Michael Milken Set the Standard for Rehabilitative Philanthropy. Does That Even Matter Anymore?

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In a March piece ruminating on why leaders feel inclined to accept gifts from toxic donors, I suggested that if Sam Bankman-Fried ever wishes to rehabilitate his reputation, he’d be hard-pressed to find a better role model than Michael Milken. After pleading guilty to securities and tax violations in 1990 and serving time in prison, the former bond king went on to become one of philanthropy’s most impactful supporters of medical research, especially in the cancer field, where he founded the Prostate Cancer Foundation.

Now comes word that the 77-year-old billionaire has committed $500 million to a public exhibition space at his Milken Center for Advancing the American Dream in Washington, D.C. “At 77 years old and with a fortune some estimate at more than $10 billion, Milken is thinking about his legacy,” wrote the Wall Street Journal’s Miriam Gottfried. “Three decades after a partial ban from the securities industry forced him to abandon his finance career, he is trying to ensure that he is remembered for his contributions to capital markets, medical research and education — not for his felony convictions.”

I, for one, think Milken’s legacy is already secure. While some commenters to the Journal piece doubted Milken’s sincerity or deployed the familiar trope that philanthropy is nothing but a glorified tax write-off, I don’t think the larger general public — to the extent they think of Milken at all — feel the same way.

Thirty years have passed since Milken walked out of prison. He did his time. And while I realize it’s always tricky to adjudicate one donor’s toxicity relative to others with that label, his transgressions — he pleaded guilty to charges that included cheating financial clients and helping a client evade taxes — pale in comparison to more recent donor misdeeds. Moreover, his philanthropy hasn’t been a series of sporadic press releases and photo ops, but a consistent, decades-long commitment to impactful causes that have yielded real results.

Given all the commentary devoted to toxic donors these last few years, it’s easy to gloss over Milken’s unique philanthropic trajectory. Donors have overtly (the Sacklers) or subtly (Mark Zuckerberg, Bill Gates) used philanthropy to burnish their brands while navigating legal or PR challenges as free citizens. Others were big givers before coming under investigation (Steve Cohen, T. Denny Sanford) or before the public knew the full extent of their transgressions (Bill Cosby, Harvey Weinstein).

Milken is something of a unique case because he was an active philanthropist earlier in his career, and went on to give at higher levels after his indictment and time spent in federal prison. On one hand, of course, that seems to support the charge that Milken set out on a post-incarceration program of strategic reputation-washing. The closest analogue I can think of is Jeffrey Epstein, who kept the gifts flowing after serving 13 months in custody after his 2008 conviction for solicitation of prostitution involving a minor. But this, too, is an unconvincing comparison. Setting aside the odious nature of Epstein’s crimes and his subsequent arrest and suicide in 2019, we now know that his post-conviction giving was perfunctory and brazenly transactional.

One thing that makes Milken’s giving different is that he seems to be driven by deeply personal experiences, at least in part. Milken began funding medical research in the 1970s when two members of his family were diagnosed with cancer. Along with his brother Lowell, he co-founded the Milken Family Foundation in 1982 with a focus on medical research and education. A core component to Milken’s philanthropy is his unwavering commitment to prostate cancer research. The month he was released from prison in 1993, he received a diagnosis of terminal prostate cancer and was told he had 12 to 18 months to live. That same year, he started the Prostate Cancer Foundation, which, according to the Wall Street Journal, “is widely credited with revolutionizing the way the disease is researched and treated by lowering the hurdles to funding for promising ideas and encouraging collaboration among research scientists.” 

But Milken, who survived his bout with cancer, has funded a number of other causes, including support for inner-city students and teachers. In 1989, the year Milken was indicted, he and his wife Lori launched the Milken Scholars Program, which provides students with scholarships and ongoing counseling. Two years later, he founded the Milken Institute, a nonpartisan nonprofit economic think tank. In 2003, he launched FasterCures, a Washington, D.C.-based think tank that seeks greater efficiency in researching serious diseases. The outfit creates white papers with the intent of helping donors make maximally impactful gifts, and I can think of few other major donors who proactively seek to educate affluent donor peers to such an extent. In 2014, he gave a combined $50 million gift to George Washington University for health research and scholarships through his Milken Family Foundation and the Milken Institute.

