Even if you don't earn a lot, it is vital to give charity. Your charity choice can make all the difference to someone less fortunatef than you.
Philanthropy should be an important part of our financial planning.
Lewis Cullman, one of America’s top philanthropists and the author of Can’t Take It With you – The Art of Making and Giving Money, was interviewed on the Goldstein on Gelt radio show. Mr. Cullman is a very successful businessman whose philanthropy ideas have benefited many and who has turned charity choice into an art.
Below is a transcript of Mr. Cullman’s interview with Douglas Goldstein, host of the Goldstein on Gelt show. To watch a video of the interview, scroll further down the page.
Douglas Goldstein: I’d like to start today with the title of your book, The Art of Making and Giving Money. As you talk about making money at first, Mr. Cullman, maybe you could first tell us how you made it and then we’ll get to how you gave it away.
Lewis Cullman: Well, I’ve been identified as the first leveraged buyout. Actually, at that time, it was called a “boot strap.” That was before the term “leveraged” was even involved, and we managed to put up a thousand dollars and buy a company for $62.4 million. I think that’s leverage. I don’t think it’s even been done like that since. We bought Orkin Exterminating Company, which is a pest control company and we owned it for maybe 15 seconds. It ended up in the hands of announced broadcasting. That’s how we started, and then after that my wife said, “What are you going to do for an anchor?” So I went out and get another one, a much smaller one, and then we bought a company called Keith Clark, which was a calendar company here. It started in Hudson Street, New York but moved up to Sydney, New York, which is halfway between Binghamton and Oneonta. We built that business up by buying up every little mom & pop company we could find, and ended up buying At-A-Glance, which was for the Textron, and we changed our name to At-A-Glance. Then in 1999, we sold that business for 550 million bucks.
Douglas Goldstein: Wow.
Lewis Cullman: And that’s when I decided that my activity is more in giving money away than making. I’ve been quoted as saying that I think it’s more difficult to give money away, and that everyone wants to make it. You don’t have the same incentives and same type of thing you can use in business.
Douglas Goldstein: Interesting. So for most small investors of a thousand bucks, would you suggest that they also try a leveraged buyout?
Lewis Cullman: Well, you can always try. I mean the question is how good a salesman you are. I mean it’s a lot of sales. We came back from Atlanta when we had the first call, came back to New York, and went over and borrowed 40 million bucks and went approved.
Douglas Goldstein: And they gave it to two young men then?
Lewis Cullman: We were pretty young, but I guess we were very convincing.
Douglas Goldstein: Yes, so that turned out to be a good deal in the end.
Lewis Cullman: It’s kind of a good deal and it gave me an opportunity to do – what my mother always said to me. It’s better to give money away when you’re alive than to give it away in your will because what do you care what people say? When you’re dead, you won’t be around to hear it. I’d mentioned that to Warren Buffet one day when he spoke at the library. He was interviewed by Steve Shepherd of Business Week, and Steve said he’s going to give all his money away when he dies because he said before the crash he was getting 17 ¼ percent compound on Berkshire Hathaway. Then when the question truly came, he said “Why don’t you give some money where you know you get some joy out of it? What do you care when they said. When you’re dead, you won’t be around to hear it.”
Douglas Goldstein: But didn’t he end up giving away a lot of money ultimately?
Lewis Cullman: No, he hasn’t given it all. I mean they’ve been very engaged with having this whole deal where billionaires are asked to pledge that they will give a 50% of their net worth away.
Video of Lewis Cullman's interview with Douglas Goldstein on the Goldstein on Gelt Show
Douglas Goldstein: You’ve been quoted to saying you don’t think that’s quite a good deal.
Lewis Cullman: I didn’t say it’s not a good deal. It’s just not enough, that’s all. It’s a very good deal but if you have $30 billion and you give half of it away, you still got 15 and that’s a lot of money.
Douglas Goldstein: You don’t think you’d be suffering at that point, having trouble perhaps finding a good restaurant that you could afford.
Lewis Cullman: The point is that – I mean I feel that he should give a lot more than 50% that’s all. That’s my position, I have done that.
Douglas Goldstein: Absolutely, you have. We’re talking to Lewis Cullman, who really is one of America’s top philanthropists, not only in terms of the amount of money that he’s given but in the philosophy that he has given behind it and he has written the book Can’t Take It With You – The Art of Making and Giving Money. Mr. Cullman, why did you write the book?
Lewis Cullman: I wrote the book because I felt – first of all I’ve been interviewed three times at Columbia Oral History, which made it very easy and I felt that I wanted to take a crack and then recorded it. So I had all this information and the funny thing is that a lot of my friends say, “You’ve got a heck of memory. How do you remember all these details?” I said, “I practice my memory.” But it was fun, I mean the first thought was how I made it and the second thought was all about giving it away. Then I wrote a brochure which was a lot of fun, How to Succeed in Fund Raising by Really Trying. I think you should give money away if you don’t get joy out of it. That was just agonizing.
