As often happens after such evenings, reality hit in the sobering light of the next morning. “Jeff called me at 7:45 on Monday, and asked, ‘Did we really agree to do all this?’” recalls Brian Cobb, another architect of the plan. “I told him we had; that it might be crazy, but it just might work.”

It worked indeed: The Naples Winter Wine Festival has exceeded its founders’ highest hopes. In its first auction in February 2001, the group raised $2.7 million. The proceeds rose in each of the next three years, reaching $7.67 million at the fourth, in February 2004. Today, the Wine Festival weekend is one of the fastest-growing philanthropic events on the social calendar. Moreover, the organizers have accomplished this feat with virtually no staff and no national organization. The dozen couples who banded together in 2001 to form the Naples Children & Education Foundation have increased their ranks to 32. They serve as foundation trustees, donating their time, talent and treasure to benefit 18 children’s charities in the Naples vicinity. “It’s amazing what a group of type A personalities can get accomplished in a big group like this,” muses founding member J.D. Clinton, chairman and CEO of Insouth Bank and chairman of Summit America, a television holding company. (His wife, Mary Susan, is a documentary filmmaker.)

While these trustees are not professional fund-raisers, many of them are successful entrepreneurs and executives who are applying the lessons of the business world to philanthropy on a large scale. “Among us, we have everything we need to make this happen: organizational leadership, creative leadership and financial leadership,” Clinton says. On the surface, the organizational process looks deceptively casual: trustees get together about once a month, more frequently as the auction date nears, always on a Sunday afternoon and always over bottles of top-flight vintages. But scratch the surface of this social gathering, and one finds a group of hard-nosed, driven executives, accustomed to solving problems, finding ways to get things done and never taking no for an answer. All they are doing now, they argue, is finding a way to put their business skills to work raising money for charities.

Closed Circuit
It is a self-consciously exclusive group. “To become a member, the existing trustees have to like you, and you have to be able to write big checks—not necessarily in that order,” quips Bruce Sherman, CEO of Private Capital Management, an investment advisory firm and a trustee for two years. “Any new trustee is making a commitment of several hundred thousand dollars a year.” Trustees begin with a six-figure donation to the foundation’s $3 million endowment, which ensures that it can continue to fund vital projects if a catastrophe, such as a hurricane or a terrorist attack, forces the auction’s cancellation. “Groups rely on us,” explains founding member Denise Cobb.

Her husband, Brian, calculates that the couple contributes $300,000 to $400,000—not including the value of their time—toward the event each year. “It’s an expensive little club to join,” he admits. On top of the donation to the endowment, trustees must give at least one lot, such as an unusual holiday or a coveted case of wine, to the auction. This year, vacation lots will include a week for the winner and several close friends on a private island in the Caribbean owned by one of the trustees, with catering from a well-known chef and transportation via private jet. Trustees also expect one another to bid on lots, and most walk away winners of at least one. Shirlene Elkins, the chair of the 2004 event, her husband, Bob, and another trustee bid $350,000 for seven 6-liter bottles of Haut-Brion and LaMission Haut-Brion, along with a private tour, tasting and winemaker lunch at the estate in Bordeaux. Another trustee, Louisiana media entrepreneur Tom Galloway, reports, “My cellar is growing rapidly.”

The trustees insist that they are not just a country club that happens to raise money for charity. “It’s not just a bunch of rich people who get together to have a party,” volunteers Sherman. But, at the same time, they admit that many of the features of the organization do reinforce that perception, particularly its implicit exclusivity. The trustees are unapologetic about their choosiness when it comes to expanding their own number or bestowing the privilege of paying to attend the auction itself and bidding on the lots. “The closeness with like-minded people is part of the magic,” Clinton argues. Another difference from conventional nonprofits that the group is quick to emphasize is that men and women are involved equally. “In other organizations, maybe the women’s contribution gets overlooked, but not here,” says trustee Don Ackerman, a venture capitalist.

The three-day event, which culminates in the Sunday auction, is interspersed with gourmet dinners at the trustees’ Naples estates. A different star chef, such as Daniel Boulud of New York’s Daniel, caters each event, which features wines from an elite vintner. Some 15 trustees throw open their homes to no more than three dozen guests each for the dinners, giving the attendees—who will bid at the
auctions— an opportunity to schmooze with the chef and the vintner. “They have to be among the best homes and estates in Naples,” Brian Cobb stipulates. The trustees pay heavily for the privilege of hosting these dinners: A party bill can hit $30,000, before adding the cost of flying in the vintners via private jets and, naturally, the fee for the local high school marching band to meet those jets and their occupants at the airport.

Charitable Expenses It is difficult to gauge exactly what it costs the group to make the venture work. The 2004 auction brought in $7.67 million, of which $5.2 million went to 18 children’s charities in Collier County. However, the cost of organizing the event greatly exceeded that $2.4 million gap, the trustees admit. It does not include the value of the donations or the trustee dinners. Moreover, trustee bidding is what makes the auction itself work. “Trustees contributed a substantial amount of that $7 million,” Bruce Sherman explains. “They are the biggest bidders on many lots—that is what is expected—so it’s our ‘treasure’ that makes this a success from start to finish.”