Moreover, Milken shows that if you’re going to rehabilitate your reputation through philanthropy, you might as well put a whole bunch of your chips on the table. According to the Wall Street Journal, Milken and his family have given over $1.5 billion to charitable causes.

Lastly, Milken kept his nose relatively clean after his release from prison, although there have been a few hiccups along the way. For example, in the late 1990s, regulators accused him of improperly counseling Rupert Murdoch and billionaire Ron Perelman on pending financial deals. Milken maintained his innocence but agreed to return the $47 million in fees he received.

But again, we’re talking about redemptive philanthropy, where the ultimate arbiter of a donor’s behavior is the general public, and I just don’t see evidence to suggest that the average citizen cared or even knew about Milken advising fellow billionaires. In fact, if any recent news item reintroduced Americans to “the man who changed medicine,” it was in 2020, when President Donald Trump pardoned him at the behest of Rudy Giuliani, the man who prosecuted Milken back in the late 1980s.

To date, few once-toxic donors have followed in Milken’s philanthropic footsteps to such an expansive and impactful degree, and looking ahead, I doubt any currently radioactive givers will bother to try. After all, this isn’t 1993. Revelations involving the extent of Sackler family giving, as well as Bankman-Fried’s downfall and his admission that his overtures to “ethics” were simply “what reputations are made of, to some extent,” affirmed the public’s long-held hunch that rehabilitative billionaire philanthropy is a charade. Donors, I suspect, at least partially recognize this, and it’s created a climate where they either don’t seem to care about public redemption, or have chosen to pursue it by other means.

If we strip the argument down to the most basic level, the entire point of rehabilitative philanthropy isn’t about supporting nonprofits — donors could easily do that privately — but about currying favor with the general public. But have donors who’ve engaged in arguably rehabilitative philanthropy actually gotten a return on their investment? And are those who haven’t done so liked less?

The evidence seems to be mixed. A 2022 poll asked respondents about their opinions of major tech leaders. Bill Gates, who ramped up his foundation around the same time Microsoft was being investigated for antitrust activity, had the highest favorability rating, at 69%, despite his ties to Epstein. Elon Musk, who has been roundly criticized for his lack of public giving, and whose electric car company fired employees for staying home during the pandemic, notched an admirable 64%. The least popular mogul was Zuckerberg, who clocked in at 43%, despite firehosing nonprofits with cash since launching the Chan Zuckerberg Initiative in 2015, pledging to “help cure, prevent, or manage all diseases,” and giving almost a half-billion dollars to safeguard the 2020 election.

There’s also Sheryl Sandberg, who commentators expected to embark on a high-profile philanthropic push to rehabilitate her tarnished brand when she stepped down from Meta last year. A review of publicly available information suggests that she hasn’t done so, and it may be that her brand, apart from that of Meta, isn’t really that tarnished at all.

The irony, of course, is that Zuckerberg’s public image has received a boost as of late, but it’s not because of his public philanthropy. It’s thanks to the foibles of Elon Musk who, improbably, is making Zuckerberg “seem cool again.” Just like Steve Cohen, who New Yorkers lovingly call “Uncle Stevie” for his profligate spending on his New York Mets, the increasingly shirtless Zuckerberg is discovering that philanthropy isn’t the only way to improve one’s image.

This is why I find Milken’s 30-plus-year public rehabilitation tour somewhat outdated and quaint, despite the fact that it’s arguably been successful for him. These days, given the choice between rolling out a robust rehabilitation campaign that may not win over a suspicious public versus pouring money into a DAF and reaping an equally generous tax break, or just doing nothing, quasi-toxic donors seem to prefer the latter two options. Milken laid out a compelling roadmap for those seeking public redemption, but what’s the point of a roadmap if it takes donors somewhere they don’t want, or need, to go?

This article has been updated with additional information about Michael Milken’s philanthropic record, including his giving prior to his indictment in 1989.