Giving Away a Personal Treasury

William Simon works to insure quick disbursement of his fortune

By GRANT WILLIAMS

William E. Simon, the former Treasury Secretary and a long-time apostle of conservative politics, approaches the AIDS patient in the small room at the Terence Cardinal Cooke Health Care Center in East Harlem. Mr. Simon quietly prays, gives the man rosary beads and a communion wafer, and rubs water blessed at the Roman Catholic shrine at Lourdes on the hospital patient's forehead, cheeks, and arms.

It's a scene Mr. Simon has repeated with thousands of terminally ill and destitute patients at this hospital and others over the past eight years. And even though he has made $80-million in charitable contributions over the past 30 years and is now making plans to give away the rest of his fortune of more than $350-million, Mr. Simon says that it is moments like this that are the true measure of his philanthropy.

"Writing checks for charities is necessary and important," says Mr. Simon, 70, a lifelong Catholic who created the William E. Simon Foundation 31 years ago. "But itcan't compare with corporal works of mercy, which are infinitely greater. My Eucharistic ministry is the most important thing that I do and have ever done."

The William Simon most Americans know is not the magnanimous volunteer but the outspoken government official and foundation leader who fervently promotes limited government and free enterprise while attracting both diehard friends and enemies.

During the 1970s, as the nation's first energy czar and as Treasury Secretary during the Nixon and Ford Administrations, Mr. Simon fought so hard for conservative principles that some Presidential aides, whom he irritated with his blunt style and willingness to talk publicly of his views, called him William the Terrible.

In the 1980s, Mr. Simon made millions as a pioneer of the leveraged buyout, which prompted a rash of mergers and acquisitions and which changed the way business deals are negotiated in America.

Over the past two decades, he has riled liberals by promoting conservative ideas in his two best-selling books on politics and, as president of the John M. Olin Foundation, by steering money to causes on the right.

Mr. Simon has long railed against corporations that make grants to groups that are opposed to the interests of big business -- and against foundations that he believes have lost touch with the views of their founding donors.

Now Mr. Simon, who is chairman of William E. Simon & Sons, a private investment firm and merchant bank that he started 10 years ago with his two sons, is working to avoid any such problems with his own money.

During the past year, he devised a plan that, upon his death, will place his wealth in trusts that will funnel hundreds of millions of dollars over 15 years into his William E. Simon Foundation. That money, he has determined, must all be spent during his children's lifetimes, in the decades immediately after his death.

Mr. Simon says he expects to give $10- to $20-million or more each year for the rest of his life -- while managing his in vestments in the hope that they will continue to grow so that he can give even more.

"It's fair to say that he is now working for charity," says Dan Mosley, a lawyer who helped Mr. Simon set up the trusts, "because he's investing his money and achieving returns, and those returns go to the benefit of charity."

To insure that his wishes are carried out, Mr. Simon put his two sons and five daughters on the board of his foundation and, with their help, wrote a new mission statement for the fund that puts on paper his long-time philosophy of helping poor and needy people help themselves -- a policy he expects his children and other board members to follow.

"I'm kind of coming down the home stretch," says Mr. Simon, whose excellent health allows him to spend long days on his charity and investment work and travel the globe. "I wanted a mechanism in place so that when I die, the giving will be done thoughtfully with children who are prepared to do what we all agreed on. I didn't want to be giving money away with the idea that I had to hurry up."

Mr. Simon, who never shows up on lists of major philanthropists in spite of his sizable donations to charity, says that he has been reluctant to talk about his plans.

"I've been very reticent because it's in danger of coming out as self-aggrandizement: 'Simon the great philanthropist,' " he says. But he said he revealed his plans to The Chronicle because "I'm hopefully going to get to inspire other people to think about doing the same thing."

Mr. Simon has been involved with charities since he began his career as a Wall Street bond trader in the 1950s. In fact, his list of affiliations with charities over the years has helped stretch his entry in Who's Who in America to the longest one in the book.

For example, Mr. Simon was president of the U.S. Olympic Committee during the 1984 Games in Los Angeles and Sarajevo, and he was chairman of the U.S. Olympic Foundation for 12 years. He is a trustee of the John Templeton Foundation and has served on the board of the Heritage Foundation.

