For almost two years, Greece has been the epicenter of a sovereign debt crisis that threatens to undermine a European monetary union more than twenty years in the making. Ever since the country received a bailout in 2010, questions about its ability to service its debt have kept global financial markets on edge and Eurozone finance ministers, the European Central Bank, and the International Monetary Fund scrambling to find a solution. The announcement in February of a second, $172 billion (130 billion) bailout did little to boost confidence that the country will be able to put its public finances on a more sustainable footing and avoid a potentially catastrophic default.
The real tragedy in the situation, however, is the worsening economic plight of the Greek people. Even as Europe skids into recession, the Greek economy is spiraling into depression, taking people's livelihoods, life savings, and hopes for the future with it. As Anastasis Chrisopoulos, a 31-year-old Athens taxi driver, told a Reuters reporter after the most recent bailout deal was approved: "So what? Things will only get worse. We have reached a point where we are trying to figure out how to survive just the next day, let alone the next ten days, the next month, the next year."
Earlier this month, the Stavros Niarchos Foundation (SNF) announced grants totaling $12.1 million (9.2 million) to sixteen organizations in Greece — the first installment of a three-year, $130 million (100 million) commitment announced by the foundation in January to address the effects of the deepening socioeconomic crisis there. Established by Stavros Niarchos, the Greek shipping tycoon, before his death in 1996, the foundation typically allocates in the neighborhood of 50 percent of its grant dollars to organizations and projects in Greece. In 2009, the foundation committed $790 million (566 million) for the development and construction of the Renzo Piano-designed Stavros Niarchos Foundation Cultural Center in Athens.
Two of Niarchos' sons — Philip and Spyros — and a great-nephew, Andreas Dracopoulos, serve as co-presidents of the foundation's six-member board. PND spoke with Dracopoulos in New York in December and again in February about the foundation's approach to grantmaking, its decision to proactively address the situation in Greece, and his views on the ultimate resolution of the crisis.
Philanthropy News Digest: SNF makes grants in four broad areas — arts and culture, education, health and medicine, and social welfare. What, if any, are the advantages of working internationally within those portfolios?
We believe in collaboration, at all levels, and having broad portfolios gives us a lot of flexibility to pursue public/private partnerships that help link the U.S. with Europe or with Greece, and vice versa....
Andreas Dracopoulos: Well, we believe in collaboration, at all levels, and having broad portfolios gives us a lot of flexibility to pursue public/private partnerships that help link the U.S. with Europe or with Greece, and vice versa. At the end of the day, however, it's really about whether a project actually will add social value. If we think it will, and if the people behind it can demonstrate they are committed and will do a good job, we'll consider funding them.
PND: Can you give us an example of the kind of work you support outside Greece?
AD: Twenty percent — around 50 percent, if the Stavros Niarchos Foundation Cultural Center is excluded — of our grantmaking is international, and one of the things we have focused on with those grant dollars is accessibility and inclusion in the arts, for artists as well as patrons. Over the past six years, for example, we've provided support for accessibility programs at the Museum of Modern Art. We also support the Theatre Development Fund in New York City and some of its national work on open captioning, and Lincoln Center's accessibility campaign. And just recently we awarded a grant to Second Stage Theatre to boost ADA compliance at its new theater on Forty-Third Street.
PND: What is the foundation's biggest program in the United States?
AB: We don't operate programs in the U.S., although we do fund programs run by others. Our largest commitments have been to institutions like Johns Hopkins and Weill Cornell Medical College for medical research, and we've also provided major support to the Museum of Modern Art, the New York Public Library, and Yale University.
PND: Let's talk about the situation in Greece. For the last two years, the country has been at the center of Europe's sovereign debt crisis. How did Greece get into the mess it finds itself in?
