Little-known Pew Charities Let Light In Professionals Steer Family Foundation

Posted: February 24, 1987

Unlike the Ford Foundation or the J. Paul Getty Trust, the Pew Charitable Trusts are largely unknown entities, even in Philadelphia, where they gave away $39 million last year.

Not one building in the city bears the name of the Pew family, descendants of the founder of Sun Oil Co.

Yet there are rumblings, albeit sedate rumblings, of change of leadership and style in the Rittenhouse Square offices of the seven Pew trusts, whose combined assets total $2.39 billion, comprising the third largest private foundation in America.

The board of directors recently named a new president, Thomas W. Langfitt, a neurosurgeon who was vice president for health affairs for the University of Pennsylvania. Langfitt has been the acting president since August, when former president Robert I. Smith was forced to resign in an unusually unceremonious display of turmoil in one of the world's largest philanthropic spending machines.

There have been other changes as well.

Since the Pew trusts were incorporated in 1948, they have been administered by the Glenmede Trust Co., where privacy has been a trademark, if not a phobia. For decades, the trusts operated under a tradition of conservative philanthropy, quietly granting millions and taking few bows.

As a result, the inner workings of the trusts have been an enigma, forcing even those who depend on their grants to engage in a sort of Kremlinology to understand how they decide who gets money.

It is an enigma with a profound impact, particularly on Philadelphia, where grants totaling tens of millions of dollars have been made to nearly every hospital, university and cultural institution in town, from the Philadelphia Orchestra to the South Street Dance Company.

Now, the trusts would like people to know what they're up to. "We want to tell our story," said Langfitt in an interview last week.

The trusts have also undergone a major reorganization in an attempt to establish an identity for the Pew trusts separate from that of the Glenmede Trust Co. The trust company is a commercial investment bank that manages the trusts' assets and handles financial affairs for 600 other clients, all of whom have assets of $1 million or more.

Until now, there has been great confusion about the names and the relationship of the two. The trusts are an unincorporated division of Glenmede, and they have separate finances and separate staffs.

"It's been pretty chaotic," said Langfitt. "Here in Philadelphia, the name Glenmede has been the prominent name. But if you travel throughout the country, our grantees would not know the existence of the Glenmede Trust, while they know the name Pew very well."

Langfitt is president of both Glenmede and the Pew trusts, juggling two mammoth jobs - managing a major charitable foundation while heading a major investment bank in a volatile stock market amid wildly fluctuating interest rates.

Langfitt takes over at a time when Glenmede and the Pew trusts have been in some disarray. Although the reasons leading up to Smith's swift departure have been closely guarded, his retirement came immediately after the board of directors received a study critical of Smith's management by Edward H. Bowman, a professor of corporate management at the Wharton School.

In announcing Langfitt's appointment, the board also consolidated commercial divisions of the bank and named Fred W."Bud" Billups Jr., formerly in charge of grant-making, to the newly created position of executive

director of the trusts to oversee day-to-day operations.

Glenmede, the commercial, profit-making division, will remain in second- floor offices overlooking Rittenhouse Square, at 229 S. 18th St. The Pew trusts will move to the Pennwalt Building, 17th Street and the Parkway.

Langfitt, 59, a tall man with gray, wavy hair and a stern demeanor, has sat on the Pew board since 1980. A graduate of Princeton University and the Johns Hopkins University Medical School, he has spent almost his entire career at the University of Pennsylvania Medical School, first as a highly regarded neurosurgeon, then as chairman of the department of neurosurgery and chief of Penn's well-known head injury and trauma research project.

There, he was the target of protests by animal-rights activists about the injuring of baboons for research. He was formally reprimanded by the university in 1985 for violating animal-health guidelines.

In 1974, Langfitt became vice president for health affairs at the university while still working as a neurosurgeon and pursuing research, a triple workload that amazed those around him.

"I found it very interesting to watch," recalled William J. Hickey, vice president for administrative affairs at Osteopathic Medical Center of Philadelphia, who was Langfitt's assistant for eight years.

"He was appointed acting vice president and, from day one, behaved as if he spent his career in administration. I found it astounding, as he never had any formal training in administration," said Hickey.

Michael P. Morgan, director of development for the Philadelphia Orchestra and former development officer for medical affairs at Penn, described Langfitt as having "a truly eclectic mind. He is not totally medically oriented, but has a wide-ranging grasp of social issues. In some ways, he is quite visionary."

Langfitt plans to give up his neurosurgical practice next month, after 30 years. "My interest in neurosurgery and medicine are undiminished," he said. ''But I feel there is more of a challenge at Glenmede."

Langfitt takes over after a decade in which the Pew trusts have experienced great and rapid changes. They have become less the domain of conservative and parochial family interests and more the province of foundation professionals who understand their opportunity to function at the cutting edge of social engineering, having wide impact on cultural, education and scientific development.

The changes are described by Waldemar A. Nielsen in his 1985 book, The Golden Donors: A New Anatomy of the Great Foundations. Nielsen traced the history of the Pews and their philanthropic foundation.