Mr. Simon's charity service has not been without its difficult moments. He was on the board of Covenant House in New York when its founder was accused of sexual and financial misconduct, and was an honorary trustee at Adelphi University when its president was embroiled in controversy over his compensation.

Mr. Simon was also a major donor to the Foundation for New Era Philanthropy, contributing over $3-million before the charity was discovered to be operating a Ponzi scheme that cheated many donors and non-profit organizations out of millions of dollars.

In his giving, Mr. Simon has supported a wide range of charities, including hospitals, arts groups, think tanks, and shelters for battered women, a cause of his late wife, Carol G. Simon.

His politics can often be seen in his giving habits. He and his family gave $1-million to the Gladney Center in Texas to endow the adoption- and maternity-services organization. "I'm pro-life to a militant extent," says Mr. Simon. "If I can promote adoption, I'm hitting a home run."

And he has set up numerous university chairs designed to foster free enterprise, last year giving more than $1.1-million to Hillsdale College in Michigan, an institution he praised for its refusal to accept federal money and its "opposition to the politicization of college and university curricula."

Mr. Simon has always taken a dim view of indiscriminate donations to colleges and universities. As Treasury Secretary in 1976, he recommended that corporate gifts to such institutions be based on whether their teaching policies were favorable or unfavorable to the free-enterprise system -- a theme he still vigorously promotes.

In fact, over the years, he has frequently heaped scorn on company donations to liberal organizations of any kind -- "the seemingly relentless determination of America's largest business corporations to set aside a portion of their earnings for the benefit of their enemies," he wrote in the preface to the 1988 edition of "Patterns of Corporate Philanthropy," an annual report by the conservative Capital Research Center.

Mr. Simon says that his disgust with watching foundations started by conservative capitalists like Andrew Carnegie, Henry Ford, and John D. MacArthur veer to the left after their deaths has led him to take special care with his own plans for the future.

"As foundations go through one generation to the next, the second generation -- and probably well before the first is finished -- has forgotten what the original mission was about: the donor's intent," says Mr. Simon, who at one time was a member of the board of the John D. and Catherine T. MacArthur Foundation. "When I speak at my foundation's meetings, I'm persuasive in my point of view, but I can't pass that fervor down to anybody else. No way."

Mr. Simon says that the Olin Foundation, which he has headed since 1977, provides a good example of how a foundation should operate and wind down after its founder's death. John Olin, a conservative businessman, had been alarmed by the Ford Foundation's slide into liberal policies -- which caused Henry Ford II to sever all ties to the organization -- and by the similar fates of other funds.

Before Mr. Olin died, in 1982, "John would tell the board, 'You must make sure that this never happens to us, that you adhere to what I want, and that we're going out of business,' " says Mr. Simon.

The trustees kept faith with Mr. Olin, says Mr. Simon, and the foundation is on track to spend all of its assets within the next 10 years.

"The William Simon Foundation will also purposefully run itself out of business," says Mr. Simon. "I don't want it around after my children are deceased or have lost interest. I'm not even going to trust them totally to do everything I want. If God will just give me 10 more years, we'll have the foundation crooning along and have it grooved well enough that it will be doing all the things that I think are important."

That point of view rings home to the seven Simon children, who range in age from 30 to 46, says William E. Simon, Jr., the oldest sibling.

"Dad's predilection to not have the foundation last beyond our lifetimes really puts a greater responsibility on us," he says. "To spend it all, we'll have to be that much more thoughtful and be willing to spend that much more time at it."

He adds: "I'd kind of like to see the foundation last longer than Dad would. For me to have the opportunity to work with my brother and my sisters on something like this is great, and I'd like to have our children have the same opportunity to work with their cousins. But Dad feels strongly that it shouldn't work like that."

The elder Mr. Simon says he has groomed his children to follow his practice of being "as careful with my charitable giving as I was in the business decisions that I made."

"I'm giving away a lot of my money -- all of it," he says. "So I demand that the charity be as fastidious in its operations as I am. I want to know what their overhead is, how they handle their investments."

In recent years, Mr. Simon has run his foundation with help from just a couple of people. "It doesn't take a genius to run a foundation," he says. "It takes hard work to make sure that where you are giving is really where it's going to go."

