The Billionaire Who Wasn't (17 page)

Over a number of lunches and dinners in the late 1970s, as Feeney's estimated wealth approached a quarter of a billion dollars, he and Dale began talking about serious philanthropy. Fond of telling business associates that they should think big, Feeney applied the same advice to himself as he struggled with the concept of serious giving. It wasn't long before Dale realized that what was gestating in Feeney's mind was something radical, that while Feeney relished his continuing success in business, he wanted not just to be a generous donor but to shed the burden of wealth and assume responsibility for its charitable use.

As their conversations progressed, Dale introduced Feeney to the literature of giving. He quoted to him the advice the Reverend Frederick Gates gave to his employer, John D. Rockefeller, the world's first billionaire: “Mr. Rockefeller, your fortune is rolling up like an avalanche! You must distribute it faster than it grows! If you do not, it will crush you and your children and your children's children!” They discussed the writings of Andrew Carnegie,
the son of a Scottish immigrant to the United States, who accumulated a massive fortune providing iron and steel for American railways in the late nineteenth century, and who gave away much of it during his lifetime to fund the establishment of libraries, schools, and universities.

Feeney reread several times Carnegie's famous essay, “Wealth,” first published in the
North American Review
in 1889. The philanthropist argued that there were three ways to dispose of surplus wealth: It could be left to the family, bequeathed to the government, or given away while alive, preferably to those who could use it well. The first was motivated by vanity and a misguided affection for the children, who were so burdened that it amounted to a curse; the second required the owner to die before the wealth was used and his wishes could then be thwarted; and the third ensured that surplus wealth was put to good use and not dispersed over hundreds of years in trifling amounts. The best way to use wealth, concluded Carnegie, was to provide “the ladders upon which the aspiring can rise”—such as universities and libraries. Carnegie also cautioned that a man of wealth should set an example “of modest, unostentatious living, shunning display or extravagance.”

What Carnegie advocated was to have a profound effect on the New Jersey entrepreneur. “I do remember somebody gave me a copy of a speech that Carnegie had given at Cornell, and for some reason I researched that speech and read two books on Carnegie,” recalled Feeney. Harvey Dale, who is Jewish, also introduced Feeney to the writings of Maimonides, the twelfth-century Jewish philosopher who taught that the highest of eight levels of
tzedakah,
or giving, was to help a fellow Jew to become self-sufficient through training and education, and that the second-highest level was giving in such a way that the donor did not know the donee, nor did the beneficiary know where the money came from. They discussed the fact that among all religions, the highest form of giving had always been that which was not motivated by ego, or by the prospect of political or social leverage, which relieved the beneficiary of any feeling of shame or indebtedness or the expense of a public ceremony to honor the donor. Jesus Christ advised givers in the Sermon on the Mount: “When you give alms, sound no trumpet before you, as the hypocrites do in the synagogues and in the streets, that they may be praised by men.” The Qur'an stated, “If you declare your charities, they are still good. But if you keep them anonymous and give them to the poor, it is better for you and remits more of your sins.”

Dale guessed that Chuck wasn't initially motivated by anything that had to do with Carnegie or Maimonides, or indeed with any religious teaching. He felt it was inevitable, given Chuck's natural goodness and the culture he brought with him from his boyhood in New Jersey, that he would consider using his fortune to help others. “He just became more and more interested in giving back and not owning,” he recalled.

Feeney also decided that whatever he did it would be done anonymously. There were two principal reasons for this, he reflected. He did not want to “blow my own horn”—just as his mother never let the neighbor with Lou Gehrig's disease know she was going out of her way to give him a lift—and he did not want to discourage other contributors from giving to the same deserving cause, which he thought would be the inevitable outcome of publicity. He had also been inundated with requests after giving sizable donations to Cornell, and he did not want that to continue.

Giving away large amounts required the setting up of a specific foundation in a carefully chosen location, especially if Feeney decided he wanted to transfer to such a foundation any of his business assets as he seemed to be indicating, and if he wanted his giving to be international in its scope. Harvey Dale set out to do a worldwide survey of jurisdictions that would accommodate Chuck's requirements. The United States was ruled out as a base. Anonymity would be almost impossible, and the U.S. government was at that time moving to bar foundations from holding a concentration of business assets, as federal authorities had found evidence that many wealthy Americans were using philanthropies simply to perpetuate control of their corporate interests.

