On this last episode, we look back on 23 years of joyous, difficult and always informative conversation.
D.C.’s quintessential monuments aren’t built and maintained on federal money alone. Much of the funding comes from private donations. And a lot of it can be traced back to one man: David Rubenstein.
Rubenstein, the co-founder and co-executive chairman of the Carlyle Group, engages in what he calls “patriotic philanthropy.” We’ll talk about what drives him to write multimillion dollar checks to repair the Washington Monument, renovate the museum under the Jefferson Memorial and more. Plus, we’ll hear from Trust for the National Mall, a nonprofit that raises money to fund upgrades and repairs for memorials and monuments.
Produced by Cydney Grannan
KOJO NNAMDIWelcome back. Who pays for renovations for the Lincoln Memorial, the Washington Monument, the Tidal Basin? You might think the federal government, but that's only part of the picture. Joining me to talk about how philanthropy fits into the upkeep of our monuments and memorials is Catherine Townsend. She is the president and CEO of the Trust for the National Mall. Catherine Townsend, thank you so much for joining us.
CATHERINE TOWNSENDThank you, Kojo, for having me.
NNAMDIAlso in studio with us is David Rubenstein. He is the co-founder and co-executive chairman of the Carlyle Group. He's also a philanthropist. David Rubenstein, thank you for joining us.
DAVID RUBENSTEINMy pleasure to be here.
NNAMDIAnd Mikaela Lefrak, you know, so I won't even bother to introduce her. (laugh)
MIKAELA LEFRAK(laugh) Hey.
NNAMDIShe is WAMU's arts and culture reporter and the host of the "What's With Washington" podcast. Hi, Mikaela.
LEFRAKHi. Thanks for having me back.
NNAMDIYou wrote a story last month about the man you're sitting next to right now, David Rubenstein. Why did you decide to profile him and his philanthropy?
LEFRAKWell, David and I first met at the top of the Washington Monument, right after it reopened to visitors. He had donated -- you donated about $3 million to renovate the elevator there. And we were standing at the top of the monument. David, I don't know if you remember, but you were pointing out all of these other institutions around the National Mall that you have donated both time and vast sums of money to.
RUBENSTEINI pointed them out, because you asked me. (laugh) I wasn't bragging.
LEFRAK(laugh) That is true. But I was just curious, because, you know, I've seen the name David Rubenstein all over these national landmarks, monuments and museums in my time as an arts reporter, and I wanted to know more about how this man earned his money, why he chooses to spend it in this way, and just a little bit more about him. So, that's where the profile came from.
NNAMDIDavid Rubenstein, care to mention some of the projects that you were pointing out to Mikaela? At her request, I might add.
RUBENSTEINOkay. In Washington, D.C., the projects that I've been involved with in terms of rehabilitating buildings have been the Lincoln Memorial, the Jefferson Memorial, the Washington Monument, the Kennedy Center, the Iwo Jima Memorial, Arlington House at Arlington Cemetery and the Archives building, and now the Library of Congress building, and the Smithsonian Buildings. And those are some of them.
NNAMDIHow do you decide which projects you're going to donate to? Are there certain criteria that a project has to meet?
RUBENSTEINIn philanthropy, there are many different ways of approaching it. You can say I want to do something that was helpful to me in my lifetime, helpful to my children, or you can say I just have a particular interest. In my case, my standards are generally these: one, I can get something started that wouldn't otherwise get started. Two, I can finish something that wouldn't otherwise get finished. Three, I’m likely to stay intellectually involved, because I have an interest in the matter. And four, I'm likely to see the benefit of it during my lifetime.
RUBENSTEINSo, now, you can criticize any four of those standards and say, well, you should support something that would be better, even when you're gone. And I try to do things that'll be better when I'm gone, but I'd like to see some progress while I'm alive. I'm now 70 years old, so I don't know how much longer I'll be around to see all these things. But those are some of the standards.
RUBENSTEINAnd the patriotic philanthropy, as I call this type of thing, which was designed to remind people of the history and heritage of our country, is actually about, you know, 5 percent of my philanthropic activities. But it gets 95 percent of the publicity, because very few people are doing these kind of things. Bill Gates gives away billions of dollars a year to really good causes, but for whatever reason, he tends not to do fixing the Lincoln Memorial or the Washington Monument.
RUBENSTEINAnd so, I get a disproportionate amount of attention -- perhaps unfairly -- for those kind of gifts, most of my gifts, honestly, are in the education or medical research area, but they don't get as much attention. Maybe they don't deserve as much attention. But these get more attention because it's seen as unusual for a citizen to do things that -- it is thought by many people -- the federal government should be doing.
