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The hustler turned philanthropist

FOCUS: NEWMAN’S OWN

Marc Smith is acting editor of Families in Business.

Big-screen legend Paul Newman uses his salad dressing company to raise money for those less fortunate than himself. He talks to Families in Business about his business, his charity and his own brand of philanthropy

"They Called Him 'Fast Eddie'" was the tagline for The Hustler, the 1961 film about an up-and-coming pool player taking on a long-time champion in a single high-stakes match. Although now 82-years-old and not as quick as he was in his heyday, Paul Newman is still someone who is inextricably linked to chance and good fortune.

As the head of Newman's Own, the food business he set up with friend and Hemingway biographer AE Hotchner in 1982, Newman is determined to reach out to those less fortunate than himself. All profits from the enterprise go to a range of charities, including one that Newman himself set up – The Hole in the Wall Association, which was named after the gang in another of Newman's iconic films, Butch Cassidy and the Sundance Kid.

"You're either lucky or unlucky and one of the things that I have been concerned with is the bad luck that certain children have," Newman exclusively told Families in Business. "Some people have the good fortune to be born in circumstances where gifts and talents of persuasiveness collide – it's all a matter of how your genes get put together."

Ironically, it was Newman's own very special mix of genes that has enabled him to lead such a fortunate life, and taken him to the heights of the acting profession, onto motor racing and, latterly, philanthropy. But he doesn't believe that wealthy individuals have an obligation to become involved in philanthropy. "Obligation is a bad word, but I don't see how they can avoid extending their hands out to those who are less fortunate than they are," he says. "I think it just goes with the territory – what else would you do with it?"
 
Paul's own recipe
The company had an inauspicious beginning. Instead of giving bottles of wine to the neighbours one Christmas, Newman decided to make salad dressing, which he had experience of perfecting in restaurants before his acting career took off. Twelve lucky families received the unusual gifts and a couple of months later they were knocking on the door asking for refills. The rest, as they say in Hollywood, is history.

"When we started this idiotic salad dressing business, it did all the things that it wasn't supposed to do," says Newman with his tongue only half in his cheek. "Back then all we really needed was a bookkeeper, a distributor and someone to manufacture the stuff. So we only had three people in the office in total." Today, there are still only 22 people working in the business although it has expanded out from salad dressings to sauces, marinades, drinks and popcorn. There is also an organics range that was set up by Newman's daughter Nell.

Newman's Own is essentially a for-profit philanthropic organisation – a vehicle that has garnered a lot of publicity in the past few years thanks to high-profile launches by the likes of Google founders Larry Page and Sergey Brin, and eBay's Pierre Omidyar. "If we don't make a profit there's nothing to give away," confirms Newman. With a success that has clearly surprised him, the total amount given to charity since the company's inception now stands at approximately $225 million.

"I was really exploiting celebrity and figured there was no way out but to give the money away," admits Newman, who no longer has any day-to-day responsibilities, but concentrates on deciding where to donate his portion of the profits. Under the rules that the firm has established – described by Newman as a form of "creative chaos" – all Newman's Own employees and Newman's family are allocated money to give to whichever charities they wish. "There's no precondition other than I like to ensure that no more than 20% is given to any one cause," he confides.

Hole in the Wall remains his most enduring beneficiary. Founded in 1988, it is a nonprofit residential summer camp for children with cancer and other life-threatening illnesses. "It goes back to luck and children who just get a nasty break," explains Newman. "I just woke up with the idea one day and went ahead with it." The first camp was built in Ashford, CT, and there are now five operating in the US (in California, Carolina, Florida and New York), plus six overseas camps (in France, Hungary, Ireland, Israel, Italy and the UK).

Since 1988 over 125,000 children have attended camps, 16,000 in 2006 alone. The children get to participate in a range of activities from fishing and swimming to performing arts and creative writing, while medical care is provided around the clock by doctors, nurses and many qualified volunteers. The charity also has a Hospital Outreach programme that takes its "Camp-in-a-Suitcase" initiative to New England hospitals and clinics to raise the spirits and help sustain seriously ill children for the road ahead.

"The therapeutic value of the camps is extraordinary," admits Newman. "We never realised what a simple week's experience meant to the kids' lives and the lives of their parents and siblings. It is astonishing." As an independent charity responsible for raising the funds to support its own annual operating budgets and capital needs, however, the price of running the camps never stands still – the fundraising goal for the period 2006-2007 for all the Camps exceeds $40 million.
 
Community spirit
So with the inevitable commercial considerations, does he agree that, as a general rule, it's important for philanthropy to be linked to business? "No, but I think it's very important for business to be linked to philanthropy," he says – and it's an important distinction to make. "There are a lot of community benefits that corporations and businesses get, but it can't be a one-way street," he continues. "I feel very strongly that if they are part of the community, their intention shouldn't be to make the final last nickel for the business and their shareholders. I don't know if that's a very popular concept but it's one that I really believe in."

It is also a concept that has had a profound impact on the rest of the Newman family – particularly his wife, Joanne Woodward, who is on the advisory committee of Hole in the Wall. "I think they move forward with a little more pride," says Newman modestly. "And they are probably more judicious about how they pick charities than I am." But as a family that is so linked into philanthropy, he is under no illusions as to what the major benefit is. "Giving something back to the community is really the best part of business and I suspect that people who are involved in it feel the same."
 
Like father like daughter
Daughter Nell is the only second-generation family member to be involved in the business as the founder of Newman's Own Organics. The story goes that after cooking the family an all-organic Thanksgiving dinner, she persuaded her father to set up the Organics branch of the company – not that he was particularly surprised by the development. "She's always been very interested in things involving the environment and sustainable agriculture, so it seemed natural that she would form the organic arm," he says.

Nell founded Newman's Own Organics – whose products include organic pretzels, cookies, olive oil and vinegar, as well as fair trade coffee and pet food – in 1993 before it became a separate company in late 2001. Today she is responsible for the company's product development and marketing.

"All of Newman's Own products are ones that Dad enjoys, so I develop recipes that he really loves and can be proud of," states Nell, who credits her parents with teaching her by example to be socially responsible, politically involved, and philanthropic.
 
Modest to the end
It has been reported that one of Newman's proudest achievements was being 19th on President Nixon's list of enemies, and while he doesn't deny the fact, modesty gets the better of him when I ask him to name his proudest achievement in terms of his philanthropy. "I really don't know, I never gave it much thought," he says. "I think the thing that I like most about it is that it is not terribly organised."

Equally, when I ask him what piece of advice he would give to families in relation to their philanthropy he admits to feeling uncomfortable giving such counsel. "I say this with as much humility as I can muster but I'm not really in the advice business. I think it's really good for everyone to just find their own way and to deal with their philanthropic ideas the way they feel it should be done."

As our conversation draws to a close, it is interesting to reflect on the contradictions in his character. On the one hand there is his clear vocation to help those children who have grown up with incomparable difficulties as a result of illness and, as Newman points out on several occasions, bad luck. But there is also a different side that comes across through the accidental nature of the business, his creative chaos motto and a belief that "if people don't vote, they shouldn't be allowed to call the fire department". Then again, maybe I've just been the victim of a hustle.

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