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Feature
Perpetual Motion
Elizabeth Harris
02/01/2007

Eddie Phillips, a Minnesota philanthropist and head of his family’s beverage company, took a call from Jane Aronson, a pediatrician who wanted to improve health care for orphans in developing countries. She never asked him for his money. Instead, she wanted advice on how to establish a charity and run it like a business. Phillips was in California and Aronson in New York, and he said she would have to wait until he returned from a board meeting in Santa Monica.

Instead of waiting, she booked a cross-country flight and cornered him during a three-hour break in his meeting. She told him that she had noticed certain recurring problems among children adopted from countries such as Russia and Bangladesh: listlessness, small craniums, underdeveloped physiques. She wanted to set up health care facilities abroad to treat the problems at the source.

"It was instant rapport," Phillips recalls. Aronson said that she hoped he would eventually find her "worthy enough for collaboration," but he was impressed with her determination from the start. "I’m her unconditional supporter, and have never said no to her," he says.

TOP VIEW:
Philanthropists often realize that their favorite charities are overly dependent on one source of funding—them. Those who aim to ensure that their charities will endure need a plan for their financial sustainability. These strategies often entail establishing symbiotic relationships with other organizations, launching for-profit ventures and broadening their revenue sources.

Phillips is the fourth generation to run Phillips Beverage, part of which (the Belvedere and Chopin brands) he sold to LVMH in 2005. His mother, Pauline Phillips, was the original Dear Abby. Aronson has sought his advice and business acumen continually since she launched the nonprofit Worldwide Orphans Foundation in 1997. The two have an informal arrangement; they might exchange several emails one week and one the next. They have dinner when he travels to New York, and share a good-humored friendship.

Phillips oversees his family’s two philanthropies, the Jay and Rose Phillips Family Foundation and the Edward and Leslye Phillips Foundation, and has given millions to the Mayo Clinic and the Multiple Myeloma Research Consortium. But Aronson asks him for money only occasionally, relying more heavily on his counsel; his financial contributions have totaled hundreds of thousands of dollars, rather than millions. He recently gave $250,000 over two years to build new schools in Ethiopia for children with HIV/AIDS. Aronson originally planned to construct one children’s center there, but Phillips challenged her, questioning whether she might serve more orphans if she built four or five smaller centers. Phillips hopes to volunteer at the center in Addis Ababa with his wife and children in March.

Instead of writing huge checks, Phillips, Aronson and Aronson’s partner, Diana Leo, focus on networking and fundraising. Angelina Jolie appeared as a special guest at the foundation’s first gala in 2005 and has given $250,000 to the cause. USAID and the Bristol-Myers Squibb Foundation have provided similar grants. Perhaps more important than money, Phillips also offers a guiding hand and, if necessary, a tight rein on the organization’s direction.

JANE ARONSON has sought philanthropist Eddie Phillips’ advice since launching the Worldwide Orphans Foundation in 1997. The two focus on networking and fundraising to keep the organization running.

Phillips was the first to realize that Aronson was burning out when, in 2005, she began sending him emails in the wee hours of the morning. In handling the charity, her practice and her two adopted sons, her efforts were "teeter-tottering," she now admits.

Indeed, the Worldwide Orphans Foundation depended almost entirely on Aronson’s energy and personal relationships. Shortly thereafter, she and Phillips began discussing how this posed risks to the organization. She was running more programs than ever, but did not have an active board, a support staff or a long-term fundraising plan.

A patron who has become the primary benefactor of a particular cause is apt to panic when realizing that personal or family wealth and the work of a few handpicked staff members are the only fuel keeping the charity’s engine running. Philanthropists caught in this dilemma must take a strategic view toward reorganizing their charity so it can sustain itself should the donor’s financial fortunes change or a favorite nonprofit executive retires.

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