFS operated: its Japan strategy, the 200% markups,
the 20% margins and blistering annual sales of roughly $1.6 billion.
FORBES estimated that Feeney’s Waikiki shop annually generated $20,000
of revenue per square foot–$38,700 in current dollars, more than seven
times Apple’s current average of $5,000. “My reaction was, ?Well, there
goes our cover, ‘ ” says Feeney. “ We tried to figure out if it did us
any damage but concluded no, the info was in the public domain.” The
piece identified Feeney as the 31st-richest person in America, worth an
estimated $1.3 billion. His secret was out.
But FORBES had made two mistakes: First, the fortune was worth substantially more. And second, it no longer belonged to Feeney.
Although he had shifted his ownership to Atlantic via a complex
Bahamas-based asset swap to minimize disclosure and taxes, Feeney
continued to aggressively expand DFS, traveling the globe to conquer new
markets, expand margins and outmaneuver rivals. He loved making money
but had no need for it once it was made. Feeney was happy with simple
things. He had grown up in a humble, hardworking house and watched his
parents constantly help others. In an oft-told story, each morning his
mother, Madaline, a nurse, would jump in the car and conveniently drive
by a disabled neighbor as he walked to the bus just to give him a ride.
This tradition of charity was not extended to business rivals. “I’m a
competitive type of person whether it’s playing a game of basketball or
playing business games,” says Feeney. “I don’t dislike money, but
there’s only so much money you can use.”
The money was how Feeney kept score, and while it no longer flowed
into his pocket, he helped rake in as much as possible as an active DFS
board member throughout the 1990s. Since his foundation’s wealth was
built on the illiquid stake in DFS, his grants lived and died on the
cash dividends the company paid out–a major problem when the Gulf war
and subsequent dive in global tourism restricted the once gushing cash
flow to a trickle. Even as the economy recovered, a desire for the
freedom of a cash pile, plus a gut instinct that DFS’ best days were
behind it (Japan was clearly slowing down), motivated Feeney to push his
three other partners to start looking for a suitor to buy DFS. There
were few companies big enough to absorb and run the global operation.
The French luxury powerhouse LVMH, helmed by billionaire Bernard
Arnault, was the clear favorite. Feeney got owner Alan Parker on his
side early. Pilaro and Miller would prove harder to convince.
For two years the four owners battled with themselves and Arnault
over prices and deal terms. Each player brought their own high-powered
attorneys into the scrum. “Every time I’d see a new a lawyer I’d say,
?Holy Christ, how much are we paying this guy? ‘ ” Feeney laughs.
Feeney’s philanthropic secret ended in 1997, after he (along with
Pilaro and Parker) sold their share of DFS to LVMH, and the world
learned Feeney’s $1.6 billion cut belonged not to the man but to his
foundation. Through the sale he reluctantly gave up his anonymity but in
the process gained a better tool for good: a powerful following. Two of
the world’s richest men, Bill Gates and Warren Buffett, credit Feeney
as a major inspiration for both the $30 billion-strong Bill &
Melinda Gates Foundation and the Giving Pledge, which has enlisted more
than 90 of the world’s richest to (eventually) grant half their wealth
to charity. “ Chuck is fond of saying that none of us has all the
answers,” says Gates, “but I know that Melinda and I have learned a
great deal from him in the time we’ve spent together.”
Part of the kindred spirit that Feeney and Gates share stems from
their entrepreneurial backgrounds and how they apply them to giving
back. In many ways Atlantic was the forerunner to the Gates Foundation,
practicing high-margin philanthropy: choosing causes that will maximize
the impact of each dollar pledged, whether it’s $250,000 for Haiti
earthquake relief or $290 million to build a new medical campus for the
University of California, San Francisco.
He forces charities to compete for his cash, requesting detailed
business plans with clear milestones and full transparency. If a project
runs off course, Feeney cuts funding. He chooses programs that promise
exponential returns that will allow people to lift themselves up. He
pumps billions into university research in places like Ireland and
Australia because he believes it creates a skilled workforce and
attracts top talent, setting the table for high-tech industry and
foreign direct investment. Operation Smile, a charity that corrects
cleft palates in children from poor nations, is a classic Feeney cause: a
one-time $250 investment to cover the cost of a simple surgery that
will markedly improve every day of the patient’s life. He’s given $19.5
million there.
To further maximize return, Feeney leverages every dollar the
foundation gives–using the promise of substantial gifts to force
governments and other donors to match. In one famous example, in 1997 he
proposed pledging roughly $100 million to Ireland’s universities but
only if the cash-strapped government matched the amount. It did. (A
total of $226 million in Atlantic grants have leveraged $1.3 billion of
government money to its university system.) He works the same tactic
with other wealthy people and development offices. Feeney never slaps
his name on a library or hospital, since he can collect additional money
for the project from more egocentric tycoons who gladly pay millions
for the privilege. Casual observers categorize Feeney as frugal, but
that’s a simplistic diagnosis. On the spending side Feeney obsesses over
value, and on the cost side, he loathes waste. Atlantic’s president and
CEO, Chris Oechsli, recalls staying in a Vietnam hostel with him on one
business trip but adds that Feeney also once sent him back to the U.S.
on the Concorde because he understood the need to get him home in time
for the holidays. As for Feeney, he flew millions of miles in coach
because first class didn’t get him to his destination any faster. He
wears a rubber Casio watch because it keeps time like a Rolex. During
our train back from Limerick he would curse and shake his head each time
we passed one of many abandoned housing developments (ghost estates)
left over from the country’s real estate bust. “I’m always the first guy
to ask how much is that or what does it cost?” Feeney says about living
the high life. “I never tried it because I knew I wouldn’t like it.”
