From creating a legacy and introducing family members to philanthropy to ensuring that donations are used effectively, there are lots of reasons that families associated with successful businesses are opting to take an active role in giving back. In this three-part series, Chief Executive spoke with philanthropic business leaders to gain their insights on supporting foundations, private foundations and donor-advised funds. This is Part II.
Harris Rosen decided not to wait until retirement to start giving away the money he made as an owner and operator of a collection of seven convention and leisure hotels all in Orlando. He still holds his full-time job as president and COO of Rosen Hotels & Resorts, which he founded.
But in 1990, he set up a private grant-making foundation governed by a three-person board, including himself and his CFO, Frank Santos, and started giving away money. Lots of money. Rosen has given away $63.4 million for free pre-school and college tuition, room, board and books for children in Orlando, to Haitian hurricane victims, Japanese earthquake victims and to other causes.
Rosen’s foundation is as close to being a one-man band as it gets, with the hotelier using the autonomy a private foundation offers to make grant-making decisions and participate in every aspect of running the foundation, which reportedly has an endowment of about $17 million.
“it occurred to me I had been blessed beyond anything I had ever imagined and it was time for me to… offer a helping hand to people who need it.”
His foundation is fiscally efficient, curtailing operating expenses—which average .69% of assets across the universe of U.S. private foundations, according to IRS records—by outsourcing much of the machinery that most foundations build in-house. An outside lawyer handled filing for 501(c) tax status and an outside accountant prepares the annual tax return.
“About 25 years ago, sitting at my desk contemplating a fifth, sixth and seventh hotel, it occurred to me I had been blessed beyond anything I had ever imagined and it was time for me to acknowledge the presence of God and also to try to offer a helping hand to people who need it,” says Rosen, who was born and raised in New York City’s then-gritty Lower East Side.
Like all private foundations, the Harris Rosen Foundation must distribute 5% of its assets annually, although Rosen chooses to distribute significantly more. The heart of his giving has been the Tangelo Park Program. In 1993, he essentially adopted a run-down, drug-infested section of Orlando with a 90% minority population base. Working with the approval of county education officials, he started offering free preschool for all children in Tangelo Park from age two to four.
“The advantage stays with the child through high school and college,” says Rosen, who founded the program. The program offers counseling and support to the same kids in high school and pays for any public college or technical school enrolled in after graduation.
Today, the high school graduation rate is 100%, up from about 45% when Rosen started his program. College graduation rates are 80%, far higher than the national average. Crime in Tangelo Park is down and real estate values have soared. There are no case officers overseeing Rosen’s projects. He simply pays the bills.
Other causes have included offering scholarships to Cornell University, contributing approximately $8.8 million toward a new Jewish Community Center and endowing a hospitality school at the University of Central Florida. Rosen is about to “adopt” another tough section of Orlando called Parramore. At 77, he has no plans to slow down.
Part I: The CEO’s Guide to Giving: Working to Solve World Problems
Part III: The CEO’s Guide to Giving: Building a Donor-Advised Fund