NNAMDICatherine Townsend, it probably comes as a surprise to some listeners that building and maintaining monuments in D.C. isn't funded exclusively by the federal government. They actually rely on private money, too, and that's where organizations like yours, the Trust for the National Mall, come in. Tell us how it works.
TOWNSENDWell, the Trust for the National Mall is the leading nonprofit partner of the National Park Service unit that oversees the National Mall. So, we are the group that accepts private contributions in order to improve the National Mall, for capital improvement projects, programming, educational programming or volunteerism. So, we are the vehicle for those gifts.
TOWNSENDAnd what is surprising to most people is that they think that Congress takes care of it, and that's just not the case. They're putting millions of dollars into infrastructure improvements, but it's just not enough. And it's always been a public-private partnership, from the very first monument, the Washington Monument.
NNAMDIWhy does the National Park Service need to work with a third party nonprofit like yours, the Trust for the National Mall? Why couldn't they just raise the money themselves?
TOWNSENDWell, it's part of their laws or statutes that they can't accept private donations directly. They do need a vehicle such as the Trust for the National Mall. You know, part of what we do is we are not a path through. We don't just accept it and pass it on. We're the vehicle to accept it. We actually manage the projects. So, we actually bring in top designers. We have project managers. We have expertise on our team. And we help keep them, you know, accountable to some of those improvements that are happening. And, well, they need us. They need our services to help them do a better job, (laugh) because they can't do it alone.
NNAMDIThe National Park Service has about $12 billion in deferred maintenance, meaning repairs and upgrades they'd like to make, but haven't been able to afford. How much of that is on the National Mall? I know one of my favorites, the Carter Barron Amphitheatre, is not. But how much of it is on the National Mall?
TOWNSENDRight. Yeah, you'd be surprised. It's one of the highest deferred maintenance bills of all the 420 park service units across the country. It's right now at over $600 million just for repairs. And it's another 250 million for upgrades, needed upgrades for spaces in between some of the monuments and memorials. So, we have a very ambitious mandate with our partners at the Park Service to really address this, especially because the 250th anniversary of the Declaration of Independence is coming on 2026.
NNAMDIWe heard from Sarah from Foggy Bottom, by way of email. Before David Rubenstein started paying for all these things, how were upkeep and repairs funded? What do you know, David Rubenstein?
RUBENSTEINWell, I'm sure the federal government managed to get by before I showed up. (laugh) It's like anything in life, if you have a project that needs to get funded and fixed, if you don't get the money, you don't really do it. So, it gets a lot of deferred maintenance or patchwork kind of things. For example, the Lincoln Memorial is something that I've been involved with, to try to make it more of an education center so that underground, you'll have an education facility to tell people about Lincoln. If we hadn't done that, I guess the Lincoln Memorial still would've survived, but I think it'll be better with that.
RUBENSTEINOne of the things I'm trying to address is this. There is a lack of understanding of our civics and history in our country right now. So, for example, three-quarters of American recently could not name the three branches of our government. One-third of Americans could not even name one branch of our government. Ten percent of college graduates recently said that Judge Judy is a member of the United States Supreme Court. Now, you are a naturalized citizen? I don't know. Are you...
RUBENSTEINOkay. So, to be a naturalized citizen today, you have to live in this country five years, and then take a citizenship test. A hundred potential questions, you get 10, and you have to pass six. Ninety-one percent of the people that take this test pass. The same test was given by the Woodrow Wilson Fellowship Foundation last year to 41,000 native-born Americans. And in 49 out of the 50 states, the citizens who were born in this country could not pass the basic citizenship test. Only in Vermont could the citizens pass, a majority of them, and barely.
RUBENSTEINSo, it just shows we don't teach history and civics as much. The theory behind history and civics and things like that is that if you know the past and you know the mistakes of the past, you can void them in the future, somewhat. So, that's what this is about, reminding people of the history and heritage of our country.
RUBENSTEINAnd let me remind you about this. Take the Washington Monument. You can look at the Washington Monument on a computer screen. And let's suppose you say, I can look at it there, and I don't need to go visit. The human brain has not yet evolved such that the visiting in person is seen as the same as a computer experience. When you go to visit in person, you're more likely to learn more about it when you're preparing to go, or when you're there or afterwards. And by learning more about it, you're likely to be a more informed citizen. The theory of democracy is, you have an informed citizenry. If you don't have an informed citizenry, you don't have a very good democracy.
NNAMDIHere now is Eden in Washington, D.C. Eden, you're on the air. Go ahead, please.
