The Business of - Philanthropy Roundtable

30 Philanthropy • Fall 2010

ON A SWELTERING AFTERNOON IN LATE JULY, Iwent in search of an address in the Bronx thatno longer exists. According to my GPS, Ishould have found 1595MacombsRoad halfa block north of the intersection with the

Cross-BronxExpressway.What I discovered insteadwas a vacant lot sandwiched between an auto-bodyshop and a run down apartment building. Of thechildhood home ofRogerHertog, nothing remains.

From Macombs Road, I drove north to theborough’s bustling Fordham Heights section topay a visit to the Bronx Library Center, five storiesof gleaming glass and sloping metal built largelythanks to a multimillion dollar gift from Hertog,vice chairman emeritus of investment giantAllianceBernstein. On the day I was there thelibrary hummed with activity; the building’smechanic told me there had been more than 3,000visitors on that day alone. The library’s 78,000square feet of space—ultra-modern, immaculately

Bret Stephens is the foreign-affairs columnist and a deputy

editorial page editor of the Wall Street Journal. He was pre-

viously editor-in-chief of the Jerusalem Post.

New York City

Meet Roger Hertog, Winner of the2010 William E. Simon Prize for Philanthropic Leadership

By Bret Stephens

maintained, and more than three times the size ofthe borough’s old public library—contains some200,000 books, periodicals, and recordings, aswell as more than 150 computers. When it openedits doors in 2006, New York Public Library Pres-ident Paul LeClerc rightly called it “one of the sin-gle most important and beautiful public librariesin all of urban America.”

As the crow flies, the Bronx Library standsabout two miles from 1595Macombs. For Hertog,the journey between the two places traces a steepand far more circuitous route. It begins in decided-ly modest circumstances. It rises thanks to his roleas a founding partner of one of the most admiredfinancial research and asset management firms inthe world. And it culminates in a philanthropicenterprise, unique in its purposes and methodology,

The Business of

BigIdeas

Philanthropy • Fall 2010 31

PhotocourtesyoftheNew-YorkHistoricalSociety


T H E B U S I N E S S O F B I G I D E A S

that so far has already given more than $140 mil-lion and which Hertog is still scaling up.

Among Hertog’s beneficiaries—to name just afew—have been think tanks such as the AmericanEnterprise Institute, the Manhattan Institute, theCouncil on Foreign Relations, and the Washing-ton Institute for Near East Policy; cultural institu-tions such as the New-York Historical Society, theMetropolitan Museum of Art, and the New YorkPhilharmonic; summer schools at Columbia andin Washington, D.C.; public libraries, Catholicschools, and university honors’ programs; individ-ual scholars and authors; and an archeological digin Israel. He has funded journalistic ventures suchas Commentary and National Affairs (both non-profit) as well as profit-seeking—if often money-losing—ventures like the New Republic and thenow-defunctNewYork Sun. And through the Tik-vah Fund—a foundation created by his late busi-ness partner, Zalman Bernstein, and chaired todayby Hertog—he has also given money to an aston-ishingly wide array of Jewish causes, a law centerat New York University, a summer program atPrinceton University, and the Shalem Center, andinfluential think tank in Jerusalem.

As the list suggests, Hertog is interested mostof all in the power of ideas, the people who con-ceive them, the institutions that transmit them, theyoung minds that receive (and re-conceive) them,and the social capital they can generate. And, ashe did in the business world, he’s willing to bepatient with his money.

“Roger thinks of philanthropic endeavorsas investments,” says Norman Podhoretz, thelegendary former Commentary editor and long-time friend of Hertog. “The return he expects islong range.”

“The Deepest Questions”IDEAS HAVE ALWAYS PLAYED A DECISIVE ROLE IN

Hertog’s life. It’s a story he recounts with disarmingcandor while smoking a cigar in the study of hisweekend home in the Hamptons. Born in 1941, hewas the only child of two secular German Jewswhofled from the Nazis in 1938. “I had no siblings. Myfather had no relations. My mother had a sister inthis country; I had a cousin. That was the extent ofmy family.” Nearly everyone else had perished inthe Holocaust. Their absence, he has often said,caused him to ask “the deepest questions.”

One of those questions was why there wasnot one but two portraits of Franklin Roosevelt in

“Swans, pigeons, and Orthodox Jews,” Hertog quips, “mate for life.”Roger married Susan in 1965 (inset); above is the painting

commissioned for their 25th wedding anniversary; at right, theHertogs at the New-York Historical Society in 2007.

(Photos courtesy of the Hertog Foundation and N-YHS)


his family’s one-bedroom apartment when, as hesaw it, FDR had done nothing to stop the Holo-caust. “It pushed me away from liberalism; mademe distrustful of government,” he says. It particu-larly upset him that he couldn’t seem to find abook that had a bad word to say about Roosevelt,sparking a lifelong quest for alternative ideas thatoffered a richer, more persuasive account of his-torical, political, and economic phenomena. Oneearly intellectual turning point came from readingEdmund Burke’s Reflections on the Revolution inFrance. “It was a big idea,” he says. “And it wasthe quintessential conservative idea: that therewas something to respect and honor in tradition;that you just cannot destroy all that’s come beforeyou in the interests of starting anew because theresult is anarchy.”

Hertog’s family life was not a happy one.Though the Bronx was not yet a synonym forurban decay, middle-class flight and lawlessness,his own family was something of a harbinger ofthe type that was soon to become depressinglycommon. “It was a really dysfunctional home,”he recalls. “My father wasn’t really a father. Henever provided any real support. I never went to aballgame with him, never went to a circus, neverwent to dinner.” His mother, who would die whenhe was in his early 20s, earned a small living as afile clerk at a company that made contact lenses.

Indeed, one of the few places Hertog was ableto find emotional and intellectual succor was thenearest public library. “The only place you couldactually go and think, not that I pride myself onsuch great thinking, but you’d go to the library,”he told theWall Street Journal in a 2008 interview.

