In 2008 and 2009, after the country’s massive financial crisis had taken down big banks and liquidated corporate savings accounts, New York City institutions took a knocking. But it wasn’t just the Metropolitan Museum of Arts or the Carnegie Halls that suffered from a sudden deficit of support: especially hard hit were local, community-centric organizations with low budgets that rely on grants and other smaller types of funding to accomplish their missions. Lifetime New Yorker Andrew Gundlach ’01 wanted to do something about it.
“I said to myself, ‘There’s got to be a couple of institutions around New York that have lost funding, say $20,000 or $50,000, where it would mean so much to them to have that funding replaced for a couple of years so that they can get back on their feet and live through this financial crisis — live for another day, basically,’” Gundlach says.
Gundlach — who is a director of investment firm First Eagle Holdings, the parent company of First Eagle Funds, and spearheads the firm’s decades-long relationship with the School, and who has taught a number of highly regarded value investing seminars over the years at the Heilbrunn Center for Graham and Dodd Investing, where he sits on the board — related his idea to Professor Ray Horton. Horton founded the social enterprise program that eventually became the Tamer Center for Social Enterprise at the School. “I said to Ray, ‘Wouldn’t it be great if we could just empower the students to go out and find these places?’” Gundlach says.
The two quickly realized that the task of researching and vetting local charities in New York City — a huge undertaking — would provide an incredible learning opportunity for students interested in philanthropy. “I thought the students could do work on what institutions were really worthwhile and thereby learn a lot,” Gundlach says.
Horton added: “I thought that Andrew’s deep and multigenerational connections into many of the philanthropic organizations of this city would help those organizations feel comfortable opening their books to the students, especially as it could one day lead to follow-up interest and funding from the entire Columbia alumni network: graduates who are thinking about philanthropy very much like Andrew.”
“I said to myself, ‘There’s got to be a couple of institutions around New York that have lost funding, say $20,000 or $50,000, where it would mean so much to them to have that funding replaced.’”
—Andrew Gundlach ’01
Gundlach and Horton took that spark of an idea to Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors, Inc., and Douglas Bauer, executive director of the Clark Foundation, who had been co-teaching a class on philanthropy at the School. Using as a guideline the structure of the successful Applied Value Investing seminars taught by Gundlach, William von Mueffling, and others — a structure pioneered by some of Gundlach’s favorite Columbia Business School teachers, including Bruce Greenwald and John Griffin — the four refined the idea further into a new course, one that actually gives students first-hand experience at giving away dollars while also focusing on bettering the local community.
In Effective Philanthropy in Urban Communities, students are broken into five different teams. Each team is charged with finding, researching, selecting, and ultimately awarding $25,000 worth of funding to a New York City–based charity. An emphasis is placed on small to midsize organizations, and the total $125,000 of funding is provided by Gundlach’s family’s foundation, the Anna-Maria and Stephen Kellen Foundation.
Each team selects a critical issue to focus on — such as poverty, criminal justice, or homelessness — and whittles down its list of possible beneficiaries to just one by thoroughly vetting each organization, both on paper (by scouring financials and quarterly reports) and with in-person visits (to interview executives and staff). This final selection is presented to the class, which then votes on an ultimate winner that will receive an additional $25,000, also from the Anna-Maria and Stephen Kellen Foundation. (Teams are not permitted to vote for their own submissions.) Michael Kellen, parent of Christopher Kellen ’12 and Gundlach’s uncle, who is a director of First Eagle Holdings and president of the Anna-Maria and Stephen Kellen Foundation, has the opportunity to review and approve the funding. If approved, the funds are then donated to Rockefeller Philanthropy Advisors, which acts as distribution agent. To date, all student selections have been approved.
It was important to Gundlach that the charities be New York–centric to promote an understanding and appreciation of the greater community in which Columbia Business School students live and learn. “If you look at Columbia and its history with New York City, it has had a very mixed relationship with its community,” Gundlach says. “Ray and I thought it was important to have this type of philanthropy coming out of the Business School, especially at a time [post-2008] when you had business and business ethics being put into question.”
Effective Philanthropy in Urban Communities debuted three years ago, and the response thus far has been tremendous. “I felt like I made a difference in at least one person’s life, and if that’s the case, then this class was a resounding success,” says Cam Henry ’16, whose team awarded its allotted $25,000 to Neighborhood Defender Service of Harlem (NDS), which provides high-quality legal representation to residents of upper Manhattan.