EDENYes, sir. I see your passion. And in order to promote and educate the citizenry of the Washington, I'm working on a project of capturing the wisdom of them in a coffee table book. And I think it's a great vehicle to propagate your ideas in supporting this kind of project. Do you think that your charity might be interested in looking at something that spreads and evangelize the message?
RUBENSTEINWell, I get about $50 million of pretty good requests every week. (laugh) I can't do all $50 million. I'm not Mike Bloomberg or Bill Gates. But I would say this, you know, Kojo Nnamdi has given you his email address or his -- email it to him, and he'll send it to me, and we'll see what happens. Okay?
LEFRAKKojo, you're looking to make some donations, too, aren't you? (laugh)
NNAMDI(laugh) Thank you very much for your call, Eden. Yeah, when I see your work, I'll decide whether I'll give you my 2 cents. (laugh) One of the reasons you've donated to these causes is because you're a member of something called the Giving Pledge. Can you tell us what that is?
RUBENSTEINYes. Bill Gates, Melinda Gates and Warren Buffett started, about 12 years ago now, something called the Giving Pledge. Its goal is to get Americans who have net worths of roughly a billion dollars or more to give away half or more of their net worth during their lifetime or upon their death. And I committed to actually give away the bulk of my money, not just 50 percent, so I was happily able to sign it. And I was one of the first 40 Americans that did it. There were 40 at the very beginning.
RUBENSTEINSo, I am involved in philanthropy, and my goal is to give away the bulk of my money on the theory that my children should get a good education and get good parenting, but I don't know that necessarily giving them a staggering sum of money is necessarily going to make them better people or make the country better. So, I'm going to try to give it away while I'm alive.
NNAMDIYou are apolitical. Back in the day you did work with Jimmy Carter, but that was a long time ago.
NNAMDIBut today, you are apolitical. When you're giving to a project that may be controversial, as several Confederate monuments have become, if you're giving to the Arlington House Robert E. Lee Memorial, what goes into your head as you're doing that? And was there any pushback?
RUBENSTEINFirst, I did work for President Carter for four years, and I was very proud to do so. I am now a registered Independent, and I -- because I'm the chairman of the Kennedy Center, I've been the chairman of the Smithsonian, I'm the chairman of the Library of Congress board, support board, I think it's better to be able to do these things without being seen as Democratic or Republican. I host a series of dinners for members of Congress once a month about American history. And I think if I was actively involved in a political party, it wouldn't be as well-attended. So, that's why I'm apolitical now. I have my views, but I don't get involved in politics in the way you refer to.
RUBENSTEINOn terms of the Arlington House, that is a house better known to some as the Custis-Lee Mansion. That was actually built by a step-grandson, in effect, of George Washington, and it was designed to honor George Washington. Ultimately, the Custis family woman married into the Lee family, married Robert E. Lee, and he didn't actually own it himself, but ultimately, his family did.
RUBENSTEINIn my view, I decided to help restore it, not because it was Robert E. Lee that lived there, but because it is the crown of the Arlington Cemetery. If you go to Arlington Cemetery and you look up, what you see is the Arlington House. And people tend to go there when they've been to Arlington Cemetery, and I thought that place should more appropriately reflect a good visitation experience. As part of the gift, I insisted that the slave quarters that were there be built out. And as I did at Monticello and Montpelier, I funded money to rehabilitate those places, provided that they made it realistic and they showed, while these men were great, they also were slave owners, and the slave quarters were built out.
RUBENSTEINSo, I can see the controversy associated with Robert E. Lee and I'm not going to say that he was a perfect person, for sure. But I do think that reminding people of the history, the good and the bad, is a good thing to do.
NNAMDIMikaela, you talked with a lot of people who worked with David Rubenstein. What did they have to say about him?
LEFRAKYeah, so I spoke to a lot of people about you, David. And, on one side, there's, you know, folks like Smithsonian secretary Lonnie Bunch, Kennedy Center president Deborah Rutter who really rely on David as a lead donor, as an advocate and as a support system. They said his nonpartisanship is extremely helpful in supporting establishments like the Smithsonian and the Kennedy Center. They also said he is both the busiest person they know and the most available. And to be ready, if they ever email you, that you're going to email back in about 10 minutes. And that he's an incredible lead donor, and he can help bring other people onto their causes.
LEFRAKOn the other side, David is also a very, very rich person, and that doesn't sit well with a lot of people who take issue with the country's vast income inequality, and, you know, of course, including some lead presidential candidates right now.