By the time he was 10 years old, he was deliv-ering meat for a butcher shop and, later, workinga newspaper route. He showed enough academicpromise to win a spot at Manhattan’s eliteStuyvesant High School, but he left after two yearsfeeling overawed by his peers and exhausted by thelong commute. His first real job was in the mailroom of a small firm that provided technical finan-cial analysis, where he worked while attendingnight school at City College (“the Harvard of thepoor,” as it was known at the time). Later, he gota clerical job at Oppenheimer & Company.

It was at Oppenheimer in 1962 that Hertogmet the man who would change his life. SanfordCharles (“Sandy”) Bernstein had come to Oppen-heimer by way of Harvard Business School and astint working for the Marshall Plan in Europe, as

The Philanthropy Roundtable is honored to have beenasked by the William E. Simon Foundation to adminis-ter the William E. Simon Prize for Philanthropic Leader-ship. The foundation is named for its principal benefac-tor, the late financier, philanthropist, and Secretary of theTreasury, William E. Simon Sr.

The purpose of the William E. Simon Prize for Philan-thropic Leadership is to highlight the power of philan-thropy to promote positive change and to inspire othersto support charities that achieve genuine results. Theprize is intended to honor living philanthropists whohave shown exemplary leadership through their owncharitable giving, either directly or through foundationsthey have created.

The prize honors the ideals and principles which guidedWilliam E. Simon’s many philanthropic initiatives,including personal responsibility, resourcefulness, volun-teerism, scholarship, individual freedom, faith in God,and helping people to help themselves.

The Philanthropy Roundtable would like to thank the2010 Selection Committee, composed of Kimberly O.Dennis, Betsy DeVos, Frank J. Hanna III, Adam Meyer-son, W. Fred Smith Jr., John M. Templeton Jr., M.D., J.Peter Simon, and William E. Simon Jr.

The William E. SimonPrize for PhilanthropicLeadership

well as a couple of jobs that ended abruptly in dis-missal. At 36, he was one of Oppenheimer’s topproducers and already a larger-than-life figure.

“I was 5’8” and weighed 130 pounds,” Her-tog would recall in his eulogy for Bernstein afterhis death in the winter of 1999. “He was 6 feettall and weighed 210 pounds…. Besides his phys-

quips, “mate for life.”) Professionally, however,Hertog was still looking for his main chance. OnOctober 2, 1967, he saw it.

“It” was a full page ad in the New YorkTimes. In large, bolded type it read, simply andalmost preposterously:

BERNSTEIN. [square period]

At the foot of the page were added the words,“Specializing in discretionary accounts.” That was it.

“This Is My Chance”THE STORY OF SANFORD C. BERNSTEIN & CO.ranks among the great successes in the history ofAmerican finance. But its beginnings were nothingif not inauspicious. In the late 1960s, “discre-tionary” (or managed) accounts—in which clientssurrender to their broker the right to buy and sellsecurities without their consent—were considered adubious business by much ofWall Street. “The fearwas that discretionary accounts opened the door topotential abuses,” says Marilyn Fedak, the vicechair of investment services at AllianceBernsteinand a 26-year veteran of the company. “But Sandyfelt very strongly it was the only way to do things.”

In fact, Bernstein felt strongly about manythings and had no trouble expressing his opinions,often to the irritation and dismay of others. With-in a few months of the company’s founding, allbut one of his partners had abandoned him, andthe one who remained was his brother. “He wastotally alone,” says Hertog. “And so he came tome and a couple of others with an attractive offer.I went to Susan; told her there’s a good chancethis will fail. But if I’m really good at business,then this is my chance.”

The early years of the firmwere often difficultand in some respects downright strange. Staffturnover was high. The company’s researchdepartment was a mess. Among Bernstein’s moreunusual corporate innovations was to hire a clin-ical psychiatrist to observe company executives.“With all that analysis going on, I began to thinkI was the one who was neurotic,” one formerBernstein research analyst told InstitutionalInvestor in 1972. Bernstein’s management stylecould often seem unfathomable to his employees.In his own eulogy for Bernstein, Lewis Sanders, ayoung math prodigy who joined the company in1968 and rose to become its CEO, describedthose methods thus:

“Working with Sandy required an ability to



ical girth, he was the largest figure I had evermet—outrageously confident, bold, imposing. Hewas hungry for life and had a voracious appetite—for food, for sex, and for achievement…. [His]conversations, more like monologues, would befilled with a constant stream of sexual allusionsand profanities. Need I say, I was shocked—soshocked, I was magnetized.”

Bernstein soon left Oppenheimer to become apartner at another firm, while Hertog remainedand prospered. By the time he was 26 he was earn-ing $25,000 per year—$170,000 in today’s dol-lars—and living on the Upper East Side of Man-hattan with his wife Susan, whom he met at amutual friend’s sweet 16 party and with whom hehas had three children. (They remain marriedtoday: “Swans, pigeons, and Orthodox Jews,” he

decipher [his] code. . . . First, his way of lettingyou know his point of view: ‘I’m just livid—thiswill happen over my dead body!’ What he reallymeant to say was: ‘I’m not sure I agree with you,I need to think about it, give me some timebefore you proceed.’ His evaluation of a newidea you’ve just come up with: ‘That’s just stu-pid.’ And for emphasis he liked to exaggerate the‘t’ and the ‘u.’ ‘That’s just STTEWPID!’What hereally meant was: He really didn’t agree, wouldnever agree—and you could do it anyway, butyou’d better be right.”

Yet for all that, the firm gradually began toright itself, thanks in no small part to the ways inwhich Hertog and Sanders anchored Bernstein’sbattleship of a personality and helped to give struc-ture and discipline to his creative genius. Sanderswas cool and analytical, while Hertog had a keengrasp of how to motivate staff, cultivate talent,and reach out to clients. But the firm’s success wasmore than simply a matter of adjusting to individ-ual styles. It was mainly about the culture that thethree men instituted, and the seamless way inwhich their moral and intellectual values meshedwith corporate strategy.

