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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Wealthy Ceos Are Giving Back

Cal Thomas Los Angeles Times

Some successful, wealthy New York City business people are in a van traveling to Bedford-Stuyvesant in Brooklyn, an area often used as a backdrop for politicians who make empty promises to redeem the poor.

But this trip is different. The chief executive officers from Tiffany, several banks, the phone company and the chamber of commerce are looking for ways to start businesses that create real jobs, revitalize long-neglected neighborhoods and even bring a return on the investments they want to make.

How could this be? Aren’t these the “greed-decade” fat cats who cared nothing at all about the poor and were enriched by Ronald Reagan’s tax cuts? A central theme of Bill Clinton’s candidacy and first year in office was to make the wealthy pay their “fair share” in taxes. That’s what the retroactive tax hike was about.

Enter financier Henry R. Kravis, who organized the New York City Investment Fund last fall.

Each member contributes $1 million to belong. The fund currently has $57 million in assets.

Kravis, who gained notoriety in the 1980s for his leveraged buyouts, wants you to know this isn’t about charity. Money is to be invested, not given away. Call it “compassionate capitalism.” Kravis stated his motivation: “Are we doing social good for a community? Are we taking into consideration issues for the stakeholders other than just making a profit? It has to be both.”

Re-created lives and neighborhoods are the fund’s objective.

Although many of the business leaders grew up in New York City, they never had visited its poorer sections before. Now, in addition to the $1 million contributions, members are expected to donate time and the efforts of their employees.

Russell Carson, a general partner in a large investment firm, told The New York Times he thinks the power of the fund will be the creation of cadres of corporate experts who can negotiate deals, pick sites and call on contacts nationwide. “The level of brainpower is all out of proportion to the level of funds,” says Carson.

Kravis says he felt that while he knew how to make huge sums of money, he lacked experience in giving. So 10 years ago, he contacted David Rockefeller for advice. Rockefeller had led the New York business community to perform noble work in the ‘60s and ‘70s.

Rockefeller says he told Kravis to get involved personally and not “just be a money man - get out and lead.” Which is what Kravis has done.

The New York City Investment Fund’s money will go to companies and programs that can create jobs in blighted neighborhoods. Projects will be evaluated on the basis of their potential to stimulate employment, benefit communities and boost the local economy.

Investors also want to see the new businesses pay back their investment within five years. No subsidies or grants will be given, and very small businesses without the potential to grow and increase jobs will not be considered.

In addition to whatever material benefits come to those on the receiving end of this largess, these business leaders are about to see themselves transformed. Nothing is more fulfilling than witnessing a changed life, unless it is watching one’s own life change as a result of helping transform the lives of others.

The New York City Investment Fund is encouragement to other business leaders, and many of them searching for an example may want to follow Henry Kravis and his fund.

New Yorkers love to chase trends. One can envision a bumper sticker on limousines: “Are you transforming a neighborhood today?”

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