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                   Imprimis, On Line  -- June, 1993
        
        Imprimis, meaning "in the first place," is a free
        monthly publication of Hillsdale College (circulation
        435,000 worldwide). Hillsdale College is a liberal arts
        institution known for its defense of free market
        principles and Western culture and its nearly 150-year
        refusal to accept federal funds. Imprimis publishes
        lectures by such well-known figures as Ronald Reagan,
        Jeane Kirkpatrick, Tom Wolfe, Charlton Heston, and many
        more. Permission to reprint is hereby granted, provided
        credit is given to Hillsdale College. Copyright 1992.
        For more information on free print subscriptions or
        back issues, call 1-800-437-2268, or 1-517-439-1524,
        ext. 2319.
        
             ---------------------------------------------
        
         Making a Difference: Three Business Leaders Speak Out
        
             ---------------------------------------------
        
                          Volume 22, Number 6
              Hillsdale College, Hillsdale, Michigan 49242
                               June 1993
        
             ---------------------------------------------
        
                          "Helping to Educate"
                          by Peter M. Flanigan
                      Director, Dillon, Read & Co.
        
        About eight years ago I was commuting from a
        comfortable office in midtown Manhattan to a
        comfortable home in the suburbs and that took me,
        daily, through Harlem and the South Bronx. Looking out
        the window and seeing the deplorable conditions in
        which children were being raised, I could not help but
        feeling that we, and our democratic society, were
        failing them. My wife and I talked about it and said,
        "Well, what can we do?"
        
             We had heard about Gene Lang, a New York
        businessman who went back to his school in Harlem to
        give a graduation speech before the sixth graders, who
        were all black or Hispanic. His speech began, "Your
        future is limitless, the skies are bright," but he knew
        that this wasn't true. He tore up the rest of his
        speech and said, "The only way you can experience your
        dream is to graduate from high school and then from
        college. The odds are you won't do that, but I'll tell
        you what: If any of you graduate from high school and
        can get into college, I will see to it that your
        tuition is paid." This was the beginning of a marvelous
        organization called the "I Have a Dream" Foundation.
        
             My wife and I agreed to join Lang's efforts. That
        spring, I spoke to a graduating class of 50 sixth
        graders in the South Bronx and made them the same
        promise: "You graduate from high school, and I'll see
        that you can go to college." The class was excited--for
        about two weeks, then interest waned. We hired a social
        worker and arranged for tutoring. We worked for six
        years with the 50 students that we "adopted." When the
        class finished the 12th grade in June 1992, only seven
        enrolled in college. Five or six more may decide to
        enroll. Considering all the time and resources that we
        dedicated to this project, getting only 12 or 13 out of
        50 students into college seems a waste.
        
             It isn't enough to want to do good. You have to
        determine what it is that you can do and then you will
        be successful. Why weren't we making a dent in these
        kids' attitudes? Why weren't we able to improve their
        grades? Why weren't we getting more of them to stay in
        school? We couldn't change their home lives, we
        couldn't change their neighborhoods, and we couldn't
        even change their schools. If we could have changed
        their schools we would have had a much greater chance
        of succeeding.
        
             There are two parallel school systems in New York
        City. The public school system enrolls 960,000
        students. It involves a huge bureaucracy, with some
        5,000 administrators outside the schools themselves. As
        of the early 1990s, it was costing $6,000 yearly to put
        a student through grammar school and $7,600 to put him
        through high school.
        
             Now, the public system has some very good schools,
        even a few of national renown. But most students must
        go to what are known as "zoned schools." There is no
        freedom to choose. A student must attend the zoned
        school to which he is assigned. Despite the millions of
        dollars that have been poured into them, zoned schools
        have a notoriously poor record of performance. Only 25
        percent of all students in zoned New York inner-city
        schools graduate. According to the Rand Corporation,
        four years after entering high school about 15 percent
        take the SATs. Although these represent the best
        students, their average score is 604 combined. (You can
        score 400 just by signing your name twice.)
        
