Thursday, May 03, 2007

Riding Through The Glen

If there's one thing that New Yorkers like more than making money, it's finding creative ways of giving it away. Philanthrophy is at the core of New York social life, with every notable museum, charity, and place of learning hosting regular and increasingly elaborate fund-raisers.

One of the finest charities in New York is the Robin Hood Foundation, founded by billionaire investor Paul Tudor Jones. Thanks to the generosity of its Board members who agree to fund all expenses, 100% of the money it raises goes directly to good causes.

I somehow managed to blag a free invite to their highly secretive annual fundraiser last night, where 4,000 people including most of the city's main financial movers and shakers, as well as the likes of Ben Affleck, Sharon Stone and Martha Stewart, wined, dined and enthusastically waved their Blackberries in the air when Aerosmith came on to provide the entertainment. It was like Glastonbury for rich people (and me).

However before Steven Tyler could belt out the first notes of 'Love in an Elevator', the auction had raised an unbelievable $72million. To put this into perspective, this is almost as much as Live Aid raised, and we didn't have to be subjected to 'Do They Know It's Christmas?'. It would probably have been enough to buy Charlton Athletic too, a desperate cause if ever there was one.

I have long ceased to be surprised (or more pertinently envious) of the incredible amount of wealth visible everywhere in New York, but the auction was a sight to behold. An all-expenses paid VIP trip to the 2008 Olympics.?.....$2.3million. The opportunity to sing 'Walk This Way' on stage with Aerosmith?.....$800,000. And then the coup de gras (impeccably timed just as the alcohol was really flowing).....a simple request for donations of exactly $1million each to help fund new investment in New York charter schools. Over twenty people raised their hands.

There is no doubt that the likes of the Robin Hood Foundation, by applying business principles to grant-giving, allied with the '100% rule', are setting new standards for accountability in the traditionally sleepy world of charities. It's ever so American too; a natural distrust of government has created an economic system which permits extraordinary wealth-creating potential (as well as grinding inequality), but within a society that places considerable peer pressure upon giving much of it away. Nobody emphasises this more than Warren Buffett, the 4th richest man in the world.

Whilst watching this wanton display of wealth, I couldn't rid myself of this nagging sense that there perhaps wouldn't be quite so many needy causes if the tax system permitted just a little more trickle downwards. One particular fact, emblazoned on the big screens, really stuck with me.....52% of New York City babies are born into poverty. However despite such damning statistics, it is a point of view which, had I expressed it would likely have gone down like Leeds United.

They would argue of course that Europe could never quite shake off its statist bent, and as a result the likes of France are stuck in a quasi-permanent economic malaise. There is also a general suspicion of the wealthy, whereas in the US they are almost universally revered and imitated.

Moreover, governments they would suggest are notoriously poor allocators of capital (corrupt even), and these decisions are best taken by professionally-run charities, managed along private sector lines. Its a point of view that I understand, and agree with to a degree, but I'm tempted to argue that America's inequality of both outcome (and increasingly opportunity) is equally unsustainable, if only because of the sheer number affected.

It was interesting to witness this philanthropic spectacle, because just three days earlier I had flicked through the Sunday Times Rich List, which is front-loaded with billionaires from Russia, India, Sweden, Norway and Iran. If you subscribe to the view that London has now clearly surpassed New York as the centre of the universe, then much of your evidence will be drawn from the influence of this foreign money. However it's not London's leafy squares they're attracted to, but instead a tax system which treats foreign-domiciled residents with kid gloves, comfortable that their lavish spending will outweigh their failure to replenish the government's coffers. The US meanwhile continues to tax its citizens and residents on their global income, regardless of where it's earned.

The concern for London should thus be the extent to which this foreign invasion is a permanent phenomenon. If a similarly exhuberant fund-raiser was held in London, you might wait a while to hear a cut-glass English accent. It was noticeable however that last night's attendees were overwhelmingly American, and probably New Yorkers to boot; the accents were most definitely more Brooklyn than Bombay. Whilst both cities have plenty to be proud of, and a myriad of problems too, surely this permanence of New York wealth holds the city in better stead than the foreign flavour of London's, whose protagonists might pack up their bags on an accountant's whim?


At 9:59 AM, Anonymous Anonymous said...

how much did you donate?

At 11:52 AM, Anonymous newyorkaddick said...

Singing alongside Aerosmith was something I'll never forget.


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