Europe’s Andrew Carnegie

Scottish billionaire carves out a philanthropic legacy

When Scotland’s richest man, Tom Hunter, made his first major charitable commitment — $100-million to

help sub-Saharan Africa in 2005 — he said philanthropy was better than “any buzz I’ve gotten from any business deal.”

Today, Mr. Hunter is still hooked.

Last summer, the 46-year-old retail-clothing entrepreneur and his wife, Marion, promised to give 1 billion pounds, roughly $2-billion, to education and humanitarian causes.

The pledge is believed to be the largest in British history, and the Hunters are credited with helping to lead a revival in giving by wealthy residents of Britain.

“He’s a role model for Europe,” says Vartan Gregorian, the president of the Carnegie Corporation of New York and a trustee of Mr. Hunter’s charitable fund.

Indeed, Mr. Hunter hopes to follow in the footsteps of his fellow Scotsman, Andrew Carnegie, the rich steel maker who helped define modern philanthropy and established venerable nonprofit institutions on both sides of the Atlantic.

But Mr. Hunter’s ambitious donation is no sure bet. His personal fortune, worth about $2.1-billion, is tied to the investments made by his private-equity company, West Coast Capital.

Mr. Hunter admits that he could fall short of his $2-billion pledge. Since he made the promise in July, he says with a smile, the “markets have gone to pot.”

He still expects to fulfill his promise and so far has donated at least $150-million to charitable causes. Yet the risk of failure is what makes the gambit exciting.

“I’ve always been driven by the challenge,” he says in his strong Scottish brogue. “I felt if I made the pledge public, I had no room to hide. We said, Let’s roll the dice, put the challenge up there, and have to keep the score.”

A Grocer’s Son

Mr. Hunter is Scotland’s first homegrown billionaire. But he has an informal manner that belies his wealth.

During an interview here at his company’s offices, Mr. Hunter carries a visitor’s coffee cup for him, his employees call him by his first name, and he displays a self-deprecating sense of humor. His foundation’s annual report, for instance, includes a photo of Mr. Hunter, who is bald, as a child with the caption, “Tom as a swotty pupil with hair.”

He and his wife, who declined to be interviewed for this article, have three teenage children. The offspring will receive a small portion of the couple’s fortune, but not so much that they will be spoiled, Mr. Hunter says.

“They’ve always been brought up knowing that great wealth is not going to be left to them,” he says. They know life “is not all about lovely homes, planes, and yachts.”

While still working full time at his investment company, Mr. Hunter says he tries to spend about half of his time on philanthropy.

Today Mr. Hunter is known as a passionate advocate for charity work, but he was not always this way. He says that in his 20s and most of his 30s he was consumed with building his clothing business and barely made any donations.

A grocer’s son, Mr. Hunter grew up in a working-class household, and his career had a humble starts — selling athletic shoes from the back of a van. But over time he expanded his operations into Sports Division, a retail chain that he sold to JJB Sports in 1998 for about $410-million.

Yet while he had achieved his dream of financial success, Mr. Hunter felt lost after the sale.

“I was 37 years old with a very large sum of money in the bank and nothing to do,” he says. “Purpose had disappeared overnight, replaced with a big check.”

Not wanting to retire or relax at the beach — “I couldn’t think of anything worse,” he groans — Mr. Hunter set out to expand his “myopic” vision of the world.

As part of this, he began to explore the life of Carnegie.

He visited Skibo Castle, the Carnegie estate in the Highlands of Scotland, and read the industrialist’s book, The Gospel of Wealth, which espouses that a man who dies with his fortune intact dies “disgraced.”

The words had an effect.

“To find out he was a man born in Scotland, became the world’s richest man, invested in the world’s common good — this began to resonate with me,” says Mr. Hunter, who has a framed photo of Mr. Carnegie’s bearded visage behind his desk.

The curiosity with all things Carnegie led Mr. Hunter to knock on the door of Mr. Gregorian at the Carnegie Corporation.

“He said, ‘What do I do to learn about philanthropy?’” recalls Mr. Gregorian about the meeting, which happened in his office in Manhattan about eight years ago. “His mind was churning, his soul was searching.”

Mr. Gregorian told the Scotsman about Mr. Carnegie’s views on capitalism and society, not all of which were easy to swallow.

“When he told me it wasn’t actually my money, it was just in trust for the common good, that was a bit of a challenge,” Mr. Hunter says.

After that fateful discussion, the Hunters become more serious about the work of their eponymous foundation.

The foundation, which was established in 1998, primarily supports two causes: education in Scotland and humanitarian work in Africa.

In the couple’s homeland, the focus has been on preparing children for a future when the region’s traditional industries — shipbuilding, steel making, and coal mining — no longer exist.

Mr. Hunter, who grew up in New Cumnock, a mining town about 40 miles south of Glasgow, says he saw his community “ripped apart” when the mines closed. To ameliorate such problems, the Hunter Foundation has worked closely with the Scottish Executive, the country’s government, to improve Scotland’s public-school system.