First among those values was the firm’s com-mitment to its clients. “It was the insight that if wefocused on the clients and gave them financial suc-cess and peace of mind, we ultimately would suc-ceed,” says Fedak. “There were no sales goals, rev-enue expectations, or profit targets. It was allabout the clients.” The firm gained a reputationfor probity, correcting errors even when the clientsthemselves hadn’t noticed them. Bernstein alsotook the step of giving all of its clients the samelevel of service, no matter whether they were$100,000 or $10,000,000 investors. “Nobodyhad ever done that before,” Hertog explains. “Inbrokerage firms, they still don’t.”

Besides treating clients ethically (and equi-tably), the company also went to enormouslengths to keep them engaged and in touch withwhat the firm was doing, even if the clients didn’tquite have their hands on the investment-makingtiller. “[Hertog’s] credo,” noted a 2008 study ofthe firm by the Harvard Business Review, “wasthat good client relations are the key to a success-ful business—that it does not always matter if theinvestment performance is good or bad so long asthe client receives a full explanation of what hashappened.” Or, as Fedak succinctly puts it: “Totalhonesty is a very underrated marketing tool.”

Second, there was the way the firm treated itsown staff. The work ethic at Bernstein was notori-ously ferocious. Prospective employees were some-times asked to come for their interviews on Sundays,just to underscore the kind of hours they would be


expected towork if hired. Equally ferocious was theattention to detail. “Management, Roger-style,”explained one Bernstein employee atHertog’s retire-ment party in 2006, “[meant] that the highestreaches of the company get involved in everythingdown to the color of the writing on the slides.”

But even as the firm expected much of itsstaff, it also went out of its way to give themsomething to be profoundly loyal to. The com-pany cultivated its own talent, promoted fromwithin, placed a premium on teamwork, and

eschewed the usual Wall Street practice ofpoaching talent from other companies andallowing its various divisions to be run by finan-cial princes operating in a loose confederationof states. “We said we’re not the German army,but we all sing from the same song sheet,” saysHertog. As a result, Bernstein was able to trans-form itself from a company that couldn’t retainits people to having one of the lowest turnoverrates in the financial industry.

Finally, there was the premium the firmplaced on intellectual independence. This took

As a young man, Hertog says, he was interested inmoney, girls, and ideas—in that order. “I married theright girl. I made some money. That checked those offthe list. So ideas became increasingly important.”

(Photo courtesy of the Hertog Foundation)

Perhaps the most notableCENTER OF EXCELLENCE IS

the James Madison ProgramAT PR INCETON UNIV ER S ITY.



we as a firm had to say—and we often had veryimportant things to say.” Fedak emphasizesHertog’s perfectionism: “Every time we’d go toclients we’d have a dress rehearsal. His hound-ing you to do things over and over could be veryannoying. But in the end, you knew it was goingto be a million times better.”

Hertog’s personal fortunes rose smartly withthose of his firm. But Hertog wasn’t merely becom-ing a very wealthy man. He was also reflecting onthe deeper lessons of the firm’s success.

“So Ideas Became Increasingly Important”THE CONVENTIONAL VIEW OF CAPITALISM HOLDS

that it is a system based on individual greed, ethi-cal corner-cutting, and zero-sum competition inwhich one man’s gain is inevitably another man’sloss. In this analysis, the best that can be said forcapitalism is that it instills efficiencies in the mar-ket and creates prosperity, but that it needs to betied down by regulation, bled by taxation, andotherwise offset by a countervailing moral codeemphasizing charity and community.

For Hertog, what the Bernstein experiencedemonstrated was that all this was a load of rub-bish. On the contrary, the more ethical a compa-ny’s behavior, the more it would attract and retainoutstanding employees, the more trusted it wouldbe by its customers, the greater the dividends itwould yield for its partners and shareholders, andthus the more valued it would be by the market.Bernstein proved not only that it was possible todo well by doing good, as the old truism has it, butthat one could also do good by doing well.

What’s more, Hertog saw Bernstein’s successwithin the larger framework of what America wasreally about. Visiting with many executives atsome of the largest companies, he recalls, “Iwould meet with chairmen of the boards—verysmart men. But they didn’t see their business inrelation to a larger set of ideas. I saw the parallels.I saw business, entrepreneurship, liberty, how thesystem worked and why capitalism is somethingto be really enamored with.”

Hertog speaks of his interest in ideas as fol-lowing a sort of natural progression: As a youngman, he says, he was interested in money, girls,and ideas—in that order. “I married the right girl.I made some money. That checked those off thelist. So ideas became increasingly important.” Thetruth is that he was far more intellectually inclinedas a young man than he usually lets on. A college

two forms. Bernstein insisted on a value-basedapproach to stock-picking: Looking for bargainswhose real worth would eventually be recognizedby the market, he believed, was preferable to the“growth-based” strategy of most asset manage-ment firms which thrive in bull markets but sufferin downturns. The preference for value demandeda willingness to buck the popular trend and waitpatiently for the expected returns to roll in. “Weoften were the voice of reason in a panic or a bub-ble,” explains Sanders.

Bernstein also prized (and was prized for) theindependence of its research division. This, too,was a departure from the Wall Street norm.“From the start, Sandy Bernstein had understoodthat a well-balanced, conflict-free research envi-

ronment would be a powerful competitive advan-tage,” noted the Harvard Business Review. “Thefirm sacrificed considerable revenue by refusing toparticipate in underwritings that might compro-mise its ‘top-notch independent research.’ But as aresult, Bernstein analysts were much less confinedthan others in issuing honest recommendations. .. . Many clients believed that was precisely why[Bernstein] was worth their commission dollars.”

It took Bernstein more than a decade toimplement the fundamentals of corporate strategyand its culture of honesty, loyalty and indepen-dence. Once it did, the growth was explosive. “In1980, we had less than $100 million under man-agement,” recalls Hertog. “When we merged withAlliance Capital [in October 2000], we had $90billion. All without any acquisitions.” By the timeHertog retired six years later, total assets undermanagement were approaching $1 trillion.