NNAMDIWe're going to talk a little bit more about that, but before we do, Catherine Townsend, what's different about the way David Rubenstein approaches this work than other major donors that you've worked with?
TOWNSENDWell, I'll say, number one, is that he is hands-on. He really wants to know what the project is. He wants to know about it, he wants to know what the needs are, and he wants to know who else is involved. So, he actually will come on down and take a look. He tours, he sees the project several times, and then when he's ready to make a gift, he'll make a gift. And he's very engaged.
TOWNSENDHe's been a longtime supporter of the Trust. We have a number of projects you can check out at NationalMall.org, with a lot of examples. And, you know, what's great about David is that we hope he's inspiring others, that they know that they can give. It doesn't have to be in the millions. It can be $10 to endow a cherry tree. It could be at any level, big and small. And that's kind of the beauty of the National Mall was built on private philanthropy, with the Washington Monument people giving dollars at the voting booths to help build that monument. And here we are today, still needing public citizens, citizens across this country to give back. It's our national treasure.
NNAMDIIs he one of those old fashioned people from my generation who returns phone calls?
TOWNSENDHe does. He returns emails. He's accessible, and we really appreciate that with donors and their engagement.
RUBENSTEINSo, philanthropy is derived from an ancient Greek word that means loving humanity. I'd like to remind people, it doesn't mean rich people writing checks, though obviously checks are helpful. But giving your time and energy and ideas can be helpful, as well. When de Tocqueville came to our country in the 1830s and he wrote about it, he said that he couldn't believe how many people were volunteering for things in the United States, a phenomenon he hadn't really seen in Europe. And I try to remind people that if you're not extremely wealthy you can still contribute in many other ways. Obviously, organizations need money, but they need time and energy and ideas and volunteers, as well.
NNAMDIGot to take a short break. When we come back, we'll continue this conversation on who funds Washington's iconic monuments. You can call us at 800-433-8850. What are your favorite monuments and memorials in the D.C. region? Do you donate to organizations that support monuments and memorials? Why or why not? 800-433-8850. I'm Kojo Nnamdi.
NNAMDIWelcome back. We're talking about private funding for some of Washington's best-known monuments with Catherine Townsend, the president and CEO of the Trust for the National Mall. David Rubenstein is the co-founder and co-executive chairman of the Carlyle Group. He's also a philanthropist. Mikaela LeFrak is WAMU's arts and culture reporter and the host of the "What's With Washington" podcast.
NNAMDIMikaela, we got an email from Diane who says: I appreciate his philanthropy and his dedication. Can you talk about controversy surrounding how he and the Carlyle Group made their money? One thing you mentioned in your article is that some of David's critics thinks he takes advantage of the tax code. Can you explain that?
LEFRAKSure. So, I'll explain the broad structure, and then I'm sure, David, you have your own responses here. But basically there are a lot of criticisms out there of how David, Carlyle Partners and others in the private equity industry make money. And far better journalists than I at the New Republic and the New Yorker have looked into these issues in depth.
LEFRAKBut, very briefly, there are a couple key issues that they've focused on. One is the area in which the Carlyle Group made a lot of its money through leverage buyouts in the defense industry. Carlyle, of course, was called out in the documentary by Michael Moore, "Fahrenheit 9/11," for the way it's involvement with military contractors in Iraq, you know, earned certain people a lot of money.
LEFRAKAnd then there's this thing called the carried interest tax loophole. And, basically, it's a provision in our tax code. The taxes profits in the private equity industry at much more favorable rates than typical salaried wages. It's much more complicated than that, but...
NNAMDI(overlapping) Yeah (unintelligible) today, I know.
LEFRAKYes. But, you know, there's been support from both political parties for this loophole and this way of taxing compensation at lower tax capital -- than lower tax capital gains rates. And, again, it's a complicated issue, but some tax experts believe it contributes significantly to income inequality. And the real question at the heart of all this is, is our tax system set up so that billionaires like David get to kind of pick what they do with their, quote-unquote "extra" money rather than hand it over to the federal government so that representatives elected by the American people then get to disperse it.
NNAMDIAfter your article was published, you received some feedback from some readers about this. What did they say?
LEFRAKYeah, so there was one editor over at Time Magazine who said that, you know, any article about David here should really focus more on -- less on his philanthropy and more on the ways in which our tax code and our politicians have allowed income inequality in this country to grow so vast. You know, my focus with the article was more on how David's philanthropy has shaped the Washington region's culture and historical landmarks. But, yeah, it's a valid criticism.
NNAMDIDavid Rubenstein, how do you respond to that criticism?
