“Going Public” On Wall Street

At the start of the 20th century, the U.S. economy had been shaken to its core by stock market collapses and credit crunches. But 1909 would turn out to be a propitious year.

Four New Yorkers of great distinction in their fields-Edward C. Henderson, Jacob H. Schiff, Isaac Seligman, and Paul M. Warburg-gathered on April 5 at 2:30 in the afternoon in an office at 52 William Street in Manhattan. Determined to make a difference in the lives of people not as fortunate as themselves, they got down to the business of creating one of the first foundations in the United States. Only a handful had existed prior to that time-three established by Andrew Carnegie, who believed it was the height of immorality for a man to die rich; the Baron de Hirsch Fund, founded in 1891; the Association for the Aid of Crippled Children, in 1900; the Milbank Fund, in 1905; and the Russell Sage Foundation, in 1907.

At the April 5 meeting, the four citizens adopted a charter and bylaws, elected a chairman (Schiff) and a president (Morris Loeb, a New York University professor of chemistry), and appointed other officers. They wrote a charter later enacted by the state legislature and signed by the governor, creating the New York Foundation.

The founders of the New York Foundation had come together as a result of the unexpected death at age 49, of Louis A. Heinsheimer, a partner at Kuhn, Loeb & Co., a banking firm founded in 1867. In his will, he bequeathed $1 million to the Jewish charities of New York, but only if they would federate within a year of his death. When they chose not to federate, the bequest reverted to his brother, Alfred M. Heinsheimer, who formed the New York Foundation.

Three of its founders-Schiff, Seligman, and Warburg-were profiled alongside J.P. Morgan in a New York Times article about the most active people in charity.

For his part, Schiff considered himself an equal to Morgan, who called him “that foreigner” but regarded him as a friend. Schiff stood at five feet, two inches in stocking feet, but he was a banking giant. According to banking lore, the Seligmans helped finance the Civil War by selling hundreds of millions of dollars worth of Union war bonds in Europe on behalf of President Lincoln. Warburg would go on to create the Federal Reserve System, and President Woodrow Wilson would appoint him to the Federal Reserve Board, where he was to serve as vice governor in 1917 and 1918. Warburg’s family bank, M.M.Warburg & Co., in Hamburg, had been founded in 1798 and would last into the Hitler era, when it was forcibly confiscated in 1938 by non-Jews.

Schiff, Seligman, and Warburg were among the grand dukes of New York society. They were part of a close-knit group of venerable German Jewish families who had built vast banking fortunes but who nevertheless were considered newcomers in America. Led by Schiff, these families played an important role in American philanthropy: they held fast to the Jewish principle of tzedakah, or “righteous giving,” from the root Hebrew word for “justice.”

Among the greatest financial minds of their day, these men shared a grand vision for their foundation: that New Yorkers, given the proper tools and means, could create social change. For a century now, this vision has served as a guiding principle of the New York Foundation.

See a complete list of New York Foundation Trustees from 1909 to 2009»

For a century now, this vision has served as a guiding principle of the New York Foundation. Early trustees’ best intentions were captured in an early report of the foundation’s activities: “It might have been possible to devote a major portion of the funds to building up a single project, or at best a highly concentrated program in one field, with an impressive physical structure and public reputation. The trustees of the New York Foundation have avoided this. Too often such structures become monuments, static concepts in which the zest for experiment and progress is lost. Rather, the Foundation has made its influence felt in scores of varied activities.”