Throughout his 38 years with the firm, Her-tog played multiple and overlapping roles. SallieKrawcheck, a former top Bernstein executive,once called Hertog the company’s “marketinggenius;” Sanders describes him as its “editor-in-chief,” though he is quick to add that the desig-nation “undersells Roger’s contribution. Whathe did was bring to life the real essence of what




professor awakened his interest in the Federalist,fromwhich he says he learned lessons in how peo-ple come together, how governments are formed,and whether men in government could be trustedto make sound decisions. Even more revelatorywas his discovery of a quarterly journal of ideas,minuscule in its circulation but hugely consequen-tial in its influence, called the Public Interest.

“It was like a sex novel to me,” Hertog confess-es. “Nathan Glazer, Pat Moynihan, Martin Dia-mond: Reading these guys, I learned how to think.”

The Public Interest first appeared in 1965,at the high-water mark of Lyndon Johnson’sGreat Society. While the journal was not initial-ly considered a conservative publication (muchless a “neoconservative” one, given that thelabel had not even been coined yet), it immedi-ately struck a skeptical note about the prevail-ing faith in the government’s ability to fine-tunesociety and cure its assorted ills through techno-cratic and redistributionist means. It was askepticism to which Hertog felt powerfullydrawn as he watched New York City crumbleunder the tenure of Mayor John Lindsay. “Theywere doing things that violated human nature,”he says of Lindsay and his lieutenants.

Equally clear to Hertog was that the prob-lem with Great Society programs wasn’t (orwasn’t only) that they were badly organized andincompetently managed. It was the poverty ofthe Great Society’s underlying assumptionsabout the sources of crime, the uses of welfare,the importance of public order, the purpose ofpublic education, the aesthetics of public places,and so on. For any of that to change, a better setof ideas would have to be found, championed,disseminated, and put into practice.

Symphony orchestras, medical centers, artmuseums, and private universities all could relyon a steady stream of philanthropic largesse.But where were the angel investors when itcame to the making of great ideas? “Philan-thropists are too business-oriented: They’relooking for something that’s self-sustaining,”Hertog argues. “But was the Public Interest‘self-sustaining’? No. If you want excellence,you have to pay for it.”

Throughout the 1970s, Hertog had givenmoney to charities—mainly synagogues orIsrael-related causes—but, he admits, “I wasvery unimaginative.” Yet his sense of what waspossible began to change in the early 1980s,when Chuck Brunie (another friend from hisOppenheimer days who had stayed with thefirm and gone on to a legendary career) invitedhim to join the board of the Manhattan Insti-tute, a think tank specializing in economic,

social, and urban policy. It was at the Manhat-tan Institute that Hertog discovered that “therewere other business guys who really cared aboutthe city, about ideas, and that you could have areal interaction with some serious scholars.”Among those scholars, Hertog was particularlytaken with Charles Murray, whose 1984 bookLosing Ground established the intellectualfoundations for “ending welfare as we know it”12 years later, Peter Huber, who laid out a pow-erful case for legal-liability reform in a series of

books on the abuses of the tort bar, and MyronMagnet, the author of The Dream and theNightmare, which addresses the intersection ofculture and dependency and the breakdown ofminority families.

To illustrate the influence the ManhattanInstitute had on public policy in general and NewYork City politics in particular, Hertog tells thestory of how, as a member of its board, he calledfor a conference shortly after David Dinkins’ elec-tion as mayor in 1989, at a time when the crackepidemic was at its apogee, the murder rate wasfive times what it is today, and the economy wasmoving toward recession. The purpose of the con-ference was to put together a set of practical ideas

“Irving Kristol, Nathan Glazer, Pat Moynihan, Martin Diamond: Readingthese guys, I learned how to think,” says Hertog, pictured here with Kristol’s

son William, editor of the Weekly Standard(Photo courtesy of the American Enterprise Institute)





at the institute and other think tanks that he hadused to help shape Bernstein’s research depart-ment. He insisted that “money follows ideas,”rather than the other way around. He alsoinsisted on cultivating the right people ratherthan looking for the hot topics. “It’s exactlywhat you do in business.”

From the Manhattan Institute, whose boardhe would chair for a decade, Hertog’s involve-ment in other idea factories—not just thinktanks, but also journals of opinion, specializedcultural institutions, newspapers, and universi-ties—only multiplied. The institutions he gener-ally favored tended to lean politically to theright, but not exclusively, and by no means indoctrinaire ways.

“He’s definitely not a partisan in a blindsense,” says Betsy McCaughey, the former lieu-tenant governor of New York who came toknow Hertog when she was a scholar at theManhattan Institute. “It doesn’t matter to himwhether an idea is labeled Democratic orRepublican.” McCaughey points to Hertog’sbrief ownership stake in the traditionally liberalNew Republic, whose editorial independence henever interfered with. During the weekend Ispent with him in his home in the Hamptons, heinvited a prominent left-leaning foreign policyexpert to lunch to debate Middle East policywith a former Bush administration official. Her-tog clearly has his political views. But he alsobelieves in the inherent value of debate and theferment of ideas.

“Ted Williams Hit .400”MUCH MORE FIRMLY SETTLED ARE HERTOG’Sideas about how great philanthropies ought to berun. For starters, he insists that he has no interestin starting a family foundation and intends that allhis philanthropic funds should be given awaywithin 20 years of his death. Money, he says, “cando wonderful things, but it can also poison rela-tions.” He contends that the best philanthropicinvestments take the form of seed capital in pro-jects that can entice other philanthropists to join:Excessively large donations, he warns, are “dan-gerous because too many people will say, ‘he’ll doit for us.’” He believes that philanthropy is not asocial or moral vanity, and that philanthropists,like businessmen, need to be careful stewards oftheir investments, and be willing to cut off fund-ing if their projects are not succeeding. “Roger

about how to tackle crime, welfare, and everythingelse that ailed the city. “We put a whole bunch ofpeople together,” says Hertog. “And in the cornerof that conference was [future New York CityMayor] Rudy Giuliani, scribbling on a yellow pad,taking notes through this whole thing.”