AD: It's complicated. But at the end of the day, it's a problem that affects all of Europe, so I think it's important for us to talk about it. Look at Ireland and Greece, two countries having trouble. In those countries, the problem of too much debt had completely different origins. In Ireland, it was basically banks and the private sector that caused the problem with too much leverage and risky lending. In Greece, in contrast, it was the actions of the public sector over the last thirty or forty years that are to blame. Loss of competitiveness, what I call an erosion of morality, not following the rules, not following regulations, not paying taxes, a big black-market economy, people becoming complacent and entitled. All these things added up over these years. While the music was playing, everybody was happy. Greece hosted the Summer Olympic Games in 2004, and there was this false sense we had made it. That was another problem, because once again I don't think the country did a good job preparing for the Games. We were lucky that in the end it all worked out, but it reinforced the false sense that we didn't need to work any harder, that when push came to shove we'd be able to pull it off. Of course, the budget for the Games went through the roof. And it was the public sector that was most responsible for that and for the terrible situation in which the country finds itself.
PND: Even for those who follow the news from Europe, the crisis in Greece can seem pretty far removed from their everyday concerns. What has the crisis meant for the average person in Greece?
In some ways, it's similar to what happened with Lehman, except that Lehman could and did disappear. Greece cannot disappear. Which means the Greek people will continue to suffer....
AD: I live in the States, but of course we have families in Greece and an office there, so we hear a lot about what's going on. I think over the last five to six months months, especially since the summer, the country has entered a new stage of the crisis, a stage where you have real suffering, people not having money, leaving their kids in orphanages because they have nothing to feed them, committing suicide. It has become a real social crisis. It's like Greece is a dying animal. In some ways, it's similar to what happened with Lehman, except that Lehman could and did disappear. Greece cannot disappear. Which means the Greek people will continue to suffer.
PND: SNF made a $1.9 million grant in December to address some of the more negative effects of the crisis. That was followed in January by the announcement that you had decided to commit up to an additional $130 million over three years to address the effects of the crisis. Let's start with the first grant. What were your objectives in making it?
AD: The important thing about it was that it was made to fund a series of pilot programs. Unlike the States, where you have all these organizations that are part of a regulated, well-functioning system, in Greece you don't have that. We were working over there with two small NGOs that were pretty new to this kind of work, and we were trying to see whether it would work. If it did, we were prepared to do more.
PND: And how did you determine it was working?
AD: Because it was new for us, we did things a little differently. We had people from our office here traveling to Greece to talk to people there to see, first-hand, how things were going. In other words, we were much more actively involved in the implementation of the grant than we would have been if it had been made to an organization in the States; here, we do our due diligence, make the grant, and move on. It's different in Greece because everything is up in the air. We wanted to have more control in terms of the money; we wanted to know that programs were being implemented properly. And we wanted to follow some of the best practices we learned in this country through our work on issues like homelessness and hunger. Those were the areas we were focused on in Greece, even though both were relatively unknown in Greece until fairly recently. So, working with our grantees, we piloted a program that tries to help families stay in their homes. A second program aimed to create three day centers where people could drop in during the day, get a meal, rest, take a shower, wash their clothes — the kind of stuff you and I take for granted. And because we were starting to see evidence of rising levels of hunger in the general population, a third program aimed to boost the capacity of an organization that was already providing free meals to people who needed them.
PND: Obviously, you were pleased with the way those funds were used and decided to make a much larger commitment. How was that decision made, and what do you hope to accomplish with those funds over the next three years?
AD: As the crisis deepened, impacting every level of Greek society, it became evident that the initial grant of $1.9 million was not enough. We felt we needed to do more. Our hope is that the infusion of new funds will help ease some of the effects of the crisis, while creating the necessary long-term infrastructure for nonprofit organizations to be able to address these issues in the future.
PND: Has the crisis undermined the Greek people's support for the Eurozone? Has it undermined their faith in democracy?
The crisis has not undermined people's faith in democracy, but it has undermined their faith in politicians. There is no doubt about that....
AD: The crisis has not undermined people's faith in democracy, but it has undermined their faith in politicians. There is no doubt about that. I mean nobody in Greece trusts politicians, because they have been a big part of the problem. Certain politicians have been among those who have been corrupt — people know that and have lost faith in politicians and the political system as a result. But not in democracy.
