The Business of Doing Good Works

George Soros, one of the richest men on the planet, has given more than $8 billion to charities in Baltimore and around the world. Last week, he made headlines with one of his biggest gifts ever—$100 million to Human Rights Watch.

The billionaire investor and philanthropist is known for supporting liberal causes, and the Human Rights Watch donation is aimed at expanding the advocacy group’s geographic reach and donor base.

In Baltimore, Soros also is known for opening an Open Society Institute office more than a decade ago to study the causes of persistent poverty and invest in solutions. Soros has funded more than $60 million in programs in the city to address what he views as three intertwined problems: untreated drug addiction, an overreliance on incarceration and obstacles facing young people.

Soros’s life has charted an incredible arc, from surviving the Nazi occupation of his native Hungary to running his own hedge fund, the Quantum Fund. Now 80 years old, Soros says he plans to accelerate his charitable donations.

Meanwhile, as part of stepped-up fundraising efforts, the Open Society Institute in Baltimore announced on Friday three new board members: Eddie C. Brown, a Baltimore money manager; Edward C. Bernard, vice chairman of T. Rowe Price Group Inc.; and Taylor Branch, a Pulitzer Prize-winning author.

In an email exchange with the Baltimore Sun, Soros discussed his philanthropy and commitment to Baltimore. He also declined to answer a few questions, about the state of the economy and President Barack Obama’s performance. (He has been an outspoken critic of former President George W. Bush.)

Question: Why did you choose Human Rights Watch for the $100 million pledge, and what do you hope the group will accomplish? Where do you think human rights efforts should be focused now?

Answer: First, human rights is an important cause, to which I am wholeheartedly committed. Second, Human Rights Watch is an effective organization that has had great success.

I’m afraid, however, that the United States lost the moral high ground under the Bush administration. At the same time, the principles that Human Rights Watch promotes have not lost their universal applicability. Human rights underpin our greatest aspirations; they’re at the heart of open societies.

To be even more effective, Human Rights Watch has to be seen as less of an American organization. I think it can have even greater impact by being genuinely international in scope...

In five years’ time, Human Rights Watch aims to have as much as half its income and a majority of its board members come from outside the United States. I hope my gift will help Human Rights Watch reach the important goal of raising more money from countries like Brazil, Mexico, India and China.

Q: You have said the Human Rights Watch gift is the first in a series of larger gifts. Can you elaborate on your plans?

A: Now that I am 80, I’ve decided that it is time to begin to endow the organizations that I really believe in so that they can continue to have an impact in the decades to come.

At first I wanted to distribute all of the money during my lifetime, but I have abandoned that plan. I have concluded that my foundation should continue, but I still would like to do a lot of giving during my lifetime. Doing it this way, with such size, is a step in that direction.

Q: What do you think of the recent push by Warren Buffett and Bill Gates to persuade the world’s billionaires to donate at least half of their wealth to charity? Do you plan to join them?

A: I am delighted that they are working to convince the world’s wealthiest individuals to donate to charity. I hope their efforts succeed and the donated funds are used to make the world a better place. I don’t need to join this particular initiative because I already give away half my income and plan to leave my estate to my foundation.

Q: After 13 years of philanthropic work in Baltimore, do you think the Open Society Institute has made a difference in the city?

A: Yes, when I first visited Baltimore 13 years ago, I saw it as a sinking city. Now it is on the rise. We are making some progress because we are tackling the root causes of the big problems facing Baltimore and other cities. My foundation is working closely with city leaders and advocates, all of whom are committed to improving the plight of underserved communities in the city. We strongly support school reform and helped to open 10 new schools.

Maryland is one of the few states where the prison population is being lowered gradually. This may have been accomplished in part by giving people the drug treatment they need instead of being incarcerated for long periods of time. There is much greater access to drug addiction treatment for those who most need it and, thanks to my foundation’s leadership, there are new ways to treat addiction available such as buprenorphine.

I’ve also been very pleased that the Baltimore Community Fellowship program, which was my own idea, has really met with success. More than 100 people have received fellowships, people who can show tangible results for their work in Baltimore.

Q: Do you plan to make a long-term commitment to Baltimore? What more needs to be done?

A: I have committed to continue to invest in OSI-Baltimore in the future because I’ve been impressed by its leadership and efforts to diversify its funding. Going forward I have pledged to match contributions on a 1-to-1 basis. I continue to believe that the only way to get make change in Baltimore is to have local leaders invest in this work. Over 225 have invested, which is a significant number.

My foundation is addressing the right issues, but the only way it can continue to show results is if local leaders and corporations invest in this work. I know that the economic crisis makes it a difficult time to fundraise, but Maryland is a wealthy state and there are many people who could get involved to help shape Baltimore’s future. Now is the time to give.

Q: Are donors stepping up to continue your group’s work in Baltimore?

A: Yes and no. On the one hand, as I mentioned, over 225 have invested in this important work, contributing over $14.5 million... But ultimately the organization’s impact and sustainability will depend on many more donors getting involved.

Q: Can you describe the personal philosophy that has guided business and investment decisions?

A: In the late 1950s I began reading the works of the political philosopher Karl Popper, while also studying economic theory at the London School of Economics. I was struck by the contradiction between Popper’s emphasis on imperfect understanding and the theory of perfect competition in economics which postulated perfect knowledge. This led me to start questioning the assumptions of economic theory.

The core ideas of my philosophy are two relatively simple propositions. One is that in situations that have thinking participants, the participants’ view of the world is always partial and distorted. That is the principle of fallibility. The other is that these distorted views can influence the situation to which they relate because false views lead to inappropriate actions. That is the principle of reflexivity. For instance, treating drug addicts as criminals creates criminal behavior.