But even as Hertog was learning from thescholars whose work he funded, he was alsoapplying his business smarts to improve the

Manhattan Institute’s effectiveness. It helpedthat he had the likes of former Citibank chair-man Walter Wriston, Peter Flanigan, WalterMintz, and investor Richard Gilder as philan-thropic mentors. “Gilder told me, ‘We knowwhat the world is like; most scholars have noidea.’ You bring something valuable to the tableand they can bring something valuable andsomewhere in between there is a synthesis.” SoHertog went about applying the same principles

“It was Roger’s idea to renovate the building,” says Louise Mirrer,president of the New-York Historical Society. “He saw the building asan asset. He has moved us in the direction of thinking about this

institution as a business.”




spends a lot of time researching the projects hemight wish to support,” says Podhoretz. “Heinterviews people, he makes on-site visits, some-times he even selects the furniture.”

Hertog has also studied and adapted theinsights of others, particularly Gilder, investorMichael Steinhardt, and, not least, Bernstein him-self. “Gilder and Steinhardt—they were specula-tors,” he says, speaking not of their businesscareers but of their philanthropic endeavors.Gilder was the moving force behind a once-unthinkable idea. He believed that private philan-thropy could help recapture Central Park fromvagrants and criminals and restore it to its properowners: New York City’s law-abiding citizens,who deserved a magnificent green space in theheart of their crowded city.

Steinhardt, meanwhile, conceptualized“Birthright Israel,” an equally improbable idea.He thought that, with a free plane ticket and 10-day tour, young Jewish adults would form a life-long attachment to Israel. So far, 260,000 Jewsfrom around the world have taken the trip.

As for Bernstein, he understood that the miss-ing component in Jewish philanthropy—lavishlyfunded when it came to hospitals, cultural institu-tions, or charitable causes—was an investment inJewish ideas, Jewish religious beliefs, and Jewisheducation. For this, Bernstein established not only

Tikvah (about which more below) but also AviChai (which means, “My Father Lives”), anothersunsetted foundation that aims to encourage Jewsto become more knowledgeable about, and com-mitted to, their faith.

But the largest insight—what Hertog calls his“big epiphany”—is his conviction that philan-thropists tend to be far too cautious when it comesto giving away their money. “This is ironic,” henotes wryly. “In order to make their money, phil-

anthropists take incredible risks. In their philan-thropy, they’re incredibly risk-averse.” How muchrisk is Hertog willing to accept? “Ted Williams hit.400,” he says. “In business, if you’re right 55 to60 percent of the time you’re a genius, so long asyou don’t get obliterated when you’re wrong.”

Hertog has certainly funded his share of fail-ures. He has ambivalent feelings about the Bronxlibrary, which he had hoped could become a place

“The only place you could actually go and think, not that I pride myself on such great thinking, but you’d go to the library,” says Hertog.He was the lead private funder of the Bronx Library Center, which opened in 2006. (Photo courtesy of the New York Public Library)





closed its doors six years later after a heroic, ifchaotic, run. That investment cost him more than afew million. Yet Hertog has no regrets about thefinancial losses he sustained. “If you’re investing inideas, you shouldn’t necessarily restrict yourself tothe tax deductibility of something,” he says. “If Ifound another vehicle like that, I’d do it again.”

Yet, just as at Bernstein, Hertog’s philanthrop-ic successes have easily outnumbered the failures.Some raw numbers help make the point.

Take primary education: In the 1990s, Hertogjoined investors Peter Flanigan, Bruce Kovner, TomTisch, and Richard Gilder to launch one of the firstprivately funded school-voucher programs, inwhich they funded 1,000 scholarships annually forpoor families seeking to enroll their children in pri-vate (mainly Catholic) schools. Some 25,000 stu-dents applied, demonstrating just how muchhunger there was among minority parents for bet-ter educational choices for their children. Morerecently, Hertog has commissioned a study of char-ter schools in New York to see whether there aresmarter ways to invest in the charter movement:“Can you go for amarket share play?” hewonders.“Can you put your money in a single borough?Because once you have a critical mass, then the par-ents could become a positive political force.”

where neighborhood youngsters could get thekind of supplementary tutoring they probablyweren’t getting in their local schools. Theobstructionist politics of public education got inthe way of that ambition. Some of his invest-ments in for-profit idea-generating enterprises

have likewise not panned out. With Steinhardt,he took a controlling interest in the NewRepublic in 2002—an investment, as Seth Lip-sky put it at the time, in the “depressed stock”that was the “right-wing of the DemocraticParty”—only to sell their stake to a Canadianmedia company a few years later after losing acouple of million dollars.

That same year, he was a major investor in the(Lipsky-edited) New York Sun, the city’s first newdaily newspaper inmore than half a century, which

“Dick and I would email all day long,” says Louise Mirrer, president of the New-York Historical Society.“I’d come in on a Saturday and send him an email saying, ‘We’re crowded,’ and he’d email me back, ‘I’m coming over,’ because he wantedto savor that amazing excitement that people were feeling.” Mirrer, left, joins Laura Bush, Thomas Bernstein, and Gilder at a 2005 gala.

(Photo courtesy of the New-York Historical Society)




Or take cultural institutions: Hertog has givengenerously to the Metropolitan Museum of Artand the New York Philharmonic, saying “it’s aprivilege to give money to them.” A greater passionis the 206-year-old New-York Historical Society—whereHertog serves as chairman andwhich he seesas an opportune place in which “to address the bigquestions in American history”—he alighted on theidea of using the society’s resources to educate NewYork’s social science teachers. “Roger sets goals,”explains LouiseMirrer, the society’s president. “Wehad a discussion: How many teachers in NewYork’s public schools teachhistory? He thought weshould have them all comethrough and be involved insome way.” The number, itturned out, was about 4,000,and sure enough, all 4,000have attended the society’sprofessional developmentworkshops. For the bicenten-nial last year of Abraham Lin-coln’s birth, Hertog also urgedthe society to put together anexhibit on the subject of Lin-coln in New York. It was ablockbuster, attracting200,000 visitors, half of themschoolchildren.

