Who better to hustle a few silver bells out of the private sector than Mayor Bloomberg?

The New York Observer
Bloomberg’s Do-Gooder Charity
By Reid Pillifant
June 2, 2010 | 8:43 a.m.

In October of 2007, Mayor Bloomberg and Bette Midler gathered in the Bronx–“right where J-Lo comes from,” according to the mayor–to shovel some dirt around the roots of a Carolina silver bell.

A band played. There were speeches. And there was a lot of excitement about Mayor Bloomberg and his new MillionTrees initiative, which would bring public and private money to blossom on blocks all over the city.

“Yes, it’s going to be expensive,” Ms. Midler told The New York Times, “but I figure that if the 92 Fortune 500 companies based in New York City each contributed $2.2 million, or if the wealthiest 1,000 New York City-based corporations each contributed $200,000, or if the 3.7 million working New Yorkers each contributed $5 a month, or if just one hedge fund guy contributed his bonus, we’d meet our goal.”

And who better to hustle a few silver bells out of the private sector than Mayor Bloomberg?

Last month–seemingly ahead of schedule–MillionTrees stuck its 350,000th tree in the ground, thanks to a coalition of contributions from city government, the federal government, Ms. Midler’s environmental nonprofit and the mayor’s own catch-all quasi-city charity, the Mayor’s Fund to Advance New York City.

Since taking office, Mayor Bloomberg has made the Mayor’s Fund a particular priority, transforming a little-used nonprofit into a robust public-private player that has helped stem deep budget cuts in city agencies, and advanced objectively good causes like tree planting, reducing domestic violence and increasing economic literacy.

In Mr. Bloomberg’s eight years in office, the Mayor’s Fund has raised more than $150 million–for everything from portrait conservation, to eye care for underprivileged kids, to Katrina and Haitian relief efforts. But it’s tough to deny the fact that a substantial part of that money comes from people who do business, in one way or another, with the city. “It’s a really great arrangement for people making the donations, because they get to please an influential elected official and they get a tax deduction,” said Susan Lerner of Common Cause NY. “There is an increasing tendency-which is pushed very vigorously by this administration-to completely blur the lines between public and private, between profit and charity,” Ms. Lerner said.

IN 1994, IN THE opening months of his first term, Mayor Rudy Giuliani quietly established Public-Private Initiatives Inc., with a modest $36,626 in contributions and $67,616 in public money.

Under Mayor Giuliani, the blandly named nonprofit–run by the wife of the mayor’s deputy of operations–mostly worked in the background of city government. The organization gave to charitable projects like children’s funds and domestic violence centers, but it also helped chisel down the rough edges of Mayor Giuliani.

Public-Private Initiatives published the mayor’s children’s book, What Will You Be?, allowing for the predictable soft-focus photo ops; and it sponsored several events around 2000’s New Year’s celebration, which kept Mr. Giuliani in the spotlight as he eyed higher office. By 1999, critics were accusing the organization-which operated without many disclosure requirements-a “shadow government.”

Under Mayor Bloomberg, the shadowy agency would become something more like a spotlight. In 2003, he renamed it the Mayor’s Fund to Advance the City of New York–borrowing a bit of cachet from the office, and linking the fund to his own public image.

The mayor, who has sole discretion to appoint the fund’s directors, placed friends and supporters on the board to help fill the fund’s coffers. Financier Steven Rattner–the mayor’s personal money manager–was tasked with tapping the donor community; gossip columnist Liz Smith organized a lavish fund-raiser for the society set.

Around the same time, the Conflicts of Interest Board revised its guidelines for city nonprofits: City officials could pursue private donations for pet projects, as long as the donor didn’t have a “specific matter either currently pending or about to be pending before the City official or his or her agency.”

The board, in turn, required strict disclosure–a list of all donors and their donations–to be submitted every six months. Soon the fund would have a Web site and a newsletter, and later a Facebook page, further dispelling the shadowy days.

Under the new mayor, the organization’s bottom line–which had largely bounced between $1 million and $4 million dollars under Mayor Giuliani–topped $10 million, and would continue to grow from there.

