The Billionaire Who Wasn't, by Conor O'Clery

Citywire

Building a fortune is one thing, but seeing it put to good use while you are alive is even more satisfying.

In 1988, Forbes magazine's annual list of America's most wealthy listed Charles F. Feeney as the 23rd richest American alive, with a personal worth of $1.3 billion but in fact, four years earlier Feeney had secretly given away almost his entire fortune to a philanthropic trust. He had retained enough to live on for the rest of his life, but no longer even owned a house or a car. He was, as Irish journalist Conor O'Clery phrases it in this powerful biography, 'the billionaire who wasn't'.

The Billionaire Who Wasn't is two books in one: the remarkable story of duty-free retailing and its leading company, DFS, whose extraordinary growth and profits paralleled the rise of jet travel; and that of Feeney himself, businessman, linguist, and traveller, who took the needs of the world on his shoulders and became a model philanthropist.

Looking for opportunities Charles Feeney was born into an Irish-American family in blue-collar New Jersey in 1931. His father was an insurance underwriter and his mother a nurse who liked to perform secret acts of charity. The family was lucky enough to make ends meet even through the Great Depression.

Charles was a bright boy and had a talent for making money from odd jobs. After graduating from high school he signed up for the U.S. Air Force, first training as a radio operator in Texas before being stationed in Japan.

After the war, Franklin D Roosevelt's G.I. Bill gave Feeney the opportunity to go to university, and he chanced on an article on Cornell University's School of Hotel Management in upstate New York. It sounded interesting and he applied.

The hotel school was a breeding ground for entrepreneurs, and to help pay his way Feeney became a 'sandwich man', selling sandwiches around campus at night when there were no burger joints or other places to eat.

Graduating in 1956, to his mother's dismay he turned down offers to work for major hotel chains in favour of travelling. He sailed to France, and there met an Englishman selling duty-free liquor to American sailors. Feeney caught up with a fellow Cornell graduate, Bob Miller, who was then working at a Ritz hotel in Spain, and the pair set up their own duty-free business.

Their company, Duty-Free Shoppers or DFS, bid for and won the rights to run the first duty-free concessions at Honolulu and Hong Kong airports, followed by airport stores in Toronto, San Francisco, and Los Angeles.

In the late 1960s and early 1970s most companies' stock prices experienced huge falls, but DFS was becoming a cash bonanza to its four partners, Feeney, Miller, Alan Parker, and Tony Pilaro, who by 1977 were receiving combined annual dividends of over $30 million. Feeney pocketed $12 million one year, $18 million the next, and as the 1980s began his annual share of the dividend was over $23 million, all in cash and tax-free.

DFS revenues continued to grow at a rate of 19% through the decade and it became the largest liquor retailer in the world.

Ego-less giving However Feeney became increasingly uncomfortable with his wealth, and continued to fly economy-class and wear a $15 dollar watch. Casually and sometimes shabbily dressed, he was anything but the image of a wealthy businessman, and taught his kids to be self-reliant and unselfish, providing them with their own spending budgets to manage.

Feeney's lawyer and confidant, Harvey Dale, suggested he read Andrew Carnegie's famous essay on wealth and giving and also introduced him to Maimonides, a Jewish philosopher who wrote about tzedakah or giving, the highest level of which aimed to help people achieve self-sufficiency and was carried out anonymously. This sort of ego-less giving had a great effect on Feeney and so he resolved to become an anonymous donor.

Feeney's Atlantic Foundation was unusual for a charitable foundation in comprising not simply a large sum of money but actual ownership of companies and assets. Feeney made sure his wife and family had plenty to live on and kept the houses, but almost his entire fortune, including his 38.75% share in DFS, was transferred irrevocably to the foundation. He personally was left with less than $5 million. Though he would control the foundation's giving mainly for education, health, aging-related issues, and social justice ends he was no longer a rich man.

Emptying the coffers Feeney sold his stake in DFS in 1996 and all $1.62 billion of it was now to be spent by his foundation in his lifetime.

Overall, it has given 2,900 grants amounting to $4 billion. In the US this has included $600 million to Cornell University, $125 million to Stanford University, which Feeney's son attended, but also amounts to smaller institutions that Feeney has noticed needed upgrading and whose students were disadvantaged.

In keeping with the global outlook of its founder, Atlantic's tentacles of generosity spread around the world. Ashamed at what America did to Vietnam in its war there, Feeney's foundation has injected a lot of money into improving healthcare and hospitals in the country, and establishing or restoring libraries, schools and universities.

Atlantic has also given millions for healthcare in Cuba (a challenging task given Feeney is an American citizen), and to Aids-prevention work and several universities in South Africa.

The organisation supports 'civil society' organisations such as Amnesty and Human Rights First, has helped groups opposing the death penalty, and given donations to maintain non-profit public broadcasting. Driven by Feeney's left-of-centre politics (he opposed the Iraq war and George W Bush's election to the US presidency in 2004), the foundation is considered 'progressive'.

Feeney's intention is that Atlantic's coffers will be emptied in his lifetime, and a target has been set for 2016. Given that, as of 2007, its endowment is around $4 billion, this means spending $400 million a year.

Final comments As a business biography alone, O'Clery's book is valuable, showing that huge money can be made from very simple business models. Yet The Billionaire Who Wasn't is also peppered with Feeney's advice to others always to 'think big' (in both business and philanthropy), and in his restless desire to build a great business.

Today, Feeney travels the world constantly seeking out new and better uses for his foundation's money and visiting potential donors instead of making them come to him.

Many grants stem from things Feeney reads about in local newspapers on his travels, as much as formal proposals. He gains satisfaction from observing an eye operation to save someone's sight in a hospital he has funded, or anonymously watching students work in a library he helped establish.

Seamus Heaney, Ireland's Nobel Prize-winning poet, described Feeney as a modern-day St. Francis whose self-renunciation combined with Medici-like largesse has provided opportunities and happiness for millions.

Whereas Bob Miller, his former partner, lives in luxury homes and socialises with European royalty, Feeney stays in bolthole apartments rented by his foundation, takes buses and taxis instead of limousines, and prefers to mix with normal people. His children note that he is generally a happy man, who would probably have been less happy if he had tried to hold on to his pile of money.

In a similar vein:
Andrew Carnegie: The Gospel of Wealth
Joel T Fleishman: The Foundation
Howard Schultz: Put Your Heart Into It
Lynne Twist: The Soul of Money

Conor O'Clery
Born in Belfast, he worked for the Irish Times for 30 years in various reporting and editing roles, including stints as a foreign correspondent in London, Moscow, Washington, Beijing, and New York, and was twice awarded Journalist of the Year in Ireland. He has also written for The New Republic and Newsweek. Other books include Daring Diplomacy: Clinton's Secret Search for Peace in Ireland (1997) and Panic at the Bank: How John Rusnak Lost AIB $700 Million (with Siobahn Creaton, 2002).

Source
Extracted from 50 Prosperity Classics: Attract it, Create it, Manage It, Share It Wisdom from the best books on wealth creation and abundance by Tom Butler-Bowdon, published by Nicholas Brealey Publishing.