RUBENSTEINWell, let me talk about the few points she made. We are in what's called the private equity industry, and we do buy companies. Early on, we did buy some companies, and we still have some in the aerospace defense industry. It's an interesting phenomenon. If you make an investment into the defense industry, people say, wow, that's terrible.
RUBENSTEINOur federal budget is about $800 billion in defense spending. Presumably, we want the veterans of our country to be compensated appropriately for their service. We want the people on the frontlines to have good equipment. So, if you invest in aerospace defense companies, is that a terrible thing to do? I don't think so. It's not called the offense industry. It's a defense industry. And those people that didn't have good defenses in, let's say, Europe or other places where there were terrible raids by bad people, maybe had they had more money in the defense industry, maybe they would've been stronger. And I think our country has been dependent and survived many years for having the defense industry.
RUBENSTEINSecondly, I did not invent the carried interest loophole, so-called, and I don't regard it as a loophole. I comply with the tax law as I see it. So, I get a charitable deduction if I give away money. I didn't invent the charitable deduction. Many people in the country have that and see that as a loophole. There are people who think that the charitable contribution -- so-called loophole or deduction -- should be eliminated, as well.
RUBENSTEINCarried interest is something that people in real estate, energy, private equity venture capital are able to use. I personally do not take it. I do not currently have any carried interest income. I did years ago, but the way my affairs are structured, I no longer get any benefit from the carried interest, quote, "loophole" or deduction, just because of the way my affairs at Carlyle have been structured. So, it's not something I'm benefitting from.
RUBENSTEINBut if I didn't pay as much tax as somebody wanted me to pay years ago, what can I do about it? I didn't go to Congress and say, create this deduction for me so I can benefit and make more money to give away more money. It was there. And when I fill in my tax returns, am I not supposed to comply with the law? I'm complying with the law. I didn't tell Congress to put it in there. They can change it anytime they want.
RUBENSTEINAny member of Congress can change the law if they convince enough other members of Congress to do so. So, what am I supposed to do? Not use the deductions that are available? So, I think it's an unfair criticism, obviously.
LEFRAKBut, just briefly, and correct me if I'm wrong here, David, but the carried interest tax loophole has been on the chopping block many times over the years. And hasn't Carlyle and other private equity firms paid lobbyists in order to try to keep that loophole in existence?
RUBENSTEINWell, we did not invent it. We didn't create it. Congress can change it any time. Why does Congress not change it? There must be some reason why Congress hasn't changed it. One of the reasons, I think, is that, in the private equity industry and the venture capital industry, we lead the world in those industries. They create a lot of value and jobs in our country. And so some people have thought maybe we shouldn't interfere with something that's working pretty well.
RUBENSTEINBut Congress can change it tomorrow. Anybody that wants to change it, go up and change it. I'm not stopping anybody. I'm not up in Congress lobbying anybody. If they want to change it, change it. But maybe there's a reason why it's good, just like the charitable contribution deduction is good, as well, many people would say.
NNAMDIHere now is Fergia in Vienna, Virginia. Fergia, is that the way your name is pronounced?
FERGIAYes, that's pretty close, Kojo.
NNAMDIGo ahead, please.
FERGIAYes, hi. My call is for Mr. Rubenstein. I'm calling to thank him. My daughter actually received an educational scholarship. And I think what he's doing is teaching others to give back. My daughter went to Washington University in St. Louis, and she mentored other children in low-income communities. And I think that gave her -- I know that it's not about giving money, but also Mr. Rubenstein showed up to the ceremony and talked to the recipients of the scholarship.
NNAMDI(overlapping) He has nothing else to do, obviously, (laugh) but go ahead, please.
RUBENSTEINWell, there -- thank you. There are two programs that I've sponsored in D.C. One is the economic scholarship program that's run by the Economic Club of Washington that I've funded. It basically gives, I think, it's two scholarships to the best two high school students selected by the principals in every charter school and high school in the city. Every year, they get a scholarship to go to college.
RUBENSTEINAnd then there's another essay contest that I've supported, as well. And so we've now had, you know, several hundred people get these scholarships over the years. And it's a very good program, I think.
NNAMDIAnd Fergia's daughter is obviously one of the people who benefitted from it. Fergia, thank you very much for your call, and good luck to your daughter. Catherine Townsend, not all of your donations come from billionaires like David. Who else do you receive donations from?
TOWNSENDThank you for -- that's a good question that you're asking. We get a lot of our funding from corporations and foundations, in addition to, you know, large donations from philanthropists and the general public. We get donations at all levels.
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