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My Philanthropy

1.

The formative experience of my life was the German occupation of Hungary in 1944. I was Jewish and not yet fourteen years old. I could have easily perished in the Holocaust or suffered lasting psychological damage had it not been for my father, who understood the dangers and coped with them better than most others. He had gone through a somewhat similar experience in World War I, which prepared him for what happened in World War II.

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George Soros in Hungary, 1946; from his father Tivadar Soros’s memoir Masquerade, which has just been reissued by Arcade

When the Germans occupied Hungary on March 19, 1944, my father knew exactly what to do. He realized that these were abnormal times and people who followed the normal rules were at risk. He arranged false identities not only for his immediate family but also for a larger circle. He charged a fee, sometimes quite an exorbitant one, to those who could afford it, and helped others for free. I had never seen him work so hard before. That was his finest hour. Both his immediate family and most of those whom he advised or helped managed to survive.

Instead of submitting to our fate we resisted an evil force that was much stronger than we were—yet we prevailed. Not only did we survive, but we managed to help others. This left a lasting mark on me, turning a disaster of unthinkable proportions into an exhilarating adventure.1 That gave me an appetite for taking risk, and under my father’s wise guidance I learned how to cope with it—exploring the limits of the possible but not going beyond them. I relish confronting harsh reality, and I am drawn to tackling seemingly insoluble problems.

I occupy an exceptional position. My success in the financial markets has given me a greater degree of independence than most other people. This obliges me to take stands on controversial issues when others cannot, and taking such positions has itself been a source of satisfaction. In short, my philanthropy has made me happy. What more could one ask for? I do not feel, however, that I have any business imposing my choices on others.

I have made it a principle to pursue my self-interest in my business, subject to legal and ethical limitations, and to be guided by the public interest as a public intellectual and philanthropist. If the two are in conflict, the public interest ought to prevail. I do not hesitate to advocate policies that are in conflict with my business interests. I firmly believe that our democracy would function better if more people adopted this principle. And if they care about a well-functioning democracy, they ought to abide by this principle even if others do not. Just a small number of public-spirited figures could make a big difference.

Over thirty years I have contributed more than $8 billion to the worldwide network of Open Society Foundations, which have in turn supported other global and local organizations. Among much else, these foundations and groups have been able to foster free speech and civil society under Communist and other authoritarian regimes; to expose corruption in oil-rich and mineral-rich states; to support democratic resistance in Burma and other repressive countries; and to attempt to remedy poverty and drug addiction, and improve education, in many places, from Haiti to Baltimore.

I am on the whole satisfied, but I have two big concerns. First, what will happen to the Open Society Foundations when the president, Aryeh Neier, and I are no longer around? Second, and more importantly, what more could we still accomplish during my lifetime? When I established the Open Society Foundations, I did not want them to survive me. The fate of other institutions has taught me that they tend to stray very far from the founders’ intentions. But as the Open Society Foundations took on a more substantial form, I changed my mind. I came to realize that terminating the foundations’ network at the time of my death would be an act of excessive selfishness. A number of very capable people are devoting their lives to the work of the Open Society Foundations; I have no right to pull the rug out from under them.

More importantly, we have identified a sphere of activity that needs to be carried on beyond my lifetime and whose execution does not really require either Aryeh’s presence or mine. That niche consists of empowering civil society to hold government accountable. In the United States, there are a number of institutions, such as the American Civil Liberties Union, that are devoted to making sure that the government upholds the rights of all people and adheres to the restrictions on state power established by the Constitution. In most other countries, there are no such institutions, and they are badly needed. In many countries wealthy people are too dependent on the government to be in a position to provide such support, and in developing countries there is not enough wealth. Hence the niche for the Open Society Foundations. I have also identified some other activities, such as providing legal protection for the poor, that fall in the same category of sustaining basic rights. These are worthwhile objectives, and the network of foundations will be able to serve them beyond my lifetime.

What will be missing when I am gone is the entrepreneurial and innovative spirit that has characterized the Open Society Foundations. I have tried to deal with problems as they arose through a process of trial and error. I was able to move fast and take big risks. The governing board that will succeed me will not be able to follow my example; it will be weighed down by fiduciary responsibilities. Some of its members will try to be faithful to the founder’s intentions; others will be risk-averse.