             By contrast, the New York City private school
        system has 145,000 students and only 35 outside
        administrators. The average annual cost in recent years
        has been about $1,900 in grammar school and $3,200 in
        high school. The same Rand study says that of students
        comparable to those in zoned inner-city public high
        schools 70 percent take the SATS and have average
        scores of 802. Clearly, if you can change the inner-
        city students' schools you can change their lives.
        
             If we are trying to save kids who need an
        education and they are in a system that doesn't
        educate, our efforts will fail, plain and simple. The
        answer to this dilemma is equally simple: Let's take
        students out of the schools that don't teach and put
        them into the schools that do teach. Six years ago, we
        decided to do just that. I approached the fellow in the
        office next to mine and said, "If you could change a
        student's odds of success from one in eight to seven in
        eight, would you do it?" He said, "How?" I replied,
        "Pay his private school tuition for four years and
        spend some time with him." The response was, "Lead me
        to him." We went down to the next office and made the
        same pitch, and so on. There are now 637 sponsors for
        637 students in New York City private schools. Seventy
        percent graduate from private schools and virtually all
        enroll in college.
        
             Who are these 637 sponsors? They are mostly young,
        fast-track attorneys or executives in the investment
        and commercial banking community. In this sense, they
        are like the protagonist in that wonderful satire,
        Bonfire of the Vanities by Tom Wolfe. But unlike
        Sherman McCoy, the "Master of the Universe" who had
        infinite courage on the trading desk but was scared to
        death to get off the freeway in the South Bronx, our
        637 sponsors go into the South Bronx all the time. They
        are the ones, contrary to all the media stereotypes
        about "rich yuppies" and "greedy businessmen," who are
        working hand in hand with schools to help hundreds of
        inner-city students get an education.
        
             The key to the success of this effort is that
        everyone involved chooses to participate. For human
        creativity to flourish, it must be unfettered. Free
        individuals will do things that constrained individuals
        will never do. In the schools that are most successful,
        the principal chooses to be there and he chooses the
        way in which the school is organized. He chooses the
        teachers, and the teachers choose him. Together, they
        choose a curriculum. And then students and parents
        choose the school. Everybody buys into that single
        educational enterprise.
        
             But this is not how most of the schools in our
        public system are organized. A principal, largely based
        on his length of tenure, is appointed. He is given a
        very strict set of guidelines of what and how to teach:
        say, 22.5 hours of English, 17.5 hours of math, driving
        instruction, sex education, hygiene, etc., and he may
        not vary the schedule. Teachers are assigned from the
        central pool. Even if they are incompetent, they are
        paid the same as other teachers and largely are
        protected from being fired or disciplined. Hordes of
        outside administrators and hundreds of regulations
        dictate what all teachers must and must not do in the
        classroom-- they have almost no discretion. And then
        students are assigned to schools, regardless of whether
        they want to go. Finally, taxpayers are forced to pour
        more and more assets and resources into the system in
        the vain hope that more money will make it work.
        
             American public education is organized exactly
        like Soviet agriculture was organized. It is a
        bureaucratic, top-heavy system with every decision
        directed from above. In every other walk of life we
        choose how we will spend our resources and where we
        will go to purchase services. Only in the first 12
        years of public education are we denied freedom of
        choice.
        
             That is why voluntarism and private philanthropy
        are so vital in America. We need to ensure that more
        students can choose their schools and more schools can
        choose to succeed in their own way. There is no
        shortage of individuals who are willing to make
        financial contributions or to get out there and put
        their shoulders to the wheel. Help them do it; show
        them how they can get involved and they will join you
        enthusiastically and support your effort. Stay away
        from bureaucracy. Be patient; don't hurry and the
        rewards will be extraordinary. When I get a little blue
        or discouraged, I go to a little school at 110th Street
        called St. Ann's. After spending time with the 300
        inner-city minority students enrolled there, invariably
        I come away excited and uplifted. Or I attend a high
        school graduation and look at the face of a sponsor who
        is there to see his "adopted" student graduate. He or
        she is thinking, "That child is getting his diploma
        because of what I've done. I made a difference." i
        
             ---------------------------------------------
        
        
                   "In Search of National Principles"
                           by Robert J. Mylod
                      Chairman, President and CEO,
                     Michigan National Corporation
                       and Michigan National Bank
        
        When one ponders how major institutions in our society
        such as government, education, business and culture
        have evolved in the last 200 years, it seems clear that
        they have negatively affected our national principles,
        particularly the principles that govern how we respond
        to contemporary social problems.
        