Now the New-York His-torical Society, with its choiceCentral Park West address, isin the midst of a $60 millionfacelift that would have beeninconceivable only a few years ago, when the orga-nization nearly went bankrupt. “It was Roger’s ideato renovate the building,” says Mirrer. “He saw thebuilding as an asset, and that meant it had to bemodernized and made more permeable to the out-side, which will enable us to earn admissions rev-enue. He has moved us in the direction of thinkingabout this institution as a business.”

Finally, take Hertog’s most recent venture:summer schools. He funds, through Tikvah, atwo-week summer program at Princeton on “Jew-ish Thought and the Enduring Human Ques-tions.” Three hundred undergraduate studentsapplied; 60 were accepted. He has inaugurated theHertog Political Studies Program in D.C., a six-week undergraduate program on political thought.More than 160 students applied for just 24 posi-tions. At Columbia, he has established the 12-week Hertog Global Strategy initiative, focusingon questions of nuclear policy. Here, too, compe-tition for the program is fierce, with 84 applicantsfrom around the world vying for 21 slots.

The applicant/admitted ratio underscoresthe popular demand for what Hertog is offering.And no wonder: At Princeton, students “spendtwo weeks with the best peers thinking about thelargest subjects, bringing Jewish texts and West-ern philosophy in a conversation with eachother,” explains Eric Cohen, the executive direc-tor of the Tikvah Fund. At the Hertog PoliticalStudies Program, students divide their timebetween studying statecraft and meeting withsome of its actual practitioners of statecraft,including Henry Kissinger, Gen. Jack Keane, and

Israeli ambassador to theUnited States Michael Oren,to name a few. (The pro-gram is run by John Walters,former president of ThePhilanthropy Roundtableand later Drug Czar underPresident George W. Bush.)At Columbia, the speakers’list is a Who’s Who ofnuclear experts, includingformer IAEA director HansBlix, Deputy Secretary ofState James Steinberg, andthe 9/11 CommissionExecutive Director PhilZelikow.

These investments inselective summer schools thatdraw students from across thecountry have enabled Hertogto provide outstanding educa-tional opportunities without

having tomake overhead investments in universities.“Philanthropists give a heck of a lot ofmoney to uni-versities, but how much influence do they have overit?” asks James Ceaser, a professor of politics at theUniversity of Virginia who teaches at the D.C. pro-gram. “Roger doesn’t give for prestige or anythinglike that. He gives because he has a sense of what hewants to accomplish.”

“A Supply-side Vision of IntellectualCapitalism”SO WHAT DOES HERTOG WANT TO ACCOMPLISH?Here another of his educational ventures helpssupply the answer. In September 2008, he paid avisit to a private club in New Haven, Connecticut,to meet with about 20 up-and-coming history andpolitical science professors from universities acrossthe country. For several years, Yale University hadrun a year-long program in Grand Strategy, whichcombines intensive studies in the theory and histo-ry of statecraft, crisis-simulation exercises, andplacements in prestigious summer internships. The

By the late 1990s, a dying Bernstein(above) had changed his first names fromSanford Charles to Zalman Chaim, boughta home in Jerusalem, and become a veryobservant Jew. “You will learn about beinga Jew,” Bernstein said, asking Hertog toserve as chairman of the Tikvah Fund.

(Photo courtesy of the Hertog Foundation)


highly selective program had quickly become leg-endary for its high-powered workshops—a 2008Wall Street Journal story described then–DeputySecretary of State John Negroponte meeting thegroup as “helicopters circled above the restau-rant while the participants ate”—and for thequality of its graduates, many of whom takepositions of influence in Washington.

Deeply impressed, Hertog saw an opportu-nity to expand the Grand Strategy franchise toother universities and was willing to spend mil-lions to do so—provided the assembled profes-sors could prove to him they had the intellectu-al chops. “Grand Strategy was another way tothink about how you influence the next genera-tion of leaders,” says Hertog. The program, headds, “doesn’t necessarily produce conserva-tives. But if you allow the free market of ideas towork, you’ll win your share of debates.”

The question of how to educate the next gen-eration of conservative leaders (particularly thoughtleaders) is clearly one of Hertog’s central preoccu-pations. He worries that conservatives “haven’treally invested in the creation of new leaders at theintellectual source, which is the university—and notjust any universities, but the great universities.”Without such leaders, he fears, foundational con-servative ideas about private property and markets,responsibility, and risk-taking, tradition and inno-vation, and America’s purposes in the world aredoomed to seem antiquated, stale, and thus politi-cally moot—much as they were when LionelTrilling could say, mid-century, that there were noserious conservative ideas to speak of, only “irrita-ble mental gestures which seek to resemble ideas.”

Avoiding a reprise of that situation—theimmediate prelude, historically speaking, to thepolicy excesses and failures of the 1960s and’70s—is what much of Hertog’s philanthropy isultimately about. This certainly explains his fund-ing for National Affairs, which began publishinglast year and is effectively the successor to thePublic Interest. “When [the Public Interest] wasformed, it brought together a remarkable groupof thinkers to tackle a series of very big questions,that at the time were being contested by the GreatSociety,” says Hertog. “In 2009, a number of usthought this was another moment like that.”

In backing National Affairs, funders—including Hertog, Bruce Kovner, and Paul Singer,as well as the Lynde and Harry Bradley Founda-tion, the Searle Freedom Trust, and the William


“What was consequential for me was the whole idea of seeing the Bible as apiece of history,” says Hertog of his support for the dig that may have foundKing David’s palace (above). “Investing in archeology is like drilling for

oil: There are many more dry holes than big hits. But while there isn’t a signon it, there really is a high probability that this is, in fact, David’s palace.”