I should like to appoint six to eight vice-presidents who could take charge of discrete portions of the organization and report to an incoming president—that would leave him or her time to formulate strategy and consider new initiatives. But we must avoid a centralized structure at all cost. At present most of the innovative ideas come from within the networks we have sponsored, not from the top. The best people working in the Open Society Foundations take a proprietary interest in their sphere of activities, and I am constantly surprised by how much they accomplish. I don’t want to lose that spirit.

That is the main reason why I have decided to set up a School of Public Policy at the Central European University in Budapest. An institution of learning can keep abreast of developments and identify both problems and solutions as they arise in a way that the board of a foundation cannot. I have great hopes for the School of Public Policy. It has the potential to become the leading institution of its kind. It can combine the practical experience of the foundations’ network, which is engaged in practically all the central issues of our day, with the theoretical knowledge that can be pursued in a university. Currently our practical engagement with these burning issues exceeds our theoretical understanding; in other words, we have more money than ideas. We need to generate more ideas in order to use our money more effectively.

Like most such projects, this one also has a flaw. The best thinking cannot all be found in the same place. Therefore, the school has to go where the ideas are. It has to be a new kind of global institution dealing with global problems. It has to have a critical mass in Budapest, where the CEU is located, but it has to have a global outreach. The combination of theoretical knowledge with practical experience could then offer an excellent introduction to those who wish to enter the field of public policy. To fulfill my hopes, the school would have to institutionalize the entrepreneurial and exploratory spirit that currently imbues the Open Society Foundations. That would involve taking a critical look at our prevailing beliefs and practices.

In each country we start with supporting critical thinking or dissident activity, and we move in quickly when a new government comes to power and has good intentions but lacks the capacity to deliver. This has happened, for example, in several Eastern European countries. And we have been more persistent than official aid agencies, maintaining a presence long after they have moved on. The same is true of issues of global governance: we are not always the first to recognize them, but once we become aware of them, we remain committed to them, be it the Global Fund to Fight AIDS, Tuberculosis and Malaria, drug policy, or measures to deal with climate change.

Our main difficulty has been in keeping our network of national foundations and “legacy” programs from going stale because that requires almost as much effort as starting new ones; yet my bias has been to focus on the cutting edge. That is where I look for relief from the School of Public Policy. It should explore new frontiers; therefore it should be able to keep the continuing programs up to date even in my absence.

I am looking for novel solutions in order to make an untidy structure manageable. For instance, we are experimenting in countries like Thailand and Malaysia with forming local advisory boards without establishing full-fledged foundations. The boards could provide advice on local conditions, and the programs would be carried out by independent grantees or one of our network programs that already exist within or outside those countries. In that way the combination of local and programmatic knowledge would be preserved without maintaining expensive local organizations, which tend to become preoccupied with distributing money to a clientele. If that works, we could convert existing national foundations to the new format; alternatively they could join the network of Open Society organizations, especially if they can raise money from other sources.

Having decided that the Open Society Foundations should survive me, I have done my best to prepare them for my absence. But it would contradict my belief that all human constructs are flawed if I had fully succeeded. Therefore, I bequeath my successors the task of revising any of the arrangements I shall have left behind in the same spirit in which I have made them.

2.

As I see it, mankind’s ability to understand and control the forces of nature greatly exceeds our ability to govern ourselves. Our economy has become global; our governance has not. Our future and, in some respects, our survival depend on our ability to develop the appropriate global governance. This applies to a variety of fields: global warming and nuclear proliferation are the most obvious, but the threats of terrorism and infectious diseases also qualify; so do global financial markets. In the aftermath of the financial crisis of 2008, it is not enough to stabilize and restart the financial markets; we must reinvent a global financial system that has broken down. Having reached this insight, I cannot afford not to address these issues.

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    My father wrote an eminently readable memoir of our adventures in 1944. See Tivadar Soros, Masquerade: Dancing around Death in Nazi-Occupied Hungary (Arcade, 2001; reissued in 2011 as Masquerade: The Incredible True Story of How George Soros’ Father Outsmarted the Gestapo ). It was reviewed in these pages by István Deák, November 15, 2001. 

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