Chuck Feeney: The Billionaire Who Is Trying To Go Broke

Chuck Feeney has done more for Ireland than most people.

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Chuck Feeney is called the James Bond of philanthropy . For over 30 years he’s crisscrossed the globe conducting a clandestine operation to give away a $7.5 billion fortune derived from hawking cognac, perfume and cigarettes in his empire of duty-free shops. His foundation, the Atlantic Philanthropies, has funneled $6.2 billion into education, science, health care, aging and civil rights in the U.S., Australia, Vietnam, Bermuda, South Africa and Ireland. Few living people have given away more, and no one at his wealth level has ever given their fortune away so completely during their lifetime. The remaining $1.3 billion will be spent by 2016, and the foundation will be shuttered in 2020. While the business world’s titans obsess over piling up as many riches as possible, Feeney is working double time to die broke.

Feeney embarked on this mission in 1984.

Feeney says “People used to ask me how I got my jollies, and I guess I’m happy when what I’m doing is helping people and unhappy when what I’m doing isn’t helping people.”

What Feeney does is give big money to big problems. He hunts for causes where he can have dramatic impact and goes all-in. “Chuck Feeney is a remarkable role model,” Bill Gates tells FORBES, “and the ultimate example of giving while living.”

For the first 15 years of this mission Feeney obsessively hid the type of donations that other tycoons employ publicists to plaster across newspapers. Many charities had no idea where the piles of money were coming from. Those that did were sworn to secrecy.

Feeney was born on the 23rd of April 1931 and he grew up in an Irish-American neighborhood in the blue-collar town of Elizabeth, N.J., coming of age in the Great Depression. He started by selling tax free booze to sailors and it evolved to Duty Free Shoppers.  By 1964, Duty Free Shoppers had 200 employees in 27 countries.

Feeney as he kept making money, remained obsessively secretive and low key, but in 1988, he was soon found out by Forbes. Feeney was identified as the 31st-richest person in America, worth an estimated $1.3 billion. His secret was out.

But FORBES had made two mistakes: First, the fortune was worth substantially more. And second, it no longer belonged to Feeney.

Only a close inner circle knew of the latter: that Feeney himself was worth at most a few million dollars and didn’t even own a car. Feeney’s team contemplated a secret meeting with Malcolm Forbes to see how they could set the record straight but in the end decided to let the issue go. Feeney would be listed on The Forbes 400 until 1996.

He loved making money but had no need for it once it was made. Feeney was happy with simple things. He had grown up in a humble, hardworking house and watched his parents constantly help others. In an oft-told story, each morning his mother, Madaline, a nurse, would jump in the car and conveniently drive by a disabled neighbor as he walked to the bus just to give him a ride. This tradition of charity was not extended to business rivals. “I’m a competitive type of person whether it’s playing a game of basketball or playing business games,” says Feeney. “I don’t dislike money, but there’s only so much money you can use.”

Feeney’s philanthropic secret ended in 1997, after he (along with Pilaro and Parker) sold their share of DFS to LVMH, and the world learned Feeney’s $1.6 billion cut belonged not to the man but to his foundation. Through the sale he reluctantly gave up his anonymity but in the process gained a better tool for good: a powerful following. Two of the world’s richest men, Bill Gates and Warren Buffett, credit Feeney as a major inspiration for both the $30 billion-strong Bill & Melinda Gates Foundation and the Giving Pledge, which has enlisted more than 90 of the world’s richest to (eventually) grant half their wealth to charity. “Chuck is fond of saying that none of us has all the answers,” says Gates, “but I know that Melinda and I have learned a great deal from him in the time we’ve spent together.”

In many ways Atlantic was the forerunner to the Gates Foundation, practicing high-margin philanthropy: choosing causes that will maximize the impact of each dollar pledged, whether it’s $250,000 for Haiti earthquake relief or $290 million to build a new medical campus for the University of California, San Francisco.

Casual observers categorize Feeney as frugal, but that’s a simplistic diagnosis. On the spending side Feeney obsesses over value, and on the cost side, he loathes waste. Atlantic’s president and CEO, Chris Oechsli, recalls staying in a Vietnam hostel with him on one business trip but adds that Feeney also once sent him back to the U.S. on the Concorde because he understood the need to get him home in time for the holidays. As for Feeney, he flew millions of miles in coach because first class didn’t get him to his destination any faster. He wears a rubber Casio watch because it keeps time like a Rolex. During our train back from Limerick he would curse and shake his head each time we passed one of many abandoned housing developments (ghost estates) left over from the country’s real estate bust. “I’m always the first guy to ask how much is that or what does it cost?” Feeney says about living the high life. “I never tried it because I knew I wouldn’t like it.” Feeney rarely owned a car because they were difficult to park in cities – although he admits briefly owning a used Jaguar when he lived in Hong Kong. No yacht? “I guess the answer to that is I get seasick easy.”

Although he raised his family in multimillion-dollar mansions (his ex-wife and five children later split $140 million of the DFS fortune), today Feeney lives out of three foundation-owned apartments in Dublin, Brisbane and San Francisco, and crashes in his daughter’s apartment while in New York. Atlantic’s Irish operations are housed in a stately town house in the posh district off St. Stephen’s Green–Feeney and wife Helga (his former secretary) live in a small stone mews apartment out back. Even Feeney’s taxes underscore how he thinks: He has aggressively tried to avoid taxes at every stage in his career–from setting up his early business in Lichtenstein, incorporating his holding company in Bermuda and listing it under the name of his then wife Danielle, a French citizen–despite gaining no personal advantage in his later years. Eventually, less taxes meant that he could give away more.

This waste/value mind-set explains how a frenetic penny-pincher is also completely comfortable deploying massive amounts of cash on projects where he sees the chance of a high return. Take his recent $350 million pledge that helped Cornell, along with Technion-Israel Institute of Technology, win the bid to build a $2 billion technology institute on Roosevelt Island. This Silicon Valley East will attract the best engineers and students to the region. Feeney is betting top tech firms and new startups will follow, eventually producing thousands of jobs and billions of revenue for the region. “The visionary gift will pay dividends not just for Cornell but for New York City,” says Mayor Michael Bloomberg. It’s a textbook Atlantic investment, including leverage in the form of $100 million plus land courtesy of New York City taxpayers. Feeney’s only regret is that the opportunity came late for him and he won’t live to see the project completed.

That’s a lesson he wants to teach the new class of philanthropists: Don’t wait to give your money away when you’re old or, even worse, dead. Instead, make substantial donations while you still have the energy, connections and influence to make waves. “People who have money have an obligation,” says Feeney. “I wouldn’t say I’m entitled to tell them what to do with it but to use it wisely.”

Feeney is a man who obsessively guarded his privacy for decades has recently publicly accepted an honorary doctorate of law granted jointly from every university on the island of Ireland–the first time such an award has been given.

Culled from Forbes magazine

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