Wealthy donors are pulling out of New York City’s escalating problems

At first glance, this might seem like the right time for New York City’s deep-pocketed philanthropists to flex some muscle.

Mayor Eric Adams says the city is teetering on the brink of budget disaster, driven in large part by the cost of housing and feeding the rising numbers of migrants entering the city. He has asked New York’s millionaires and billionaires must step in and help close some of the budget holes that have led to major cuts to schools, libraries, parks and the police.

But even under a mayor who has explicitly cast himself as a pro-business leader eager to work with philanthropists, wealthy New Yorkers, accustomed to seeing returns on their investments and clear results from their donations, are confronted with the limits of the extent to which their generosity can truly shape. a struggling city.

Much of New York’s influential philanthropic class, which for years has harbored grand ambitions about how private money can influence public life, has recently become wary of giving to charities aimed at tackling its biggest problems of the city, according to conversations with more than twenty donors and philanthropic advisors. and fundraisers. In some cases, donors choose to spend their money on uncontroversial local causes or on issues outside the city.

They worry that the city’s complex tangle of crises — migrants, homelessness, housing and the cost of living — won’t be easily resolved, even if philanthropists band together to help.

Donors who once found a unifying local cause in charter schools are reckoning with a political backlash and the reality that their wildest ambitions to improve education have not materialized. And some philanthropists who supported the city during the height of the coronavirus pandemic are now turning their attention to the presidential race and the war between Israel and Hamas.

At the same time, donors — few of whom have strong ties to Mr. Adams and his inner circle — have noted escalating questions about City Hall’s ability to manage the city’s many problems.

‘Not a hopeful message’

A recent fundraising campaign to support asylum seekers provided a striking example.

The effort, which was a top priority last year for the Mayor’s Fund to Advance New York City, a city-run nonprofit that works with donors, raised less than $3 million in cash, in addition to the equivalent of $2.7 million in in-kind donations, most of which came from philanthropic organizations rather than individual donors. Mr. Adams has said that providing services to migrants could cost the city as much as $12 billion in coming years unless the federal government intervenes.

There is precedent for New York’s wealthiest to help migrants into the city. When waves of European immigrants arrived in New York in the late 19th century, the city’s philanthropists banded together to create settlement houses, which provided social services and insights to local government on how best to deal with migrants. Many of these organizations still influence city life.

But today, “there’s no hopeful message here that people want to invest in,” says Grace Bonilla, who runs the charity United Way in New York City.

“It’s a difficult conversation to have with donors when your mayor says, not only do we not have good solutions to a problem that should be solved by the federal government, and I agree with that, but we are also cutting back on budget. ” she said.

Ms Bonilla said there was still a sense of “exhaustion” from the pandemic as philanthropists were able to see the tangible results of their donations. Even some wealthy New Yorkers who fled the city during the worst of the pandemic contributed heavily to public relief efforts, in some cases holding their noses to fund initiatives led by former Mayor Bill de Blasio, who was critical of what he considered the excessive role. of private money in city politics.

The Mayor’s Fund raised more than $77 million during the fiscal year that included the first half of 2020, the largest harvest since the final year of former Mayor Michael R. Bloomberg’s term. The fund raised just under $10 million, including a portion of donations to the Migrant Support Campaign, during the first full fiscal year of Mr. Adams’ mayor, which was the lowest amount in at least a decade.

Philanthropists don’t always want to give directly to the government, said Kathryn S. Wylde, president of the Partnership for New York City, a business group that works with some of the city’s most prominent donors. Instead, they give to causes championed by people they trust, like Mr. Bloomberg, one of their own.

“Listen, this government is not run by a billionaire,” Ms. Wylde said. “The Adams administration is starting from scratch in developing their relationship with the philanthropic community.”

Kayla Mamelak, a spokeswoman for the mayor, said in a statement that the city needed “meaningful financial assistance” from the federal government.

“We are exceptionally grateful to our philanthropic partners who have stepped up – not only to the Asylum Seeker Relief Fund, but also to the various nonprofit and charitable organizations we have sent donors to – but the reality is that New Yorkers are not should have done to bear the brunt of this crisis largely alone,” she said, noting that the relief fund listed non-profit organizations where New Yorkers could drop off donated goods.

