Philanthropy-Roundtable2

The Rosenkranz Foundation

The term patron is usually associated with Italian Renaissance families like the Medici and sounds a bit out of place in this age of outcome-based philanthropy. Yet it seems to fit Robert Rosenkranz. A tax lawyer and one-time economic analyst for Rand Corp., Rosenkranz is chairman and president of Delphi Financial Group, an insurance holding company. He started his Rosenkranz Foundation in New York some 16 years ago, after liquidating a company he controlled. “Rather than establishing a foundation whose staff would control its investments and grantmaking,” Rosenkranz tells Philanthropy, “I decided to invest the assets myself and give to causes I support.” It has proven a shrewd decision on both the grantmaking and investment fronts.

Rosenkranz focuses his grants on three divergent fields-higher education, Asian art, and public policy. “Most of our funding is not really grantmaking,” Rosenkranz says, “but providing support to organizations that we believe in.”

The foundation provided funding to the Manhattan Institute, on whose board he sits, to support the book Democracy by Decree: What Happens When Courts Run Government, which was published in 2003 and describes the harm done when attorneys and judges usurp control of schools and other local institutions. Rosenkranz has also endowed a writer-in-residence program at Yale University.

Rosenkranz’s personal touch is perhaps most evident in his support of Asian art. For 15 years, he has collected modern Chinese art with the help of a strong network of friends in Asia. “When I became interested in modern Chinese art,” Rosenkranz recalls, “no one else was doing it.” This allowed him to purchase museum-quality pieces cheaply and become one of the world’s foremost collectors of modern Chinese paintings. “High risk, high reward,” he says.

Mu Xin, an expatriate Chinese artist living in New York City and a victim of Mao Zedong’s Cultural Revolution, has greatly benefited from Rosenkranz’s hands-on approach to giving. Rosenkranz discovered Mu Xin’s paintings and worked with Yale University Press to publish a lavish catalogue of his works. He also put together a travelling exhibit that was displayed at Yale Art Gallery, the Smart Museum at the University of Chicago, the Honolulu Academy of Art, and the Asia Society in New York. Thanks to Rosenkranz’s efforts, Mu Xin has gone from obscure artist to well-known figure.

As the funding of Mu Xin demonstrates, Rosenkranz is not averse to taking risks. Donors “have to do things that we aren’t certain are going to work out,” he tells Philanthropy. But how does one avoid foolish risks? For Rosenkranz, the answer lies in staying close to the projects he’s funding.

An example of his strategic risk-taking is evident in the foundation’s efforts to get the Defense Department to take on a more-public face. “The Defense Department has no tradition of public diplomacy-no history of selling U.S. policy to the American people, and it hasn’t worked well.” To change this, Rosenkranz is funding some initiatives he hopes will “get senior members of the Defense Department to talk to journalists and go on talk-shows to get the word out.”

Investment Success

Rosenkranz has greatly helped his foundation with his investment choices. To date, it has enjoyed a return of between 15 percent and 20 percent on invested capital over the past 16 years-the recent bear market notwithstanding. Today, the foundation’s endowment is valued at some $15 million. Though small by some standards, the foundation multiplies its impact by making grants totaling between 8 percent and 9 percent of its assets each year.

The foundation’s relatively small size has led Rosenkranz to keep the board small. Currently, just he and his two children serve on it. Like him, both are attorneys. His son works in the Justice Department, his daughter in international arbitration. Robert Rosenkranz is preparing the two to take over at some point down the line.

“I consider it a good thing to put my children in a position to be philanthropists.” He isn’t concerned that they might take the foundation in a different direction. “The kids and I are on the same wavelength, and I can’t imagine them doing something that is anathema-the grandchildren haven’t been born yet, so I don’t know about that.”

For now, the Rosenkranz Foundation is set to operate in perpetuity. “If I didn’t have heirs that were interested,” he explains, “I’d be in a sunsetting mode.” In general, “I think it’s better to do what I want to do in my lifetime.”