In terms of the Eurozone? No. I mean, even now, at least two-thirds of the Greek people want to stay in Europe. And the reason is something else the media doesn't pay enough attention to. It's not just the benefits of a common currency. There's a lot more to it, in terms of history and security arrangements, and so on. So despite all the difficulties, I think the Eurozone will survive, and it will survive with Greece as a part of it. The political and economic costs of the alternative are just too great for it to be otherwise.
PND: Given the well-publicized reluctance of many Greeks to pay taxes, has the crisis affected the way the average person in Greece looks at those in society who are more fortunate?
AD: I think it's worth noting that people here in the States have started talking about the 99 percent and the 1 percent. Even so, the situation here is very different from the situation in Greece. In the U.S. — there are exceptions, of course — rich people pay their taxes and do a lot of philanthropy that benefits society at large. But in Europe overall, and in Greece especially, people don't do that, they don't give back. It's like what John F. Kennedy said in his inaugural address: "Ask not what your country can do for you, ask what you can do for your country." In Greece, they don't ask. Or they don't ask enough, in my view. Wealthy Greeks go out of their way to avoid taxes and they give almost nothing back, at a time when they should be doing more — a lot more — of both. The social fabric has to be maintained in order to have a functioning society, and in Greece wealthy people are not doing enough to help maintain it.
PND: Are you concerned that the crisis is doing permanent damage to the social fabric in Greece?
AD: It would be unrealistic for one not to be concerned about that possibility. On the other hand, we have witnessed extraordinary acts of kindness from people toward those most in need, as well as significant mobilization to provide the kind of support that didn't exist before. All of a sudden, we seem to be less introverted as a people, and that can only be a good thing.
PND: How long will SNF continue to make grants to help mitigate the effects of the crisis in Greece?
AD: As long as there is a crisis. In a way, given that our founder was Greek and our main focus is Greece, we don't have a choice. At the same time, we have to be careful. We cannot replace the Greek state. No one wants that, and we don't have the capacity to do it. But because nobody else is doing anything, we have to be careful we don't create false hopes or an expectation that we're going to step in and fix things. It's a fine line.
PND: What's your best guess as to how this all ends? Most of us have read about the rioting in Athens earlier in the month and the call for a general strike. There's an election coming up in April, and the mainstream parties backing the bailout are losing support. Will the Greek people continue to embrace the austerity being forced on them by the rest of Europe? Or will Greece exit the Eurozone, go back to the drachma, and try to devalue its way out of its debt problems?
How can you embrace austerity? Will the Greek people accept what is being imposed? Yes, because, one, they don't have a choice; and two, because the majority of the Greek people agree that the whole situation has gone on for too long....
AD: How can you embrace austerity? Will the Greek people accept what is being imposed? Yes, because, one, they don't have a choice; and two, because the majority of the Greek people agree that the whole situation has gone on for too long. What they will no longer accept is the fact that 15 percent of the people in Greece are largely to blame for the whole crisis in terms of corruption and tax avoidance and so on. These people have done a lot of damage, and they're not paying to fix it. That's the big problem, and it's affecting a lot of issues in Greece, including possible solutions.
PND: Do you think philanthropy in Greece will come out of the crisis stronger because of the response of foundations like SNF?
AD: Well, you have to ask whether such a thing as philanthropy even exists in Greece. I know, philanthropy is a Greek word — philos and anthropos, meaning "friend of the people" — but in practical terms, it doesn't really exist there, at least not in an institutional form. Individuals do what they can, but there are very few foundations in Greece, and philanthropy in an organized, institutional sense simply doesn't exist. You would think the situation would have improved somewhat over the last decade, but it hasn't; wealthy Greeks have not been giving back to society. But the time has come for those who have the means to step up and help.
PND: And if they don't?
AD: Then the crisis will persist and affect a significant number of Greek people, shattering social cohesion in the process and quite probably inciting class warfare.
PND: Well, we hope it doesn't come to that. Thank you for your time this morning, Andreas.
Mitch Nauffts spoke with Dracopoulos in December and again in February. For more information on the Newsmakers series, contact Mitch Nauffts at email@example.com.