             Look at government. The clear, inexorable drift of
        the political process has been toward increasing
        government intrusion. In 1982, when the Grace
        Commission issued its landmark report on government
        spending, the national debt stood at roughly $1
        trillion. The Commission predicted that, without a
        change in political will, the debt would grow to some
        $4 trillion by 1992 and to $14 trillion by the year
        2000. That forecast is chillingly accurate so far.
        Today's national debt stands at over $4 trillion. Since
        the early 1960s, annual outlays for "entitlements,"
        i.e., mandatory government spending programs, have
        grown from about $30 billion to about $700 billion. And
        we have increasingly looked off shore to finance this
        policy. Foreign sources now hold about 12 percent of
        our national debt. If this trend continues, we run the
        risk of losing control of our domestic policy, which
        might not be such a bad idea, but is hardly an
        impressive problem-solving technique.
        
             What about the social impact of this massive
        public investment on the nation's poor, the group it
        was primarily designed to help? Statistics indicate
        that poor Americans are actually better housed (38
        percent own their own home), better fed, and own more
        personal property (some 62 percent, for example, own
        their own car) than average U.S. citizens throughout
        most of this century. But a spiritual and cultural
        impoverishment has emerged that outweighs the economic
        progress we have achieved.
        
             For example, 86 percent of poor families are
        headed by adults who don't work full-time, suggesting a
        pattern of dependency. Sixty percent, moreover, are
        headed by single women, many of whom are encouraged by
        unintended government financial incentives to dissolve
        family unity. The illegitimate birthrate has soared 65
        percent in our nation's capitol alone. Crime,
        particularly violent crime driven by substance abuse,
        has exploded and has disproportionately savaged poor
        families. The national principles that undergird a
        functional, productive life seem to be fast
        disappearing, notwithstanding this flood of federal and
        state assistance.
        
             Education, like government, appears to have hurt
        more than helped. It has not only failed to impart
        basic academic skills (SAT scores have plummeted since
        1965), but it seems to teach students that their "self
        esteem" is more important than their skills, and that
        situational ethics and moral relativism are required in
        dealing with life's dilemmas.
        
             It's no surprise that in a recent nationwide poll
        of nearly 7,000 students, 61 percent of those in high
        school and 31 percent of those in college admitted to
        cheating on one or more exams. And, after completing
        the written survey, about 35 percent of the students
        also confessed that they did not answer all the
        questions truthfully! Nor is it a surprise that
        according to the National School Safety Center, nearly
        three million violent crimes and thefts occur on school
        campuses annually, 12 percent involving a weapon.
        Substance abuse and sexual promiscuity have
        skyrocketed. Since 1970, unwed pregnancies are up 87
        percent among 18- and 19-year-olds.
        
             How does business fit into this ethical equation?
        The free enterprise system has produced the largest,
        most powerful economic engine that the world has ever
        known. It has consistently, although cyclically,
        created increasing wealth and, in so doing, lifted the
        standard of living for all the nation's citizens.
        Success has been fashioned out of risk, capital,
        innovation, energy, intelligence, and national
        principles like hard work, responsibility, and simple
        fairness.
        
             But, unfortunately, not all businesses subscribe
        to these principles. In the last year, two major
        publicly-held corporations have been financially
        decimated by disclosures  that their senior managers
        grossly overstated inventories. And the country is
        still suffering from the near collapse of the savings
        and loan industry, which will ultimately cost taxpayers
        more than $100 billion.
        
             How about the entertainment industry? Detroit News
        writer George Cantor had an extraordinarily insightful
        column recently on this topic. He was describing how
        Barbra Streisand sang about children, parents and
        values at the inauguration festivities for President
        Clinton. Cantor wrote, "But it is a little unnerving
        hearing this lesson being preached by a member of the
        entertainment community. It would be hard to cite
        another segment of American life that has been more
        corrosive in values, more undermining of parental
        authority, than show business. In its virtual non-stop
        celebration of sex without love, violent behavior,
        contempt for religion, hatred of country, adultery--the
        industry stands alone as a source of concern for
        parents who care about what their children listen to
        and see."
        