“We feel good about the fact that we’re able to contribute in some small way to ... the hope of a positive outcome.”
—Cam Henry ’16
Henry says his team focused on the justice issue because “we realized that there are institutional issues that we would hope to address.” In their industry research, for example, the team discovered that New York is one of only two states in the country that tries juveniles as adults. “You’ve got a lot of 15- and 16-year-olds who are going to spend time on Rikers Island in the mass population, getting abused. The statistics are horrifying,” Henry says.
At the same time, his team analyzed data showing that previous incarceration led to high rates of recidivism, more so than unemployment or other factors. “If you’ve been in jail, you have a higher likelihood of going back. We [wanted] to intervene at the moment that a child’s life meets the justice system,” he says.
His team landed on NDS because it is incredibly well known within its community and has strong grassroots support. “If there’s a street fair, for example, they’ll set up their own stall and hand out flyers,” Henry says. “That opportunity to intervene on day one — we thought that gave [kids] the best chance to stay out of the prison system. We feel good about the fact that we’re able to contribute in some small way to a more positive experience with the hope of a positive outcome.”
Based on the case that Henry and his team made to the class — in which they stressed the importance of tackling the juvenile justice issue at the root cause, rather than simply treating the symptoms — Henry and his team won the additional $25,000 to give to NDS as well.
“A lot of students talk about the opportunity to make an impact while they’re on campus, and I don’t think that there’s a much better way of making an impact than being able to give somebody $25,000,” Henry says.
“It’s one of those ideal opportunities where you get to bridge theory with practice,” says adjunct professor Doug Bauer. “What makes it really special is that you walk into this class and know that you're going to have the responsibility of being the stewards of real dollars going to a real nonprofit. The thing that I've always been impressed with is that the students take that responsibility and that stewardship very seriously.”
“I think all of us felt that we had to do the best job we could,” Henry agrees.
The course also provides students with an understanding of nonprofit work from a business perspective, teaching them “how to think about measuring nonprofit institutions not only in terms of their missions, but in terms of their ability to execute on the missions, and how to invest nonprofit dollars wisely,” Gundlach says. Effective Philanthropy in Urban Communities also exposes students to organizations and neighborhoods they might not otherwise know about, providing additional hands-on opportunities to learn about critical issues.
“Being in New York City is an important component of going to Columbia Business School,” Bauer explains. “This class allows students to go into parts of New York that wouldn't necessarily be on the students’ radar. You’re going to be going out to Bushwick, you’re going to be going out to East New York, you’re going to be going up in to Mott Haven or Hunts Point. These are some of the most impoverished neighborhoods in the five boroughs. You go there and you start to really understand: what does it take to try to make a difference in human services, in education, in the environmental question? That's what I think makes the course unique.”
Of course, the institutions themselves benefit from the extra dollars, but the course creators hope that they also benefit from the students’ inquiries and due diligence, which ideally encourage the organizations to take a hard look at where they are spending money and why. “I hope they’re made better by tapping into the talent pool that's Columbia,” Gundlach says.
Going forward, the School hopes to draw more attention to the course and to the local charities that the students unearth, says Sandra Navalli ’03, senior director of the Tamer Center for Social Enterprise. “I think people might be interested to hear about these organizations,” she says.
“It’s one of those ideal opportunities where you get to bridge theory with practice.” —Doug Bauer
In fact, the topic of philanthropy has become so popular that, this spring, the School introduced a new course on global philanthropy, which is taught by Berman. Bauer has taken over teaching Effective Philanthropy in Urban Communities.
“I see myself as a venture capitalist who brought a good idea and some funding to great people who proved it can work,” Gundlach says of Effective Philanthropy’s success. “Now, the challenge is for Columbia Business School and the Tamer Center to prove it can work on a bigger scale, to get five others like me who want to fund similar courses. The multiplier effect can be quite big, both for the students’ learning experiences and for the impact the School can have on its host city.”
Since Columbia’s graduates succeed around the world, the impact of such courses is also felt on a global level.
“These students going to Columbia Business School — I have an expectation that they're going to be leaders in some shape or form,” Bauer says. “My hope is that this class gives them exposure to something that hopefully will be an important component of their lives — that when they're out there doing whatever they're doing post Columbia Business School, this kind of work will become a [part] of who they are and what they are, and that they'll invest time, energy, and if they have it, money, in doing terrific work in whatever community they're living in.”