Film and television producers like HBO and Disney, among many others, became regular donors to the city’s Office of Film, Theater and Broadcasting, which issues the permits–free of charge–that are required to shoot on city streets, along with promoting the industry.

Real estate interests, including the Rudin and Speyer families and the Association for a Better New York, are all consistent contributors. (Rob Speyer, the co-CEO of Tishman-Speyer and currently the chairman of the fund’s board, declined an interview request.)

Bruce Ratner, one of the board members, gave liberally–a fact occasionally noted by the press, since his controversial Atlantic Yards project was, at the same time, winding its way through the city bureaucracy. In one December 2005 flurry, three Ratner-related entities-Forest City Beekman Associates LLC; Forest City East River Associates; and Forest City Ratner LLC-together gave between $450,000 and $1 million to restore a Coney Island carousel.

“Bruce and Forest City Ratner have indeed supported the rehabilitation of that amusement, and they are guilty of thinking it will be much loved again by kids and their families,” a spokesman told The Observer in 2007.

By 2008, the Fund had become a $35 million enterprise.

“The Fund now has a proven track record of successful partnerships and has become a model for other cities,” wrote an official from the Mayor’s Fund in an email, explaining the organization’s growth. “People’s awareness of public-private partnerships–and their belief in their effectiveness–has also increased, which translates to an increase in donations.”

Of course, it doesn’t hurt that the donations polish the mayor’s image. Ms. Lerner compares the fund’s donor list to a campaign committee. “Whether you’re a billionaire or a pauper, you feel more warmly toward the people who agree with you than you do with the people who fight with you,” she said.

Yet with such a staggeringly wealthy mayor, it’s unclear exactly what a donation nets in terms of goodwill. “In many administrations, money can be a factor. In this administration, that’s not the case,” said the political consultant George Arzt, who noted that many of the big donors to the Mayor’s Fund are, in fact, the mayor’s longtime friends. “This isn’t a case where you can say that I’ve just given $20,000 and someone has set up an appointment with the mayor or the deputy mayor. You just never hear that.”

THE GROWTH OF the Mayor’s Fund has given Mr. Bloomberg a side stash from which he can be the entrepreneurial mayor he seems to envision for himself–using the city as a laboratory for experiments in governance.

In 2007, the Mayor’s Fund collected donations from a variety of foundations for an ambitious program called Family Rewards–the first program in the country to pay parents for attending parent-teacher conferences, taking their children to the dentist and other desirable behaviors.

It was the kind of project unlikely to get past a cash-strapped City Council, and it ended earlier this year when it wasn’t producing the desired results.

“After 9/11, when people asked the City what they could do to help, the Mayor was ready with an answer: help us do things that the City’s budget can’t afford,” emailed Jason Post, a spokesman for the mayor. “And one reason we got so much done over the last eight years is because we’re constantly taking new approaches to old problems – some things we’re trying are just too risky to use taxpayer dollars, especially when budgets are tight. We use private money when we push the public policy envelope furthest,” he wrote, adding that the success with private money can then be made permanent in the city budget.

But the reliance on the private sector could have its own problems.

“We should be demanding creativity and responsiveness from our government, not throwing up our hands and saying, ‘Well, we’ll create this private pool of money that the mayor will have sole discretion over, not answerable to anybody about how he uses it,'” said Ms. Lerner of Common Cause, who wondered how the next mayor–presumably not a billionaire–might deal with the discretionary fund. “Yeah, it’s more difficult to do things when the full glare of public light is on you. That’s the requirement of having a public democracy. And so these increasingly clever ideas to beat the participatory system are of great concern.”

Ed Koch, former mayor and onetime donor to the fund’s Hurricane Katrina relief efforts, disagreed.

“It’s O.K. to waste his $40 million, or the $40 million of someone who wants to waste it in a charitable way. It’s much harder to waste the city’s $40 million. So he did the right thing,” Mr. Koch said.

“If I’d had a pot like this, I would have used it for initiatives just as he has. But we didn’t. In retrospect, we should’ve.”

rpillifant@observer.com