Douglas Goldstein: There’s a lot of discussion that people have whether you should give away money anonymously or eponymously, with or without your name on it and certainly, there are many buildings that do have your name on it, and I want to thank you because I’ve been in many of them before.
Lewis Cullman: My wife and I did – I decided since my interest was primarily sciences and primarily art. If it’s with charity and it’s my interest, it is Lewis and Dorothy. If it’s related to art it’s Dorothy and Lewis, so the name is reversed.
Douglas Goldstein: I hear it.
Lewis Cullman: It’s just a little thing that I have had some fun doing.
Douglas Goldstein: That sounds smart. You’re married to Dorothy for 46 years now?
Lewis Cullman: That’s right.
Douglas Goldstein: So you’re a good team in terms of both earning and giving it away.
Lewis Cullman: Yes. We shared our interest. I mean she had a lot of very innovative ideas, and probably the one thing that stands out is the Scholars & Writers Program at the New York Public Library, which has become world renowned. I think that is the best you can have when you have people who’ve been there who said at a board meeting that it went on to literary circles and what they heard and how does one get into the common program. Well, that’s an endorsement of you. In my case, we set up a joint program that the American Museum of Natural History and the New York at the time could go on molecular systematic, which is systematic as the classification of plans and animals and the word “molecular” also means using DNA, which is a whole new thing. That changed the whole picture of the first time these major institutions collaborated, and it has made New York into what is probably regarded as the most eminent botanical science institution in the world.
Douglas Goldstein: Fabulous. You’re also very involved in chess.
Lewis Cullman: The chess program came about through someone I had worked with - Maurice Warham - years ago. He was a chess aficionado, and he sent some American chess players to the Soviet Union. This is back at the late 40s and maybe early 50s – late 40s it was. And because they got beaten badly, at the end of the year he was doing his tax return instead of doing his account. He liked to deduct the cost of the trip and the guy said you can’t do that and it may blow his stock. He said “God damn! I did something, my confidence must be away.” So he set up a foundation. That was the genesis of the American Chess Foundation, to which I was invited on the board and all we talked about was tournaments and I said “We do have to raise some money.” And then by chance in 1986, we experimented with the idea of putting chess in some schools. We put one in the Bronx, one in Harlem, and one in Brooklyn. When I heard about that, they said it makes more sense to teach chess, and that’s how we started. We have reached 500,000 kids so far. We still have them in second or third grade, and when that happens, if the school wants this it means that if the principal and the teacher want, then every single kid can takes chess. We don’t care. There is a screening process. We don’t know whether the kids are bright, they don’t know and if they have a parent, the parent doesn’t know. The kids may seem to have no interest. They thought they had no interest in chess, but suddenly they became interested. And then the most wonderful thing that happened is that these kids get good very quickly and they’ll go to the Nationals and they’ll beat a kid say from Dolton. They say, “Gee that rich kid isn’t so great. Let’s just beat the hell out of him in chess.” That’s self-esteem that you can’t recreate anywhere else. I think the problem in this country anyway is that a typical African-American Latino living in a disadvantaged neighborhood has two role models, either a sports figure or athletic figure. Neither one of them are within their reach. So they feel as if they failed. So we give them something else, which is chess. Chess is just one of a number of things you can do. A friend of mine has a so-called studio in a school, which is an odd thing. There’s a classroom for dancing. There are all kinds of things you can do. I just happened to be focused on chess. It’s very economical. You don’t need much equipment.
Douglas Goldstein: And it does not only develop their self-esteem, but also their strategic thinking.
Lewis Cullman: That’s right. Well that’s the whole thing. They have to learn, and we have interesting quotes from our kids who mentioned they get into a difficult situation in life, and they say, “Gee, what would I do on a chess board?” They look back at the strategy of chess and say, “Would I make this move? Would I make that move?” It’s rather gratifying to hear that kind of thing. I’m very proud of all of the things I’ve done. I think I get more kicks out of the fact that we have saved some lives. That’s my attitude. We have also a college program for the ones that really turned out to be bright. We give them mentoring, we take them on college trips, and we get 100% of those kids into college. They have gotten into prestigious colleges including Yale, Princeton, Harvard, MIT, you name it. Our kids have gotten there and they would never, never had that opportunity if they had not gotten into the chess program.
Douglas Goldstein: That’s amazing. We’re talking with Lewis Cullman, who is certainly one of the top philanthropists in the U.S. He is the author of the book Can’t Take It With You and the founder of the Leveraged Buyout, so he’s really moved from making money to giving it away. I’m very sorry to say we’re out of time today. Mr. Cullman, I just want to thank you for all of your wisdom and I hope that we’ll have you back on the show again soon.
Lewis Cullman: Thank you very much. I’m glad to be helpful.
Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special position and needs. Past performance is no guarantee of future returns.