This type of extravagance has spurred the event’s success, trustees argue. “The main thing that most businesses do better than most charities is execution,” asserts Brian Cobb. In the case of the Naples wine festival and the auction, execution means developing a strategic plan centering on ways to lure big spenders to the event and convince them to bid aggressively, in the same way that trustees would plan a new marketing campaign for their own companies. The first step in that process, says Gargiulo, was “understanding that people like us, the kind of people we needed to attract, can afford to do anything they want to.” From the start, trustees recognized the need to create a unique experience. “People can buy my wines; they can’t necessarily buy a lunch with me at my winery,” Gargiulo adds.

Lush Life
A typical philanthropic gathering too often takes place in a crowded hotel ballroom, where guests are forced to eat mediocre, reheated food and drink the house wine. Drawing on their business acumen and their personal fortunes, the Naples organizers found ways to improve upon this traditional model. The initial lesson: Spend money to make money. This sparked the idea of the vintner dinner, and the agreement among trustees to take on the responsibility of devising exceptional auction lots. They decided to hold the auction itself at the nearby Ritz-Carlton resort, again with gourmet food prepared by the visiting chefs and world-class bottles of wine.

Above all, the trustees worked to convey a sense of exclusivity. They took a lesson from the world of high fashion, wherein denizens are not necessarily lauded for flaunting their new recherché Prada handbag, but rather for proving to their peers that they are one of a handful of VIPs able to buy it without spending a year on a waiting list. To give their event a similar cachet, Naples organizers capped the number of attendees at 500—and charged each of them to attend. This year, couples will pay $5,000 to attend the auction and a vintner dinner; for $12,000, two couples can attend, with a guarantee that both will be seated at the same dinner. “We figured the first year that by applying an entry charge, we’d have $1 million or so to give away right there, even if no one bid on any of the lots,” Brian Cobb says.

TOP VIEW The type A entrepreneurs and business leaders of Naples, Fla., have reinvented grassroots philanthropy at more lofty levels. The Naples Winter Wine Festival, organized and run by this close-knit clique, nets millions of dollars for local charities every February from an exclusive, invitation-only group of enthusiasts, and has become one of the premier events on the philanthropic calendar. Success, however, is forcing these hard-driven trustees to consider how they can maintain the event’s cachet while managing its unprecedented growth.

That was not enough, the trustees quickly realized. They assumed, after all, that the wealthiest are not necessarily the most generous philanthropists. Focused intently on the goal of raising as much money as possible for their charities (see “The Auction’s Beneficiaries,” page 83), they needed a way to ensure that attendees perceive the event as more than just another social occasion, however elite. “We needed to attract the kind of people that not only could, but would, spend a lot of money,” Cobb says. Their answer: Limit attendance only to invited guests.

Natural Selection
More specifically, organizers have devised a complex hierarchy to classify and retain high-end donors. Each year, they send the first round of invitations to high bidders from previous auctions. As an added inducement to return and spend generously again, these individuals are offered their first choice of the vintner dinners they wish to attend. Only after that group has signed up are newcomers considered. This exclusivity strategy, as predicted, has whetted the appetite to gain entry to what has become a premier charitable event of the Florida winter season. Ann Bain, who joined the ranks of the trustees with her husband, private equity giant Bill Bain, two years ago, says friends clamor for invitations. “This year we will have friends from Boston flying down with us, people we know will be bidders because we have seen them at similar events,” she adds.

The trustees—all-too-aware that many CEOs are lambasted by shareholders and the press for overpaying for some acquisition—do their best to foster an environment where what is deemed foolhardy behavior in the business world is rewarded at the auction. Winning bidders are lauded with blasts of rock music and showered with confetti; laggards are urged by auctioneers not to let their peers outshine them. This has worked notably well. In 2004, one bidder paid $190,000 for a lot of 1997 Mondavi Cabernet Sauvignon Reserve signed by members of the Mondavi family, along with dinner with vintner Robert Mondavi and his wife. Another bidder paid $250,000 for a lot that included the right to develop a private label wine.

Because of this combination of cachet and auction fever, the lots fetch sums that bear no resemblance to their market values: Last year a group of Tuscan wines available at retail for about $5,000 sold for $160,000. While the wines on the block are all the best of their type, Ackerman admits, “There is no relationship between what you pay to get it and what you receive. It’s like making a donation to a charity, and getting a door prize in exchange.”

Trustees say they are leveraging human nature—notably, the competitive instinct of wealthy, type A personalities such as themselves. “We’ve all got egos; that’s why we have been good at what we do,” Ackerman says. This competitive spirit animates even the planning stages of the auction, when event organizers push fellow trustees to cough up more and more in the way of auction lots. “It’s a riot; people just get caught up in the spirit and say, ‘Here, take my private jet to fly the winners down to the Kentucky Derby, take my air miles, take whatever you need,’” Denise Cobb says. Couples also compete to excel at their assigned tasks, from organizing transportation to ordering confetti. “There is a lot of peer pressure between the couples; you don’t want to drop the ball and have your spouse annoyed at you,” Brian Cobb adds.
 