Not a party for austerity

Donors have given generously in the past year to traditional causes such as private hospitals and cultural institutions, including the recently opened $500 million Perelman Performing Arts Center in Lower Manhattan, which was largely funded by a veritable who’s who of the city’s philanthropistsincluding Mr. Bloomberg, who has contributed $130 million through his charity, Bloomberg Philanthropies.

But lately, even when donors do give to municipal causes, their money doesn’t seem to match the magnitude of local cuts.

The New York Public Library raised $52 million in private donations in the fiscal year that ended in July. The library system, which receives more than half of its revenue from the city, is nevertheless suspending Sunday service at all its branches following the city’s cuts to the library budget, and is preparing to further reduce services if the mayor takes even more implements cuts.

The Robin Hood Foundation, the anti-poverty organization that has long been one of Wall Street’s favorite charities, has focused much of its recent advocacy on the city’s lack of affordable child care, last year providing $3 million in grants to the Mayor’s Office. Fund announced to help families access care. That hasn’t stopped the mayor from cutting hundreds of millions of dollars from the city’s popular preschool program for three-year-olds.

At the same time, some bold names have focused their recent spending on supporting Israel amid the war with Hamas.

Mr. Bloomberg, who remains New York’s most influential philanthropist, recently donated nearly half of an $88 million contribution to Israel’s Emergency Medical Service.

The UJA Federation of New York, a Jewish charity, raised $45 million from local funders at its recent annual gala, called the Wall Street Dinner, and another $75 million from “the Wall Street community” to support the federation’s relief fund for Israel. Michael Cayre, a real estate developer and owner of Casa Cipriani, helped organize a gala at the members-only club. reportedly increased approximately $10 million for the victims of the October 7 Hamas attacks. Mr. Adams was among those present.

Wall Street’s favorite local target

It all adds up to a big change from the past two decades, when the city’s philanthropic engine — Wall Street — championed local charter schools.

To some, the key to addressing struggling public schools, and even entrenched poverty, seemed pretty simple: Create as many charters as quickly as possible, which tend to show high standardized test scores, and then enroll as many children that charters would become a standard. legitimate counterbalance to traditional public schools. Charter schools, which are typically non-union, are overwhelmingly attended by black and Latino children.

Galas and fundraisers for charters organized in one of the luxurious Cipriani restaurants or in lavish private homes quickly became an important event in the city’s social circuit; The school boards were filled with financial and business leaders.

Well-known hedge fund managers, including Steven A. Cohen, who now owns the New York Mets, wrote $1 million checks to a pro-charter school PAC boosting Republican candidates as part of an effort to sway teachers’ influence to counteract. union.

But a Democratic political backlash against charters soon spread throughout the state, and the Legislature ultimately limited the industry’s ability to open new schools, dramatically limiting the most ambitious goals for charters.

Charter donors also grew increasingly frustrated as they found protesters — some of whom had ties to union-backed groups — demonstrating outside their homes in Manhattan and the Hamptons.

However, a few billionaires have continued to donate lavishly to a small group of charters. Hedge fund manager Kenneth Griffin donated $25 million last year to Success Academy, the city’s largest charter network. Mr. Bloomberg recently gave Success $100 million and another well-known charter, Harlem Children’s Zone Promise Academy, another $100 million through his charity.

Meanwhile, one of the few recent high-profile philanthropic efforts aimed at district schools has fizzled.

In 2019, cosmetics billionaire Ronald S. Lauder and former Citigroup chairman Richard D. Parsons announced a multimillion-dollar campaign that helped block an effort to abolish the entrance exam for elite specialized high schools of the city, which enroll small numbers of black people. and Latino students who make up the majority of the school system.

The businessmen funded tutoring for black and Latino students to prepare for the tests. The enrollment statistics did not budge. Mr. Lauder, who has long been one of the city’s most influential donors, quietly disbursed the last of his money in 2021.

He recently shifted his focus outside New York. He has threatened to withhold funding from the University of Pennsylvania, his alma mater, over its response to the war between Israel and Hamas.