Wealthy donors pull back from NYC’s escalating problems
NEW YORK — At first glance, this might seem like just the right moment for New York City’s deep-pocketed philanthropists to flex some muscle.
To hear Mayor Eric Adams tell it, the city is teetering on the edge of fiscal calamity, prompted largely by the costs of sheltering and feeding soaring numbers of migrants coming into the city. He has asked New York’s millionaires and billionaires to step in and help fill some of the budget holes that have prompted major cuts to schools, libraries, parks and 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 giving are confronting the limits of how much 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, is newly wary of giving to causes aimed at addressing the city’s biggest problems, according to conversations with more than 20 donors, philanthropic advisers and fundraisers. In some cases, donors are choosing instead 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 — cannot be easily fixed, 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 boldest aspirations for improving education have not materialized. And some philanthropists who supported the city during the height of the coronavirus pandemic are now turning their focus to the presidential race and the Israel-Hamas war.
At the same time, donors, few of whom have strong connections to Mr. Adams and his inner circle, have noted the escalating questions about City Hall’s ability to manage the city’s many problems.
‘No hopeful message’
A recent fundraising campaign to support asylumseekers offered 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 partners with donors, brought in less than $3 million in cash, alongside the equivalent of $2.7 million in in-kind donations, most of which was raised from philanthropic organizations rather than individual donors. Mr. Adams has said that providing services for migrants could cost the city as much as $12 billion over the next few years, unless the federal government intervenes.
There is a precedent for New York’s wealthiest to help ease migrants into the city. When waves of European immigrants started arriving in New York in the late 1800s, the city’s philanthropists banded together to create settlement houses, which provided social services and offered insights for the local government about how best to handle migrants. Many of these organizations are still influential in city life.
But today, “there’s no hopeful message here that people want to invest in,” said Grace Bonilla, who runs the charity United Way of New York City.
“It’s a hard conversation to have with donors when your mayor is saying, not only do we not have good solutions for a problem that should be solved by the federal government, and I agree with that, but we’re also cutting the budget,” she said.
Ms. Bonilla said there was a feeling of “giving exhaustion” still lingering from the pandemic, when 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 handsomely to public emergency 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 outsize role of private money in city politics.
The Mayor’s Fund raised over $77 million during the fiscal year that included the first half of 2020, its biggest haul since the last year of former Mayor Michael Bloomberg’s tenure. The fund raised just under $10 million, including some of the donations to the campaign to support migrants, during the first full fiscal year of Mr. Adams’ mayoralty, which was the lowest amount in at least a decade.
No match for cuts
Donors have given generously over the past year to traditional causes like private hospitals and cultural institutions, including the newly opened, $500 million Perelman Performing Arts Center in lower Manhattan, which was funded largely by a veritable who’s who of the city’s philanthropists, including Mr. Bloomberg, who contributed $130 million through his charity, Bloomberg Philanthropies.
But lately, even when donors do give to municipal causes, their money seems to be no match for the extent of the local budget cuts.
The New York Public Library raised $52 million in private donations during the fiscal year that ended in July. The library system, which receives more than half of its revenue from the city, is nonetheless suspending Sunday service at all of its branches following the city’s cuts to its library budget, and is preparing to further reduce service if the mayor enacts more cuts.
The Robin Hood Foundation, the anti-poverty group that has long been one of Wall Street’s preferred charities, has focused much of its recent advocacy on the city’s lack of affordable child care and announced $3 million in grants to the Mayor’s Fund last year to help families access care. That has not prevented the mayor from cutting hundreds of millions of dollars from the city’s popular prekindergarten program for 3-year-olds.
At the same time, some boldfaced names have focused their recent spending on supporting Israel amid its war with Hamas.
Mr. Bloomberg, who remains New York’s most influential philanthropist, recently put up 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 financiers at its recent annual gala, called the Wall Street Dinner, and another $75 million from “the Wall Street community” to support the federation’s emergency fund for Israel.