             He concluded by advising the show biz crowd to
        clean up its own act before lecturing the rest of the
        country: "Children will listen, children will see." He
        was right. In an era when the incidence of sexually
        transmitted disease, teenage pregnancy, violence,
        greed, fraud, and countless other forms of self-
        indulgence are rapidly growing, it is disappointing in
        the extreme to watch them continuously and relentlessly
        extolled by the entertainment industry.
        
              What does the church have to say? The signals are
        diverse, but an increasing chorus calls for the
        redistribution of national wealth. Those with problems,
        like the poor, are regarded as blameless victims who
        must be cared for by government. They lack
        responsibility for their actions, so there is no
        question of guilt or accountability.
        
             Less focus seems to be placed on living a virtuous
        life. Church leaders are particularly important in
        defining these principles. The great French observer of
        the American scene, Alexis de Tocqueville, in summing
        up America's strength once said, "I searched for
        America's greatness in her matchless Constitution, and
        it was not there. I searched for America's greatness in
        her halls of Congress, and it was not there. I searched
        for America's greatness in her rich and fertile fields
        and teeming potential, and it was not there. It was not
        until I went into the heartlands of America and into
        her churches and met the American people that I
        discovered what it is that makes America great. America
        is great because America is good; and if America ever
        ceases to be good, America will cease to be great."
        
             The ultimate challenge is to recover our national
        principles, as we continue to participate in our major
        institutions. Each is subject in some way to our
        influence--the government by voters, schools by
        parents, business and entertainment by consumers, and
        churches by their congregations. We should support and
        encourage the fundamental goodness among our people
        that is the linchpin of all institutions. In
        particular, the more we promote voluntary action, the
        more this goodness flourishes.
        
             Here's a specific list of ways to start this
        recovery, and, of course, it means starting with
        ourselves:
        
         Each of us should write a script for our life. As we
        do so, we should answer the question, "What purpose
        will I pursue in my life?"
        
         Once the script is written, we should live it.
        Aristotle said, "We are what we repeatedly do.
        Excellence, then, is not an act, but a habit." The same
        is doubly true for character. We should be a powerful
        example for the people around us, for, as the Bible
        says, "We are the light of the world."
        
         We should aggressively participate in articulating
        the principles and agendas of the major institutions of
        our country. Concepts like responsibility, integrity,
        honesty, fairness, empathy, commitment, self-control,
        love, and generosity should be embedded in these.
        
         We should seek leadership that embraces these
        principles; we should abandon leadership that doesn't.
        We should hold leaders to standards in their personal
        lives as well as their public lives.
        
         As we move into our own leadership roles, we should
        surround ourselves with those who share these
        principles and encourage them to articulate and
        "export" them.
        
        
             ---------------------------------------------
        
                 "The Meaning of Corporate Stewardship"
                          by Jeffrey H. Coors
                      President, ACX Technologies
        
        Throughout history, most of the world has thought of
        giving and self-sacrifice as a means of earning
        something in return. But the Judeo- Christian tradition
        views giving and self-sacrifice as a voluntary
        reflection of God's benevolent nature in whose image we
        were created. Giving of ourselves and our resources is
        being what we were created to be.
        
             Millions of Americans believe this to be true. We
        are the most giving nation on earth. There is no
        tradition of benevolence that can compare in Asia,
        Latin America, Africa, or even Europe. Nowhere in the
        world is there a United Way or a Cancer Society like
        ours. No other nation supports missionaries to the same
        extent, and none can compare with America in support
        for private, independent education. In many countries,
        congregations do not even pass the offering plate.
        Mandatory church taxes pay for everything, from the
        priest, the organist, the choir, and the ushers to the
        heat, water, and electricity. They are the most
        lifeless churches you have ever entered.
        