Dale considered the Channel Islands and the Bahamas and finally settled on Bermuda. The twenty-one square miles of self-governing British territory in the middle of the Atlantic imposed no direct taxes on personal or corporate income, did not levy taxes on charities or foundations, and did not require public disclosure of foundations. Bermuda also allowed a philanthropy to fund good causes worldwide. It had a highly developed economy and financial structure, and Feeney's company, General Atlantic Group Ltd., was already registered in Bermuda, in a little office opposite a bakery delicatessen on Washington Mall in the capital, Hamilton.

But to set up a foundation in Bermuda, a person had to be a resident for a year. And that meant not just Chuck but Danielle, as everything was in her name. In March 1978, Feeney bought a large villa in Bermuda with the help
of a local banker, Cummings Zuill, a member of an old Bermuda family whom he had met when Zuill was working in Hong Kong for the Bank of Bermuda. The Feeney family moved there in the summer of 1978. “Chuck will say that was my punishment visited on him,” said Harvey Dale. “Danielle will certainly say that!”

Called Woodlands, the Bermuda villa had lush gardens, a pool, and a tennis court. It was located on a country road lined with yellow and white oleander hedges, brightly colored hibiscus, and manicured lawns near the coastal town of Paget. There were pink beaches nearby and inlets lined with palm trees. Golf clubs and yachting marinas were within easy reach. All around stood fine old colonial houses with coral stone walls and cedar beams. Right next door was an eighteenth-century colonial building housing the five-star Fourways Inn, where the piano player wore a tuxedo, and the waiters sported shirt, tie, and shorts with knee-length socks. The capital of Hamilton was only a short distance away.

Danielle hated it. It was 640 miles from the United States and 3,500 miles from Paris. She didn't know anybody, it rained a lot, and she failed her Bermuda driving test and had to rely on the gardener to go into town. The house was run down inside. She found little cultural life to her liking in the semitropical Atlantic island. “Bermuda was small town, middle class with English expats, the ladies lunched, played tennis and had tea,” recalled their daughter Leslie. Her vibrant French mother “stuck out like a sore thumb.”

Chuck was often away on business. He didn't like Bermuda that much, either. He had no interest in the golf, sailing, or deep-sea fishing that consumed the free time of other foreign businesspeople who took up residence in the British territory. When he was there, however, he did what he always loved doing, helping organize kids and giving others the benefit of his expertise. There was a school next to where they lived, and he helped coach the basketball team. He also became a member of the Bermuda tourism advisory board. Their youngest children, eleven-year-old Diane and eight-year-old Patrick, were enrolled in Bermuda schools. The teenagers, Juliette, Leslie, and Caroleen, moved into the Manhattan apartment on Fifth Avenue along with a Chinese amah Chuck brought over from Hawaii, and were enrolled in American schools.

The Feeney kids, too, were less than enamored of “Boremuda,” but they had some fun times there, especially during school vacation, when Feeney would entertain the friends they brought from abroad in the sprawling
house, up to two dozen at a time, with the girls sleeping upstairs and the boys in downstairs rooms that were turned into dormitories. He could be a demanding parent. He required the children to work on vacation—Patrick sold ice cream—and to adhere to strict budget rules. He gave his daughters in New York responsibility for paying their expenses out of budgets he allocated so they would learn the value of money. He took this to some lengths. When his daughters and a teenage friend ran up a large phone bill calling boyfriends in Europe from the Manhattan apartment, he came to town, disconnected the telephone, and put a map of New York City on the wall of the living room, on which he circled neighboring pay phones. He hung from it dimes stuck on scotch tape. If friends called on the second phone, which was in the spare bedroom he used, and he happened to be there, he would tell them to call the public phone on Sixty-first and Fifth in five minutes. When guests came to the apartment after celebrating his fiftieth birthday in a restaurant, his daughters begged him to take the dimes off the wall, but he wouldn't. The adult guests saw the funny side. One said, “I'm going to do this for
my
kid!”

