Billionaire George Soros' Private Stimulus Plan

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Financier and philanthropist George Soros

Billionaire George Soros wants to show you his softer side, but his latest philanthropic initiative is a bit of a head snapper. Soros is announcing today a $35 million donation to benefit underprivileged New York State children to the tune of $200 each. Literally. His gift will help fund a program dubbed "Back to School New York" and will allow the state to access about $140 million additional dollars in stimulus funds that are available to programs that fund needy families. A one-off donation, Soros' largesse is supposed to help kids purchase back-to-school supplies, though some critics have called the gift — which they say lacks any means to ensure that families actually use the money as intended — a regressive, '80s-style welfare handout. Soros spoke to TIME about the program.

Tell me about this money you've donated.

Every kid of a family that is entitled to food stamps and public assistance gets $200, which hopefully should help them enter the school year better prepared and on a more equal level with other kids. This is for all the kids in New York State eligible for those programs — 850,000 kids — and it takes advantage of the federal stimulus package, which offers support to states with programs that qualify, like this one. I put up 20% of the cost and the state put up the rest.

Was there ever a thought of giving these families more money? $200 is a good amount of cash these days, but it's not a HUGE amount of cash.

I think $200 is significant enough. If you put in more, then you would probably have to set some conditions, because then otherwise it might be too much money. This looked like the right figure.

Why this? Why did you feel like this was the best way to direct $35 million right now?

As always, you try to figure out where you'll get the most mileage, or the most benefit, out of the donation. Focusing on children seems like the place to get the most good. Hopefully these children will have a long life ahead of them.

Now there's a bit of your own personal history that comes into the equation here, right?

Yes. I myself have received charity when I was in need. When I was a student in London, I was working as a waiter at night. When my tutor found out, she submitted my name to the Quakers, and they then sent me a check for 40 pounds, without any strings attached. I thought as a recipient of charity, that this would be a very dignified thing to do for others.

In the past decade or longer here in America, there have been great influxes of money from philanthropists into education experiments and the like. Do you think public-private partnerships can achieve results that wouldn't otherwise be possible?

Well, they're very important. I think that in many ways, private donors who give their own money, or their foundation's money, truly care about the objectives. They can actually have a beneficial influence on bureaucracies that generally try to protect their behinds from being criticized. Those bureaucracies are maybe less mission-oriented than private citizens that put up their own money. Very often, this is how we use money at our foundation, to set examples or to innovate in ways that the public authorities by themselves are unlikely to do. Generally speaking, I'm in favor of [using my money to] influence how public authorities spend their money.

Do you think there's more of an opportunity for philanthropists to make a difference now on account of the recession?

Yes. The point is that this is an exceptional time, when we are hit by a very severe recession and just when the needs are the greatest, the amount of money available from traditional sources has been decimated by the financial crisis. Therefore those who are in a better position ought to do more than they normally do. So I continue all the programs of the Open Society Institute. This is additional, and it's something I would not do unless we were in such an exceptional situation. Hopefully it won't be necessary to do it again.

Are you optimistic at all about how this financial crisis is going to play out?

I'm on the record having said this is unlike other crises, and it's the most serious crisis we've faced and it will have long-term repercussions. It's the end of an era, and there will have to be major adjustments. Those who expect that we will return to business as usual don't understand what's happening.