(Public domain photo by Deror Avi)


E. Simon Foundation—were fortunate to findYuval Levin. At the time, Levin was a 32-year-old think-tank scholar and former White Houseaide. Hertog considers Levin the “intellectualheir to Irving Kristol.” (The respect is clearlymutual; Levin credits Hertog as the “visionary”and “driving force” behind the creation ofNational Affairs.) Indeed, it is no stretch to saythat Hertog’s investment in the journal is reallyan investment in Levin himself, consistent withHertog’s belief that what matters when it comesto investing in ideas is finding the right peoplefirst. Only then does the question arise of creat-ing the right vehicle to put their minds to work.

Much the same can be said for Hertog’s back-ing of the James Madison Program in AmericanIdeals and Institutions at Princeton, which awardsfellowships and hosts seminars for visiting schol-ars and students on the “enduring questions ofAmerican constitutional law andWestern politicalthought.” The Madison program is the brainchildof Robert P. George, a grandson of West Virginiacoal miners who currently occupies the same aca-demic chair at Princeton once held by WoodrowWilson. “He’s another one of these rare intellec-tual entrepreneurs,” says Hertog of George. Oth-ers certainly share Hertog’s estimate. George hasbeen described by the New York Times as “thereigning brain of the Christian right,” and he’searned kudos from Supreme Court Justice ElenaKagan for his “sheer brilliance.”

Hertog has similar feelings for—and has givensimilar support to—Leon Kass, a medical doctor,longtime professor of social thought at the Univer-sity of Chicago, andHertog Fellow at the AmericanEnterprise Institute who has also served as the chair-man of President George W. Bush's bioethics coun-cil. “The two legs of Leon Kass are Athens andJerusalem, and what he has written has been enor-mously influential to me,” Hertog says, adding thatKass’ exegetical book on Genesis, The Beginning ofWisdom, “is probably one of the great books.”

So it is with many of the other individualscholars Hertog has supported: thinkers withthe intellect and temperament to look past thenext political corner and address fundamentalquestions about democracy, culture, and humannature itself. And Hertog has done this whileproviding not only his fortune but also his busi-ness acumen to create a network of innovativeinstitutions through which the most innovativeconservative ideas can take root.

And it’s just getting started: “As you domore of this kind of philanthropy, the morethings come to you,” Hertog says. “It’s a sup-ply-side vision of intellectual capitalism.”

“You Will Learn about Being a Jew”STILL, THAT’S NOT ALL THAT HERTOG WANTS TO

accomplish. Not by a long shot.In the late 1990s, Hertog took a phone call

from Bernstein. There was bad news: Bernsteinhad been diagnosed with the lymphoma thatwould ultimately claim his life. There was also arequest: Bernstein wanted Hertog to becomechairman of the Tikvah Fund—tikvah is Hebrewfor “hope”—a $200 million philanthropic fundestablished by Bernstein and dedicated to Jewishcauses. By then, Bernstein had changed his firstnames from Sanford Charles to Zalman Chaim,bought a home in Jerusalem, and become a veryobservant Jew. Not so Hertog.

“I told him I didn’t know enough aboutJudaism,” Hertog recalls. “He said: ‘I know theone thing in life you’re most sorry about is thatyou didn’t say Kaddish [the Jewish memorialprayer] for your mother. You will learn aboutbeing a Jew. And you will learn about under-standing religion and about how much it has con-tributed to your life. And you will honor her.’

Leon Kass guides a seminar at the Tikvah Fund’s summer school atPrinceton. “The two legs of Leon Kass are Athens and Jerusalem,”

says Hertog, “and what he has written has been enormouslyinfluential to me.” (Photo courtesy of the Tikvah Fund)



then-extant Oslo peace process, as well asHazony’s blistering attack, in his book The JewishState, on the “post-Zionist” trend in Israeli acad-emia. Since then, the quality and breadth ofShalem’s scholarship, along with the shift to thecenter-right in Israeli politics, have made its ideasdirectly relevant to every issue under debate inIsraeli intellectual life.

Shalem is very much a model Hertog philan-thropic venture: It has engaged big ideas, pro-voked debate, produced important thought lead-ers, and shifted public thinking. It has also suc-ceeded in attracting other major donors, includingcasino mogul Sheldon Adelson and investor SethKlarman, making it an increasingly self-sustainingventure. And as that has happened, Hertog hasbegun to widen Tikvah’s focus.

The challenge for “start-up” Jewish philan-thropy is that it’s a crowded field. If the cause is pro-Israel political advocacy, there’s AIPAC; if it’s poorJews in Russia, there’s the Joint Distribution Com-mittee; if it’s Jewish life on campus, there’s Hillel; ifit’s Jewish charitable work in the U.S. and Israel,there’s the Jewish Federation; if it’s the fight againstanti-Semitism, there are the Anti-Defamation Leagueand the Simon Wiesenthal Center. And so on.

Still, what Shalem was doing in Israel wasunique, and Hertog believed there was more thatcould be done. So did Eric Cohen, a 1998 WilliamsCollege graduate who had worked at the PublicInterest and thenwith LeonKass on President Bush’sBioethics Commission, whom Hertog hired in 2007to serve as Tikvah’s executive director. Hertog callsCohen “a wise old head on a young set of shoul-ders,” a description that seems apt for the endeavoras awhole. For Tikvah, evenmore so than the rest ofHertog’s philanthropic endeavors, is largely aboutputting old ideas in theminds of youngpeople for thesake of giving those ideas—and Jewish civilization ingeneral—a fresh lease on life.

Thus, in addition to the summer school inPrinceton, Tikvah funds a scholars program forteenage students at seven leading Jewish dayschools. There are Tikvah programs at the Uni-versity of Toronto, Yeshiva University, and theJewish Theological Seminary in New York.There is the Tikvah Center on Law and JewishCivilization at New York University, which aimsto explore the specifically Jewish contribution tothe general study and practice of law. Tikvahalso sponsors a summer program in politicalstudies at the Interdisciplinary Center in Her-

“What was I going to say?” Hertog contin-ues. “The guy really knew how to tug on yourheartstrings.”