Feeney rarely owned a car because they were difficult to park in
cities–although he admits briefly owning a used Jaguar when he lived in
Hong Kong. No yacht? “I guess the answer to that is I get seasick easy.”
Although he raised his family in multimillion-dollar mansions (his
ex-wife and five children later split $140 million of the DFS fortune),
today Feeney lives out of three foundation-owned apartments in Dublin,
Brisbane and San Francisco, and crashes in his daughter’s apartment
while in New York. Atlantic’s Irish operations are housed in a stately
town house in the posh district off St. Stephen’s Green–Feeney and wife
Helga (his former secretary) live in a small stone mews apartment out
back. Even Feeney’s taxes underscore how he thinks: He has aggressively
tried to avoid taxes at every stage in his career–from setting up his
early business in Lichtenstein, incorporating his holding company in
Bermuda and listing it under the name of his then wife Danielle, a
French citizen–despite gaining no personal advantage in his later years.
Eventually, less taxes meant that he could give away more.
This waste/value mind-set explains how a frenetic penny-pincher is
also completely comfortable deploying massive amounts of cash on
projects where he sees the chance of a high return. Take his recent $350
million pledge that helped Cornell, along with Technion-Israel
Institute of Technology, win the bid to build a $2 billion technology
institute on Roosevelt Island. This Silicon Valley East will attract the
best engineers and students to the region. Feeney is betting top tech
firms and new startups will follow, eventually producing thousands of
jobs and billions of revenue for the region. “The visionary gift will
pay dividends not just for Cornell but for New York City,” says Mayor
Michael Bloomberg. It’s a textbook Atlantic investment, including
leverage in the form of $100 million plus land courtesy of New York City
taxpayers. Feeney’s only regret is that the opportunity came late for
him and he won’t live to see the project completed.
That’s a lesson he wants to teach the new class of philanthropists:
Don’t wait to give your money away when you’re old or, even worse, dead.
Instead, make substantial donations while you still have the energy,
connections and influence to make waves. “People who have money have an
obligation,” says Feeney. “I wouldn’t say I’m entitled to tell them what
to do with it but to use it wisely.” That’s why that man who
obsessively guarded his privacy for decades has participated in the
biography, spent three days with me and on Sept. 6 publicly accepted an
honorary doctorate of law granted jointly from every university on the
island of Ireland–the first time such an award has been given.
Feeney might soon gain access to the biggest megaphone of
all: Hollywood. George Clooney has reportedly considered adapting
Feeney’s story for the silver screen. Who should play him in the film?
Feeney thinks deeply on our way back from Limerick and chuckles before
sharing his answer: “Probably Danny DeVito.” How do you give away $7.5 billion? Follow timeline below of the Atlantic Philanthropies’ greatest hits.
1982: Makes first grant of $7 million to Cornell. Total gifts will reach $937 million. 1984: Transfers his 38.75% DFS ownership to Atlantic. 1988: Gives $142,000 to support the Cancer Research Institute.? Worldwide cancer grants will hit $370 million. 1990: Atlantic makes its first grant to University
of Limerick to construct advanced research, conference and cultural
facilities. Lifetime grants: $170 million. 1991: Funds peace-building and reconciliation in Northern Ireland. 1997: Feeney goes public about his charity activities. 1999: Invests in Vietnam in the areas of higher education and health care.? 2001: Funds biomedical research at Australia’s Queensland U. of Technology; Total Aussie medical grants: $320 million. 2002: Makes grant for South Africa AIDS relief: has invested over $117 million in South African health care. 2004: Begins funding efforts to abolish the death penalty in the U .S. –has invested $28 million to date. 2006: Starts efforts to ensure health coverage for the almost 8 million uninsured children in the U .S. 2008: Makes $125 million grant for medical center at
the University of California, San Francisco Mission Bay campus. Total
UCSF grants: $290.5 million. 2012: With a $350 million investment, supports Cornell’s winning bid to develop NYC Tech Campus on Roosevelt Island. 2016: Will complete $1.3 billion worth of grants. 2020: The Atlantic Philanthropies will close.
Via/ Steven Bertoni/ Forbes
This story appears in the October 8, 2012 issue of Forbes.
Liz has had a lot going on lately; she's had to endure a move and lost some of her favorite clients as a result (anyone that walks past her fence and needs a good barking....), survived a mysterious flea infestation that landed her in more baths than any dog has had in living memory and had to get used to an entirely new yard. Even though she's put on a brave face, to be perfectly honest it's all catching up to her.
I can only hope that she never learns that she is only a 9 pound Maltese Terrier (she totally thinks she is a 90 lb. Pit and will throw down with ANYONE...) because I fear she would have a mental breakdown.
Every fabulous aspect of her being was born of self. There were no antecedents for success or well-being. No examples of how to be a great parent (which she is...). No steward to guide her safely into adulthood. Nope. She invented herself from Day One and though her journey has not always been easy, she is truly as optimistic and joyful as a person can be ( a seemingly super-human feat from my jaded perspective...). She is a constant inspiration and beautiful to the core. I consider her family.
Here she is having successfully placed a horse into a deep meditative state (it's one of her many Super Powers....).