             When everything is taken care of by government,
        the spirit of voluntary commitment is lost. In
        contrast, it is our Judeo-Christian heritage that has
        inspired our giving. Americans donate about $100
        billion to charity each year, mostly in the form of
        individual contributions. Remarkably, poor Americans
        give a higher percentage of their incomes than do their
        more affluent neighbors. Corporate America currently
        gives $5 billion, or five percent, of all charitable
        giving each year. This is a relatively new source of
        philanthropy, begun during World War I, when
        corporations were urged to declare "Red Cross
        Dividends." These were paid with after-tax dollars;
        they were not considered legitimate business expenses
        by the IRS. Nonetheless, many businesses went along.
        During the Depression, other charities like Community
        Chest and United Way adopted the idea. But not until
        1936 did the IRS declare that a charitable contribution
        could be a deductible business expense, and even then
        it had to directly benefit the business. This ruling
        actually allowed management to circumvent shareholders
        in making the decision to contribute. Then in 1953 a
        gift to Princeton University triggered a court battle
        that led the IRS to allow gifts to any organization
        without regard to the best interests of the business.
        The only limit, which is still in effect today,
        stipulated that gifts must be no more than five percent
        of a corporation's pre-tax earnings. Very few
        corporations give the maximum.
        
             There are plenty of people who will tell you that
        five percent is not enough. But we ought not ask
        whether the corporate community "does its fair share."
        We ought, rather, to ask: "What is corporate
        responsibility?" This is a question that goes to the
        nature of business itself. Very simply, a business
        sells goods and/or services to people who want them. By
        law, a business corporation is authorized to act in
        place of a person, even though it may be owned by many.
        The profits belong to all who invest in expectation of
        earning a return, so shouldn't the profits of a
        corporation be reserved for the benefit of the owners?
        
             Of course, the owners have a duty and obligation
        to consider how they will dispose of their profits. The
        matter is simple in a proprietorship or partnership
        with a small number of owners: The parties may meet and
        choose to give to worthy causes. It gets more
        complicated in the case of a so-called public company,
        which may have thousands of shareholders. How can all
        be consulted on disposition of the profits? I think the
        solution is very simple: pay out the profits as
        dividends and let the owners decide what to do with the
        money.
        
             But in recent years corporations have learned from
        politicians to become very skilled at giving away other
        people's money while making themselves feel good about
        it. Many arguments are raised to justify corporate
        giving. One of them is genuine altruism. People are
        moved by pure motives to contribute, and that is
        commendable. A second argument is that the needs are so
        great that they require corporate rather than
        individual resources. A third justification is that
        giving creates goodwill in the community. This view is
        based on the idea that it is important for corporations
        to be good citizens and to contribute to the community.
        (It sounds appealing until one realizes that it is
        possible to give back to the community simply by
        lowering prices.)
        
             The current buzzword in corporate giving is
        "enlightened self-interest." If you make the world a
        better place, people will buy more of what you have to
        sell. Enlightened self-interest also creates good
        public relations. Whole textbooks have been written on
        this kind of "cause-related marketing." Huge P.R.
        departments create photo opportunities for corporate
        heads to shake hands with the leaders of local
        charities and to hand them checks. The results of this
        kind of philanthropy are measured by the good it does
        for the company, not the good it does for the
        recipient.
        
             There is also a great deal of peer pressure to
        conform in the corporate world. If a worthy cause is in
        need and most of the community is giving to that
        organization, a company becomes conspicuous by its
        absence. And corporate philanthropy can help avoid
        trouble. Dozens of special interest groups routinely
        target corporations and issue the threat of a boycott
        in order to secure contributions. Often these
        contributions are in reality just like "protection
        money" businesses are forced to pay to the underworld.
        
             Corporate philanthropy has also funded hundreds of
        legitimate causes meant to solve our nation's problems.
        But the poor seem to get poorer, the plight of the
        inner city has grown, and many citizens have become
        more and more dependent upon the federal government.
        Corporate philanthropy has helped foster that
        dependence. In the Capital Research Center's Patterns
        of Corporate Philanthropy the philanthropic
        contributions of the top 250 corporations in the
        country are graded. Gifts to a conservative
        organizations merit an "A." Contributions to a non-
        ideological group are awarded a "C," while benefactions
        to leftist/liberal causes earn a "D" or an "F." The
        scores for each company are then averaged. Since the
        book was first published in 1986, there has not been a
        single top corporation with a record of giving that
        deserved an "A" rating. Only 13 percent in the last
        study had a "B"; 24 percent had a "C"; 52 percent had a
        "D"; 11 percent had an "F." I question the motives and
        values of companies that give shareholder profits to
        organizations that encourage further dependency on
        government. Is this "enlightened self-interest"?
        