Shortly after arriving in Bermuda, Chuck and Danielle created their first, named, charitable venture. They called it the Davney Fund. The word Davney was an amalgam of his mother's maiden name, Davis, and his father's name, Feeney. It was not registered as a foundation, as it was just a way of “test-driving” a system for making anonymous payments to individuals and educational and charitable organizations, prior to setting up a real foundation. Having gotten ahead in the world through a GI scholarship, Feeney used the fund mainly to give a leg up to other talented, aspiring kids of modest means, especially the children of his employees. “Davney was my first real attempt at putting something back,” said Feeney, who channeled $1 million into the fund in its first year.

Chuck recruited his sister Ursula in New Jersey to administer the Davney Fund. She flew to Bermuda to create a bank account. “I can remember Cummings Zuill going to the bank to set up the account, and he was in shorts and I thought, ‘What kind of a banker is this, dressed like that?'” Among the first beneficiaries were the four children of a fireman who looked out for Feeney in military service, and who had died of a heart attack. “I want to make sure all those children are educated,” Chuck told his sister. Ursula also ran a two-week camp in Hawaii for about two dozen deaf and blind kids with money from the Davney bank account. She learned a
lesson in giving: The beneficiary has to deserve the help. The fund provided grants of $2,000 each for some twenty children of DFS employees in Hawaii. “The kids went to a particular college where they got their degree by just signing in and out,” recalled Ursula. “I decided, witch that I am, that maybe they ought to send me their grades. You'd be amazed how quickly a couple disappeared. The candidates weren't getting a free ride to college. They had to get their grades up to snuff.”

The dialogue between Chuck and Harvey, meanwhile, had evolved to the point where it became clear that he was intending to put everything into a foundation—the DFS shareholding, the businesses, and all his investments. He would make sure Danielle and the children were taken care of, and the houses would remain in the family, but that was all.

It was a progression of his thinking, a “slope line,” recalled Harvey Dale, who thought Feeney reached the decision sometime between 1980 and 1982. “Chuck's time clock is different from that of anybody I know. He quite often takes important decisions and sort of lets them marinate. Time passes until he gets to some place internally where he has comfort with a direction.” Feeney himself cannot remember a “going-over-the-cliff ” moment. Nor did he philosophize much about his decision after he reached it. “I came to the conclusion I didn't need a lot of money because I didn't intend to live a lifestyle that required it,” he said simply.

While he was mulling this over, Feeney made his first major individual gift. In 1981, he was contacted by Ernie Stern, the fund-raiser for the twenty-fifth anniversary of the Cornell Class of '56. At that time it was the custom for alumni from Cornell to get together to give a total gift of $250,000 to the university on the twenty-fifth anniversary of their graduation. Stern was persuaded to aim for $1 million by one of the wealthier alumni, John Lindseth, whose father, Elmer, was president of the Cleveland Electric Illuminating Company. The university development office warned him that he was setting goals that were unrealistic. Stern tracked Feeney down to help. “I remembered him vaguely as the sandwich guy. I think his main thesis was—not too heavy on the salami or the bologna, more bread!” Feeney responded by writing a check for $700,000. “We ended up raising $2 million,” said Stern.

Feeney thought the exercise made his class look good, but he felt that it didn't resolve any specific need of the university. His urge to give came with a strong belief, drawn from the example of his parents and based on his own
entrepreneurial bent, that he should bring into play the talents that had enabled him to amass that money to make sure it was put to good use, which meant more than just writing checks.

Setting up a registered charity with the specific provisions Feeney wanted proved complex. The foundation had, for example, to get around Bermuda's very narrow interpretation of charitable activities—which did not permit giving to sports, something that with his love of sport Feeney might want to do. Establishing a unique charity that could give anonymously, possess businesses, and operate worldwide required in the end a special act of the Bermuda parliament. In 1981, Harvey Dale engaged an English-born lawyer, Frank Mutch, from the island's biggest law firm, Conyers Dill & Pearman, to help draft the necessary legislation. A year later, they presented their draft bill to the Private Bills Committee in the Bermuda Assembly. It provided for setting up a charitable foundation to be called the Atlantic Foundation. To reassure the parliamentarians they were genuine, the bill empowered the Bermuda Charity Commissioners to oversee the Atlantic Foundation's operations. The committee approved the Atlantic Foundation Company Act, 1982, and it was nodded through the red-carpeted House of Assembly.