For most of its history, Tikvah’s major func-tion was serving as the principal funder of theJerusalem-based Shalem Center, founded byIsraeli-American political theorist Yoram Hazonyfor the purpose of creating a center of seriousresearch and scholarship about the nature,breadth, influence, and trajectory of Jewish civi-lization. In just 16 years, it has provided an aca-demic home to the likes of historian (now ambas-sador) Michael Oren and Soviet dissident (laterIsraeli cabinet minister) Natan Sharansky; pub-lished the quarterly journal Azure (a magazine onJewish political thought); and established a schol-arly press to bring out Hebrew translations of theWestern classics that have never been publishedin Israel. It is now in the process of being accred-ited as Israel’s first true liberal-arts college.

Shalem has even sponsored a major archeo-logical dig, personally funded byHertog, that mayhave now discovered King David’s palace. “Whatwas consequential for me, besides the thrill oflooking back 3,000 years,” says Hertog, “was thewhole idea of seeing the Bible as a piece of histo-ry. Investing in archeology is like drilling for oil:There are many more dry holes than big hits. Butwhile there isn’t a sign on it, there really is a highprobability that this is, in fact, David’s palace.”

In its early years, Shalem became somethingof a lightning rod for its skepticism about the

Students discuss Jewish thought at Tikvah’s Princeton summer school.(Photo courtesy of the Tikvah Fund)


comes out of it. It has also put itself in the businessof supplying the ideas themselves through a full-spectrum media enterprise. Hertog hired formerCommentary editor Neal Kozodoy to oversee thepublication a book series on Jewish ideas about—for example—love, death, humor, justice, mercy,and human nature, and to enlist some the bestJewish public intellectuals (Hillel Halkin and Har-

vard professor Ruth Wisse among them) asauthors. And mindful of the nearer term, Tikvahnow publishes the quarterly Jewish Review ofBooks—modeled aesthetically on the New YorkReview of Books—as well as the website Jew-ishIdeasDaily.com, which offers original featurepieces, along with a daily selection of some of themost interesting (or provoking) things said ordone in (or to) the Jewish world.

Cohen and Hertog plan to broaden Tikvah’sprograms in Israel while also expanding its ties to

zliya, Israel, akin to the Hertog Political StudiesProgram in Washington but with a specificallyZionist orientation. In its first year, it took 20students out of 400 applicants.

The emphasis on the university is no acci-dent: as Cohen notes, “it is the only institutionthat every American Jew passes through. It isn’tthe [Jewish] day schools. It isn’t the syna-gogue.” What he doesn’t say, though it is plain-ly on both his and Hertog’s mind, is that Tikvahis starting to make its mark on campuses at amoment when the political situation for Jewishstudents has become increasingly fraught amidthe endless controversies over Israel and theresurgence of anti-Semitism. And while Tikvahisn’t in the business of minting pro-Israel advo-cates—plenty of other organizations do that jobwell—it is in the business of creating the nextgeneration of Jewish leadership.

“It’s about educating future Jewish leaders atthe highest level,” says Cohen. “Whether you’regoing to be a [political philosopher Leo] Strauss,a Ben Gurion, or a [Rabbi Joseph] Soloveitchik,they are all formed by ideas and at various pointsin their lives read the same books. Their intellec-tual formation matters.”

Nor has Tikvah contented itself to act simplyas a convener, bringing smart students togetherwith smart professors and hoping some good

“It’s about educating future Jewish leaders at the highest level,” says Eric Cohen of Tikvah’s programs for young Jewish scholars.“Whether you’re going to be a Strauss, a Ben Gurion, or a Soloveitchik, they are all formed by ideas and at various points in their lives

read the same books. Their intellectual formation matters.” (Photo courtesy of the Tikvah Fund)





rabbis in North America. And there will be stillmore to come: “You have to find the people youbelieve in,” says Cohen, echoing Hertog’s philan-thropic principles. “You also have to be able totack, to fail, to see that the side idea is really thebig idea.” So far, Tikvah has spent a modest por-tion of Bernstein’s inheritance. Hertog means tospend it all within the next 20 years.

Investing in Ideas“I’M AN INCREDIBLY CONVENTIONAL PERSON,”Hertog insists. He also insists that he is nobody’sidea of an intellectual, much less a “world-classthinker.” Those who know him well demur at thatmodest self-assessment. “What a lot of people don’tknow about Roger is that he reads everything” saysPodhoretz. “He reads every biography, every histo-ry, every serious work of political theory.”

What truly sets Hertog apart, however, is thedistinctive intellectual contribution he has made tothe understanding and practice of philanthropyitself. The National Endowment for the Humani-ties recognized his contributions in 2007, along-side the likes of Russian historian Richard Pipesand essayist and critic Cynthia Ozick. City Uni-versity, his alma mater, awarded him an honorarydoctor of letters two years after that.

This is not a matter of the amount of money hehas given away, though the sums are hardly trivial.Nor is it a matter of the high-quality intellectualwork his giving has made possible, or of the power-ful impact that work has had in shaping key policydebates in the United States and Israel. Nor, finally,is it a matter of Hertog’s unique methodology,which, taking its cue from the insights he gleanedover 38 years at Bernstein, treats philanthropy as acontinuation of business by other means.

Rather, what Hertog has shown is how phil-anthropy can go beyond being merely tactical—the relief of immediate want; the provision ofbricks and mortar—to become truly strategic.Paradoxically for a philanthropic enterprise thatcomes with firm sunset clauses attached, Hertog isfunding people, causes and ideas that aim, in theirvalue and effect, to be timeless.

Born to an address that no longer exists, Her-tog created a fortune and decided to give it away.By sunsetting his philanthropy, he has risked mak-ing his legacy as transitory as his birthplace. But inthe end, Hertog sees it as a risk worth taking. Heknows that what matters, what endures, is theworld of ideas. P

“As you do more of this kind of philanthropy, the more things come to you,”Hertog says. “It’s a supply-side vision of intellectual capitalism.”

(Photo courtesy of the New-York Historical Society)

The Business of - Philanthropy Roundtable

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