The Magazine

Money at Work

John M. Olin's philosophy of philanthropy.

Dec 26, 2005, Vol. 11, No. 15 • By LESLIE LENKOWSKY
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A Gift of Freedom

How the John M. Olin Foundation Changed America

by John J. Miller

Encounter, 232 pp., $25.95

IN 2002, THE LAST year covered by a recent Foundation Center study, the Ford Foundation devoted nearly $300 million to "social-justice grantmaking," aimed at making "structural change in order to increase the opportunity of those who are the least well off politically, economically, and socially." Since turning its attention to promoting conservative and libertarian ideas about public policy in the middle of the 1970s, the John M. Olin Foundation spent not much more than that on all its grants. But regardless of their political views, few would deny that, dollar-for-dollar, Olin's influence has been more profound.

With it about to close its checkbook for good, John J. Miller's discerning account of the John M. Olin Foundation's grantmaking record could not be timelier. A Gift of Freedom examines not only what the foundation did, but also how it operated. Miller shows that affecting important areas of public policy--if not quite changing America--requires neither a lot of money nor extraordinary genius, but just the kind of convictions and experience that many of those with the wealth to establish foundations possess.

Before the 1970s, no one would have expected John M. Olin to devote his giving to changing much of anything. A chemist and the head of a successful manufacturing company, Olin adopted an approach to philanthropy that looked like that of most wealthy businessmen: large contributions for hospitals, museums, university endowments, research on diseases, conservation, and other conventional causes. He even bred dogs and horses, including a Kentucky Derby winner.

But the 1960s changed that. A graduate and later a trustee of Cornell, Olin was a loyal benefactor until a group of students, armed with rifles, took over the student union, demanding the creation of a black studies program and other changes. Afterwards, he wrote that "it is unfortunate that Cornell is suffering with the impact of such ill-advised demonstrations," and called on the school to raise its admissions requirements. More turmoil followed, including Watergate, which forced out of office a president to whose reelection Olin had contributed $100,000.

These events led Olin to rethink his philanthropy. In the spring of 1973, he told Frank O'Connell, the executive vice president of his company, that he wanted to use his fortune to preserve the political and economic system that had made its accumulation possible. This was not a novel idea. Nearly a century earlier, Andrew Carnegie had urged his fellow Gilded Age industrialists to do likewise. But instead of supporting libraries and other institutions that might help the poor or other potentially disaffected groups reap the benefits of the American dream, as Carnegie had done, Olin recognized that the principles underpinning American life itself were now under attack and required a strategy for defending them.

At the time, business leaders such as David Packard and future Supreme Court Justice Lewis Powell were voicing similar views. Resigning from the board of the Ford Foundation in 1977, Henry Ford II chastised its management for not being sufficiently supportive of wealth-creating measures. Other grantmakers, most notably the Smith Richardson and Sarah Scaife foundations, were also developing programs to do something similar to what Olin had in mind.

But what distinguished the John M. Olin Foundation was its single-minded devotion to the purpose its founder set out for it. As Miller explains, this was partly because its trustees and leaders shared Olin's view--particularly the man Olin selected as the foundation's president, former treasury secretary William Simon, whose experience in the Ford administration had convinced him that the nation's core principles were indeed endangered. (After Olin's death in 1982, Simon became the main architect of the foundation's activities.) The foundation's program staff was led initially by O'Connell, and then by Michael Joyce and, eventually, James Piereson, brought to their jobs intellectual substance as well as administrative ability. Finally, a small network of like-minded advisers helped the staff identify projects in line with its objectives.