Charitable Interpretation
If egos ever threaten to run amok, one simple phrase seems to restore focus: “Remember, it is all about the kids.” 

“That sobers us up and gets us back on track, because we have all seen how much of a difference this money makes to the organizations,” Clinton says. To literally drive home the point to donors that the frenzied bidding on Sunday will be going to worthy causes, attendees are escorted on bus trips to the charities that benefit from the auction’s proceeds. These trips display the stark contrast between the opulence of the trustees’ world and the lives of the children whose parents work for minimum wage in local restaurants and stores. “Naples is two communities, and the kids we serve, well, you’re not going to see them playing on the beach,” Brian Cobb says.

Naples is located in Collier County, which does not set aside local government funding for social services, neither homeless shelters nor day care centers. As wealthy people have flocked to this Gulf Coast community, the population of low-wage workers also has ballooned, driving up the need for community services. One of the beneficiaries of the auction provides those crucial services. Fun Time Early Childhood Academy has operated out of a double-wide trailer for more than four decades. Its condition is so poor that the facility can accommodate only 50 of the 93 children it may accept under its license, says Kim Long, its chief executive. With a countywide waiting list of 2,500 children queuing up for subsidized care, Fun Time had been trying for years to find a way to build a better nursery facility. “But capital funding is very difficult to obtain from the usual foundations,” Long says. Over the past two years, the auction has donated $1.2 million to Fun Time, enabling it to break ground last December on a new building that will triple its capacity. The Naples foundation also helped the academy lease land from the city for 99 years at a rate of $1 per year.

“The impact of this event has been immense,” Long says. There are unexpected benefits, as well. Last year, one wine auction attendee who toured the facility was so impressed by what he saw that two weeks later, a trustee arrived with a personal check for $35,000 to endow a library in Long’s honor. “We have been a United Way beneficiary for 35 years,” Long says, “but it has been these gifts that are transforming the organization completely.”

The Growing Challenge
As the backers of every thriving venture discover, success comes at a cost. The auction’s organizers must now decide how best to manage and build on their event. “I think we all want to make each auction better than the one before, and so far we have done that,” says Scott Lutgert, a Naples real estate developer and chairman of the 2005 event. “But I’m not sure we can continue at this pace forever, without changing the formula.”

None of the trustees wants the foundation to act and feel like the other philanthropic organizations with which they are involved. For example, the Naples foundation claims to be atypical in involving men and women on an equal footing. “When I go to events with Children’s Hospital trustees in Boston, where Bill has been deeply involved, I am there as his spouse,” Ann Bain says. In contrast, she adds, “We are equal partners” in the wine auction. The social element also plays a large part in future development: None of the group wants to expand the ranks of the trustees so much that the group loses its cohesion. “We have all formed very close friendships through this group, and that is vital,” Galloway says.

Scaling the organization has become the thorniest issue. For the first time, the foundation is hiring full-time staff, including an executive director and a professional to oversee the grants process. Trustees admit that theirs is a delicate balancing act. “The day we hire too many people and become institutionalized, we will lose our touch,” Brian Cobb worries. “The passion of the trustees is what keeps this going." But other trustees are more cautious, arguing that the novelty
value of fund-raising may wear off as the challenge of beating the prior year’s track record grows more daunting. At some point, these dissenters say, professional staff will need to share that burden if the organization is to be sustained.

Other philanthropists may turn to the Naples group for tips on how to manage specific aspects of a grass-roots charitable group, but even the most optimistic of the trustees warn that it may be difficult to export the model as a whole. Part of their success, they claim, stems from their unique backgrounds and experience. But an important factor lies in the fabric of Naples itself, a second-home community for wealthy executives that gives the fund-raisers a rich target for their philanthropic activities. Naples remains a small, close-knit town; these philanthropists know each other and their community intimately, and can readily identify with the city’s needs. Above all, Clinton says, “This is a group that came together organically, to share their passion for wine and for children’s charities, and, much as I wish it were the case, I’m not sure you can clone that. It’s up to others to figure out a new way to achieve the same goals in their own communities.”

The Auction’s Beneficiaries
The founding trustees set up the auction to benefit the Boys & Girls Club, and the group has decided to limit their largesse to children’s charities in their local community. In each of the auction’s four years, the number of beneficiaries and size of the donations has grown.

In 2004, they had intended to donate the auction’s proceeds to 15 charities, but the take was so much larger than the prior year that the $5.2 million went to 18 groups, ranging from Fun Time Early Childhood Academy and the Boys & Girls Club to the Guadalupe Center of Immokalee and the Florida Gulf Coast University Early Learning Literacy Center.  In 2003, of the $5.14 million raised, $3.75 million found its way to 14 charities. In 2002, the trustees were able to donate $2.5 million to eight groups.

Illustration by Tim Bower.