Gift Guides

0



Grandson of hotel magnate and philanthropist Conrad N. Hilton, Steven M. Hilton was named chairman and chief executive of the Conrad N. Hilton Foundation in August. Established in 1944 and based in Century City, the foundation didn’t really take off until Conrad Hilton died in 1979. It now has over $800 million in assets and is on track to make $45 million in grants over the next year in various program areas, such as assisting children with multiple handicaps, eradicating homelessness among the mentally ill and improving international water development. The foundation also administers the $1.5 million Hilton Humanitarian Prize, which is awarded each year to an organization that is significantly alleviating human suffering. Like other members of his family, Hilton took a turn working at the hotel company but decided over 20 years ago that he would rather spend his time overseeing grants in the no-nprofit sector.



Question: Did you ever work at a Hilton?

Answer:

I worked at Hilton Hotels in a variety of positions for about five years in Alabama, Georgia and California. My most recent job with Hilton Hotels was in 1983 as assistant to the general manager at the Mobile Hilton in Alabama.



Q: What was that like?

A:

Growing up I felt people tended to project their own images of who I was. For example, while working within Hilton Hotels I occasionally came across fellow employees who probably looked at me as a spoiled rich brat who was handed the job on his way up the corporate ladder. When other employees saw that I actually did not receive any special treatment and took my job seriously by working hard, in most cases they would come around and accept me as part of the team.



Q: What made you want you to go into philanthropy?

A:

While growing up, I didn’t think much about the Hilton family foundation as a possible career, mostly because the foundation was relatively small until after Conrad Hilton’s death in 1979. But when my grandfather passed away, he left almost his entire estate to the foundation.



Q: So is that when you joined?

A:

Before I starting work at the Hilton Foundation in 1983, I worked on an oyster farm in Hawaii for about a year, since I was interested in aquaculture, or fish farming. Unfortunately, the oyster farm went bankrupt and closed operations.



Q: What does the foundation do?

A:

We take what we call a major project approach. The typical foundation tends to give a smaller amount to many different organizations, typically for one or two years. We fund much larger projects over a longer period of time, say eight to 10 years, with the understanding that if they are successful, our funding may continue.



Q: So how do you choose what areas to focus on?

A:

I am a generalist, so I know a little about a lot, largely because we get involved with so many things. The key is finding these niches where there is a great need, but there is not a lot of attention or resources focused. We then go out and hire experts to research the subject.



Q: So how do you approach the experts?

A:

Typically, we would ask them, “If you were the Hilton Foundation and had all this money what would you do?” It’s a great way to tap into their knowledge on the subject. They come up with these priorities and we present some to the board. Then the board can select one with the greatest potential and the best fit with our mission.



Q: Do you have an example?

A:

When we started to work on children’s blindness, we selected Perkins School (for the Blind), where Helen Keller went, because they stood out and had a very strong track record but were largely regional. We felt based on their track record they were well positioned to expand internationally.


Q: What other causes does the foundation support?

A:

One of our areas of concern is the mentally ill homeless, and we have worked with a group called Corporation for Supportive Housing to that end. It’s not providing just the homeless with a home or an apartment; it needs to be linked with services to support the person.



Q: Why is homelessness of particular concern to you?

A:

I think that in a country that has as much wealth as the United States, it’s a disgrace for us as Americans to accept so many people living on the street. If you’ve ever traveled to Europe or Australia or Japan, there are many other developed countries where you will not see many homeless. You might see a few but nothing even remotely approaching what you’ve got here. I find it totally unacceptable, and when you learn that you can provide housing with services for the same cost as if you did nothing, it just makes you think: Why not?



Q: What about some specific local initiatives.

A:

In Los Angeles, we have provided $8 million, mostly through the Corporation for Supportive Housing, and are working with many other local foundations like the Weingart Foundation, which works with community clinics, mostly health-related services.



Q: How much of a dent does it make?

A:

Supportive housing could be the gate or the bridge to take them off the street and stabilize their life. Many others, though, if they have a serious mental illness will never be able to adjust. It’s just too much to expect.



Q: Now that you are in charge, what changes do you have planned?

A:

We have a huge potential to be more entrepreneurial, and I hope to bring more of an entrepreneurial spirit to the foundation. One of the things I want to continue doing is leveraging. If we make a huge grant, maybe it will draw attention of other organizations and influence them to join us.



Q: Any example of that?

A:

When we started working with World Vision (International) on finding sources of clean drinking water, they were able to partner with the Desert Research Institute to use aerial photography to help identify potential sources of water, and now they use them for all of their work. The idea is to foster collaboration and end up with a huge, far-reaching network that can work together.



Q: How is the foundation doing financially?

A:

We use a money manager consultant Cambridge Associates. Over last 10 years, our average annual return is 11.7 percent, which is higher than the S & P; 500 over the last 10 years, which is 9.5 percent. We have a very diversified and balanced portfolio.



Q: Does that mean you are heavy on the hedge funds and other exotics?

A:

Our investments were made with very few alternative investments, like hedge funds and venture capital. We have more of a slant toward value stocks. We don’t tend to change money managers; some of our best performers have difficult periods where they don’t perform. Our philosophy is we are in there for the long haul. We understand that even good money managers have periods where they are not going to do that great.



Q: The non-profit sector has come under criticism over excessive pay to officers, board members and other wasteful expenditures. Is that fair?

A:

Some of this criticism is justified and healthy since it exposes the few bad apples. On the other hand, the media seems to focus more on the egregious examples of bad philanthropy since it draws people’s attention. Unfortunately, so many negative stories give the public the impression that things are far worse than is really the case.



Q: How would you rate your own foundation?

A:

Conrad Hilton’s will advises future directors to be wary of charities with high salaried executives and a heavy ratio of expense. Although he was referring to the non-profit charities to which we give funds, we at the Hilton Foundation take that to heart regarding our own operations. One way we do that is by operating with a lean staff of only 14.


*

Steven M. Hilton



Title:

Chairman and Chief Executive


Organization:

Conrad N. Hilton Foundation


Born:

Los Angeles, 1950


Education:

B.A. history, University of California at Santa Barbara; MBA, University of California at Los Angeles


Career Turning Point:

Joining the Hilton Foundation in 1983 as a program assistant


Hobbies:

Gets up early in the morning to surf


Personal:

Lives in Malibu with wife Lisa, a jazz pianist; and two children.

No posts to display