Nielsen described the origin of the family wealth as the 1859 oil strike in Titusville, Pa., 40 miles west of the farm of John Pew, a fundamentalist Presbyterian. The oil-and-gas boom enabled John Pew's son, Joseph Newton Pew, to become a millionaire and found the Sun Oil Co. When he died in 1912, a son, J. Howard, became the president, at the age of 30. He held the office for 35 years and saw the company grow from 300 employees to 27,000 by the time he died in 1971.

A brilliant business strategist, J. Howard Pew constructed the Sun Shipbuilding & Dry Dock Co. in Chester in anticipation of World War I and, after making millions, stayed away from the stock market, and resultant crash, in the 1920s.

Again with uncanny timing, Pew sold off the company's European investments just before World War II.

Pew was a stiff-necked conservative and rock-hard capitalist, causing one U.S. senator to remark, "He not only talks like an affidavit, he looks like one." He and his wife, Helen, led plain lives, once breaking their no- alcohol rule to serve 10 bottles of French wine to a reception of 900 guests at the 1936 wedding of one of their adopted children.

Howard's younger brother, Joseph Newton Pew Jr. dabbled in politics and was as inept as his brother was crafty, once spending $2 million in a bungled effort to stop Wendell Willkie from obtaining the Republican presidential nomination.

Once a supporter of Franklin D. Roosevelt, the younger Pew turned against him and became the nation's leading Roosevelt-hater. He was quoted as being opposed to "communism, fascism, planned and dictated economies, government paternalism and all the other isms."

The Pews' religious convictions led them to give generously to good works. In 1948, the four surviving children of Joseph N. Pew, founder of the fortune, incorporated the Pew Memorial Trust.

A practical motive also led to the creation of the Pew trusts: At the time, most of the family wealth was invested in Sun Oil stock. By donating most of the stock to their own charitable foundations, the Pews minimized inheritance taxes and retained family control over their stock and the company.

The brothers and sisters also set up their own smaller trusts to carry out their personal concerns, to which they left virtually all of their wealth when they died in the 1960s and 1970s. There are 11 trusts in all, including the Mabel Pew Myrin Trust, the J. N. Pew Jr. Trust, the Knollbrook Trust and the J. Howard Pew Fund for Presbyterian Uses.

Seven of the trusts are consolidated under the title of the Pew Charitable Trusts. The others have specific charters with less discretion in awarding grants.

The Pew Memorial - largest of the trusts, with $1.5 billion in assets - has a broad and simple charter to help meet human needs through charity. The J. Howard Pew Freedom Trust - second largest, with $331 million - is more restrictive, reflecting its namesake's strong beliefs in fundamental Christian religion and free enterprise. He specifically charged that his gift be "used to acquaint the American people with the evils of bureaucracy and the vital need to maintain and preserve a limited form of government in the United States. . . . "

Under the leadership of Robert I. Smith, who became head of the trusts in 1977, grants to conservative policy-oriented organizations were diminished, and by 1980 had all but disappeared.

Smith also overhauled the grant-making policies, bringing in advisory panels of scholars and experts in each of the fields funded by the foundation.

In 1980, for instance, the Pew trusts convened an advisory committee on health and medicine to recommend how to best spend the foundations' millions on health care. Overnight, the Pews cut off any grants to renovate or build new hospital wings or disease-specific research and concentrated their money on training, policy research and health-services delivery.

Now, the Pew trusts have joined other great foundations in making an attempt at creative funding. One-third of their grants are now "trust- initiated." Instead of only reacting to requests by institutions, the foundation now conceives its own programs.

In response to the loss of hundreds of trees throughout Phildelphia, the trusts hatched a "Greening of Philadelphia" project, granting $3.6 million to replant and restore sections of Fairmount Park and expand neighborhood gardens. The Pews gave $5.7 million to a project to provide health care for the homeless in Philadelphia and elsewhere. In an effort to raise the quality of regional theater, the trusts invited local theaters to submit creative ideas.

Another example, and a favorite of Langfitt, was the creation two years ago of the Pew Scholars in Biomedical Sciences. Each year, 20 biomedical students are selected to receive $200,000 over four years to further their research and careers in fields such as immunology.

"An important part of the concept is that we are creating a community of scholars," Langfitt said. "We bring them together, and from there, they can move forward in a wave into their position of leadership in biomedicine."

The trust has also developed the International Health Policy Program to fund health policy groups in Asia and Africa to study how best to spend their limited resources. Recommendations will be used by the World Health Organization and World Bank.

"Our health policy will drive World Bank loans. Now that's leverage," said Langfitt.

He predicted few changes in the way the Pew trusts spend their money, saying that he foresaw no changes in the mix between trust-initiated and institution-initiated grants.

Although the trusts have become more national in focus, Langfitt said that Philadelphia-area projects would continue to receive the favor they have in the past. Last year, $39 million out of $139 million in Pew grants went to local projects and institutions.

But the real challenge for Langfitt was described by Nielsen, the foundation's sole and unofficial biographer. With the Pew family becoming less cohesive and involved, Nielsen wondered whether the foundation would have ''the motivation to go beyond respectability to distinction."

"If so, then, as in the case of the Ford Foundation, which has no base of family support or significant tradition behind it, the Pew philanthropies will have to depend essentially on the quality of their hired manager to raise their level if it is ever to be raised further."

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