Son J. Peter Simon, 45, says he foresees the need to hire a few staff members in coming years as the amount of money available to give away grows. "If you're not a task master," he says, "you'll never get the money out the door."

William Simon says that the key experiences that have changed the course of his life -- and his views of the need to give time as well as money -- stem not from the world of business or politics but from his bedrock Catholic faith and its imperative to help the less fortunate.

He points to three key "revelations" in his life: volunteering at Covenant House, becoming a Eucharistic minister, and making the first of many pilgrimages to Lourdes, the Catholic shrine at the foot of the Pyrenees in France, after he joined the Knights of Malta, the highest lay order in the Catholic Church.

"Infinitely more important than sharing one's material wealth is sharing the wealth of ourselves -- our time and energy, our passion and commitment, and, above all, our love," he told parishioners at St. Vincent Ferrer's Church in Manhattan this spring.

Because of that philosophy, Mr. Simon put in his foundation's bylaws that his children must do several hours of volunteer charity work each week to keep their seats on the board.

Mr. Simon says that his children are beginning to suggest grant recipients and to assist in determining whether they are deserving. The Simon children will each be allowed to earmark $50,000 in grants annually for charities of their choice without gaining the approval of other board members. Remaining grant decisions will be made by the board, which, in addition to Mr. Simon and his children, includes Mr. Mosley, the New York lawyer who helped Mr. Simon set up the trusts, and James Piereson, executive director of the John M. Olin Foundation.

The newly crafted mission statement of the William E. Simon Foundation essentially codifies the goals that its benefactor has always had for the fund. "It's no change in my philosophy," says Mr. Simon. "The only change will be identifying new charities to give to."

According to the statement, the foundation supports programs "to strengthen the free-enterprise system and the moral and spiritual values on which it rests: individual freedom, initiative, thrift, self-discipline, and faith in God."

The main purpose of the fund is to assist the needy by providing the means by which they may help themselves. Mr. Simon says he has deliberately attempted in the mission statement to draw heavily from the thoughts developed a century ago by the capitalist and philanthropist Andrew Carnegie in his 1889 essay, "Wealth."

"In bestowing charity," wrote Mr. Carnegie, "the main consideration should be to help those who will help themselves; to provide part of the means by which those who desire to improve may do so; to give those who desire to rise the aids by which they may rise; to assist, but rarely or never to do all." (Excerpts from the Carnegie essay that Mr. Simon says influenced him appear below.)

Mr. Simon's strong belief in helping those who help themselves can be seen not only in his choice of causes but also in his selection of which charities to support and which ones to avoid. Grant seekers say he is rigorous about making sure that an organization operates efficiently and effectively.

"Bill's heart is in the right place, but it doesn't interfere one bit with his head," says the Rev. John Catoir, whose charity, Eva's Kitchen and Sheltering Programs -- located in Paterson, N.J., Mr. Simon's birthplace -- received a $1-million gift from Mr. Simon. "He demands very strict accountability. He has to be absolutely sure that you are going to do with the money what you say you are going to do."

Father Catoir adds that Mr. Simon's "businessman's approach" belies an inner warmth. "He can be very caustic at times," Father Catoir says. "He does not suffer fools gladly. But beneath that surface there is a deep compassion."

Mr. Simon admits that he does not hesitate to speak his mind, even if he offends. "I engender great emotions in people," he says. "People need bracing sometimes."

As with many donors, Mr. Simon's philanthropy cannot be defined only by its political objectives. Some of his support goes to causes that have personally affected him and his family. For example, he has donated more than $4-million to Lafayette College, his and his son Peter's alma mater, and more than $3-million to New England College, the alma mater of three of his daughters.

In April, Mr. Simon and his children gathered in New Jersey for the dedication of a health facility named for his late wife -- the Carol G. Simon Cancer Center at the Morristown Memorial Hospital. Mr. Simon made a gift of $2.5-million to help establish the center. He and Mrs. Simon, who died of breast cancer in 1995, had long supported the hospital through volunteer work and contributions, with Mr. Simon doing his Eucharistic ministry work with terminally ill patients.

"The Simons have always been fully committed to the work here, and not just financially," says Richard P. Oths, president of Atlantic Health System, which includes the Morristown hospital. "With all due respect, money is wonderful, but when you also give a part of yourself through your time and body and soul, that's nice too."