             It is also clear that corporate philanthropy has
        been a poor substitute for personal philanthropy. It
        has not only been widely perverted by businesses and
        special interest groups, but it has not been very
        effective in addressing the problems it seeks to solve.
        In this context, it is more important than ever that we
        develop guidelines for personal philanthropy.
        
             Here are the guidelines I would suggest:
        
        (1) Giving is an individual opportunity to reflect the
        benevolent nature of a loving God. Give so that you
        might become the person you were created to be.
        
        (2) Support people and causes with which you are
        personally involved. Give more than just money to those
        you are helping; stand with them and help them
        personally.
        
        (3) The Bible says that the measure you use to give,
        whether large or small, will be used to measure what is
        given back to you. It is important to consider the
        biblical tithe as an appropriate standard. It does not
        have to be 10 percent, but it should be a specific
        amount you set aside as soon as you receive your
        paycheck.
        
        (4) Do not wait until you are established in the world;
        you will never be established in the world. You will
        never reach a point at which you have "arrived" and can
        begin giving.
        
        (5) Give privately, not seeking recognition for your
        work; it is for others' benefit, not your own, that you
        are giving.
        
        (6) Be a cheerful giver. The joy of helping others far
        exceeds the joy of helping yourself.
        
        
             ---------------------------------------------
        
        Peter M. Flanigan is a director of Dillon, Read & Co.,
        a New York-based international investment banking firm.
        A Navy carrier pilot, he joined the firm shortly after
        his World War II duty, leaving temporarily to serve as
        an economic analyst for the Economic Reconstruction
        Administration in the United Kingdom, as a special
        assistant to President Nixon and as director of his
        Council of International Economic Policy. Currently, he
        is a director of the Anheuser-Busch Companies, Inc.,
        and the Budd Company and is a member of the advisory
        board of Advanced Technology Ventures. He is also
        founder of the Student/Sponsor Partnership and a board
        or committee member of such organizations as the
        Manhattan Institute, the Portmouth Abbey School, the
        John M. Olin Foundation, the Richard M. Nixon Library,
        and the National Parks Foundation.
             ---------------------------------------------
        
        Robert J. Mylod is chairman, president and chief
        executive officer of Michigan National Corporation and
        Michigan National Bank. He joined the corporation in
        1985, after serving for a number of years as the head
        of the Federal National Mortgage Association in
        Washington, D.C. and the Advance Mortgage Company in
        Michigan, and as vice president of Citicorp in New
        York. A Navy veteran, he is a director of VISA U.S.A.,
        Inc., and a trustee of the Henry Ford Health System,
        Detroit's Cornerstone Schools, and the Citizens
        Research Council of Michigan. He also holds
        directorships with the Detroit Symphony, the Economic
        Club of Detroit, the United Way and Detroit
        Renaissance. In addition, he is a member of the
        executive committee for the United Negro College Fund
        and an honorary member of National Volunteer Week.
             ---------------------------------------------
        
        A Hillsdale College trustee since 1985 and a current
        Hillsdale parent, Jeffrey H. Coors is president of ACX
        Technologies, a publicly traded industrial products
        manufacturing business in the fields of industrial
        ceramics, paper packaging and aluminum container sheet.
        As a chemical engineer with a strong interest in
        technology, his career focused on developing these
        businesses under the Adolph Coors Company prior to
        their spin-off as ACX in 1992. His many civic
        responsibilities include service on the boards of such
        organizations as the Denver Museum of Natural History,
        the Adolph Coors Foundation, the Colorado Leadership
        Forum, the Free Congress Foundation, and the Colorado
        Association of Commerce and Industry. He also chairs
        Hillsdale College's FreedomQuest sesquicentennial
        campaign.
                                  ###
        
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