Adding ‘Grit’

The relationship with the government hasn’t always been a smooth one. The Hunter Foundation stopped a $2-million grant in 2005 because it said the government was dragging its feet on committing to a program.

But the partnership has been beneficial, says Michael Cross, a deputy director of education in the Scottish government. The Hunter Foundation brings “intellectual energy and a different network of contacts,” says Mr. Cross. “What it has done is push the public sector and be grit in the system.”

For example, the Hunters gave $4-million in 2003 to help Scotland develop “enterprise education,” which seeks to instill entrepreneurial spirit and emphasizes teaching children math and other subjects through real-life business scenarios.

While the money was beneficial, Mr. Cross says Mr. Hunter was most helpful in fostering relationships between Scottish companies and schools. According to a report published this year by the Scottish Executive, in the 2005 school year 200,000 students participated in lessons with local businesses.

Although he is pleased with the strides, Mr. Hunter is quick to say he knows he is no expert in education.

“People may argue, What does he know about education? He sold shoes. I say, fine. You’re absolutely right. But I tell you what: I know a man or a woman who knows a bit about the subject, and they’re the best in the world,” he says.

He points out that the foundation has drawn on the education expertise of the Carnegie Corporation to develop efforts to train teachers.

Clinton Connection

Mr. Hunter has taken a similar approach in Africa, where he has teamed up with someone knowledgeable about the continent’s struggles: Bill Clinton.

Several years ago, Mr. Hunter met the former president in London at a fund-raising dinner for the William J. Clinton Foundation.

During the dinner, Mr. Clinton persuaded Mr. Hunter to join him on a trip to South Africa, Mozambique, and other parts of Africa, which the Scotsman describes as another eye-opening part of his philanthropy education.

In 2006 the two philanthropists formed the Clinton-Hunter Development Initiative with the $100-million gift that Mr. Hunter called buzz-worthy.

The project assists Malawi and Rwanda with a range of needs — building rural hospitals, improving sanitation and access to clean water at schools and medical facilities, and providing fertilizer to farmers and helping them find markets for their products.

“Unless you tackle the whole of the problem, rather than part of the problem, ultimately you’re not going to get anywhere,” says Ewan Hunter, the chief executive and sole employee of the Hunter Foundation. (He is not related to Tom and Marion Hunter.) The foundation executive, who is also head of corporate communications for West Coast Capital, had no previous experience in philanthropy before joining the Hunter fund. But he previously worked in Africa for the oil and gas industry, giving him knowledge of the continent.

Tom Hunter emphasizes that he considers his contributions to Africa and elsewhere as “investments” and expects to see results from his giving.

“We don’t just give it away, wave it goodbye, and never check up on it,” he says.

Approximately 3 percent to 5 percent of the budget for each humanitarian project is directed toward evaluation, according to the Hunter Foundation’s annual report.

Such a businesslike approach is a relatively new concept in Britain. Donors here traditionally have preferred to follow the Victorian-era model of hands-off giving and donating anonymously, says Salvatore LaSpada, chief executive of the Institute for Philanthropy, a nonprofit consulting group in London.

Donors are now asking, “‘How can we tug on the strings of the marketplace to also produce social benefit?’ This is very forward thinking, very new here,” he says.

Mr. Hunter, the Scottish oil tycoon Ian Wood, the hedge-fund manager Christopher Hohn, and other wealthy British entrepreneurs are championing a “resurgence” in British giving, he says.

(To be sure, the attention on philanthropy here has yet to spur giving by people of more modest means. According to a report, released last month by the Charities Aid Foundation and the National Council for Voluntary Organisations, 54 percent of people surveyed said they gave to charity last year, a 3-percentage-point decline from 2006.)

High Profile

Mr. Hunter’s style of giving does have its detractors, who say he is too eager to seek the spotlight.

For example, he announced his $100-million Africa gift on a Manhattan stage with Bill Clinton at his side. And in 2006, he befriended the Irish musician Bob Geldof and the movie director Richard Curtis after he backed their efforts to raise publicity about global poverty.

Such high-profile displays of generosity, his critics argue, signal that Mr. Hunter is trying to make up for past sins, specifically the selling of his company in 1998, which led to a loss of some 500 jobs. An unnamed British businessman last year told The Independent, a newspaper in London, that Mr. Hunter was “buying his stairway to heaven.”

Mr. Hunter rejects such attacks. He says he has been very public about his giving to inspire others to be more philanthropic.

He wants Britons to know “we did this; it’s fantastic. We’re having the time of our lives. Try it.”

Indeed, Mr. Hunter emphasizes that despite whatever pleasure there may be in the high-rolling world of finance and business, charity has a lot more to offer.

When asked if he and his wife may consider endowing their foundation so it can operate after their deaths, he says no, philanthropy is too much fun.

“The thought of working and then leaving a large pot of money for someone else to have that fun, well, I couldn’t think of anything worse,” he says with a smile.

“In business, the goal is money, and you get a pot of money at the end of it. That’s great,” he says. “But when you do a project in education or health care — and it actually works — it’s the best feeling in the world.”