August 19, 2010
Premier Automotive Supply, the business they started in a small storefront at 6525 Euclid Ave., went public in 1960 and continued to grow, becoming one of the largest U.S. distributors of auto parts and electronic components. The company initially focused on specialty parts – “find a need and fill it,” they explained – and excelled at keeping a laser eye on details and providing superior customer service.In 1996, their Premier Industrial Corp. merged with Farnell Electronics PLC of England in a $2.8 billion deal; about $1.8 billion went to the brothers, who at the time indicated they planned to use much of it to further their philanthropic endeavors.In 2007, the last year for which tax reports are publicly available for several family and supporting foundations from which they make grants, their philanthropic assets totaled more than $2 billion, and they made grants of more than $74 million. The foundations, though technically separate grant-making sources, comprise the Mandel Foundation, among the largest foundations founded by Jews in the country.During the recent economic crisis, Morton Mandel noted, “We were negatively impacted, but it didn’t impact our giving pattern. In our case, our giving has gone up.”The Mandel name stands for significant philanthropy in the Jewish world: the $16 million gift for the new Federation building and $13.5 million for JCC renovation are two of the largest donations ever made to local Jewish agencies. The Mandels provide ongoing support to the Mandel Leadership Institute-Israel. They also support leadership training efforts in the national Federation and JCC movements, in which Morton Mandel has had top leadership roles.
After he chaired the Commission on Jewish Education in North America, he became one of the first funders to support initiatives reflected in the commission’s 1990 report “A Time to Act,” which called for strengthening the Jewish education profession and mobilizing community support for Jewish learning.The Mandel name also stands for significant philanthropic impact in the non-Jewish world. The Mandel School of Applied Social Sciences and the Mandel Center for Nonprofit Organizations, both at Case Western Reserve University, are two of the many programs or endowed professorships they have supported at universities. Their focus on neighborhood renewal led to the establishment of Cleveland’s MidTown Corridor to address inner-city economic revitalization. Communal causes such as United Way and museums and cultural activities also benefit from their generosity – which includes time spent in leadership roles as well as financial support.But the brothers’ strong identity with their Jewish heritage has resulted in their giving a larger proportion of their grants to Jewish causes than do most other Jewish foundations. In “A Study of Jewish Foundations” in 2007, authors Gary A. Tobin and Aryeh Weinberg found 21% of the total dollars from the 56 largest Jewish foundations went to Jewish organizations. The report listed the Mandels’ foundations as giving more than 75% of their total dollars to Jewish organizations, a higher percentage than all but six other foundations.The brothers, three of the four children of Rose and Simon Mandel, credit their parents and especially their mother for the values that shaped them. The parents, who emigrated in 1920 from Novasanz, Poland (near Krakow), had a small dry goods store until about 1930, but Simon became ill and died at 57. His children, though, enjoyed much longer lives; the oldest, Miriam, recently died at 101, and Morton Mandel at 89 is the youngest of the three sons.Their mother’s significant impact on their lives is explored in “The Mandel Legacy; Our Cup Runneth Over,” a video they commissioned in 2008 to help their successors better understand them.“We wanted people to know who we are, not just what did we accomplish or how much money we had,” said Morton Mandel, the family’s spokesperson. Future employees of their foundation and their private trust company in particular are going to wonder “Who are those guys?” he said. “If you want to know about Andrew Carnegie, maybe there’s a picture, maybe a book, but not a 20-minute video.”Succession was the focus of two recent announcements: Earlier this month, the Mandel Foundation-Israel announced that Varda Shiffer, a long-serving vice president, would become president. She succeeds Annette Hochstein, a founding member of the group who will continue to serve as president emeritus.In April, the Mandel Foundation announced that Brandeis University President Jehuda Reinharz would become Mandel Foundation president no later than June 2011. Reinharz, a foundation trustee, will be the first person to hold that title and will eventually succeed Morton Mandel as CEO.Mort Mandel: ‘We want to change the world’The following interview with Morton L. Mandel was conducted and condensed by Michael E. Bennett.Family and values: Brothers and best friendsQ: What was your family life like growing up in the Glenville neighborhood of Cleveland?A: I was probably 40 years old before I realized what a rich home I grew up in. The word poor never came up. We lived on a street where everyone was in the same economic situation as we were. No money, not poor, just enough. And, as I got older, I realized that our parents stood for the best in terms of values. They weren’t educated, but they were very intelligent. We are who they were.Q: What lessons did you learn from them?A: Our values came from Rose and Simon Mandel. My mother, who never had a nickel, was the “go to” place in our neighborhood when people needed $20 for something, like to buy a dress for their daughter. “I’ll pay it back as soon as I can,” they said. And her answer, “You don’t have to pay it back; you’ll do something for me some day. We’ll be even.” This was personal philanthropy, kept quiet. I don’t know where my mother got the money to do it. When we sat shiva after she died, people we had never seen came over. I didn’t know the impact she had.Q: Do you get along as well with your brothers in private as you seem to in public?A: My two brothers are my two best friends. They would each say the same thing, I think. I would attribute this close relationship to my mother. Family was really important to her. That was drilled into us. She taught not by what she said to us, but how she lived her life.I don’t think we ever sat down and said “How do we be close?” We’re partners in business. We’re partners in philanthropy. One-third, one-third, one-third in every gift we make. Each of us has a veto. If it’s not all three, it’s nothing.Q: What if you disagree?A: We have almost never had disagreements. Someone might say “Let’s go into seat covers for automobiles.” “No, I don’t think we should go into seat covers.” So that’s it. I’m sure we’ve had some disagreements, but that bucket is fairly empty.Q: How did you end up being the spokesperson?A: My brothers frankly are both exceptional. I think one of the reasons we worked so well together is we’re very different.Jack is the wisest person I’ve ever met in my life. I define wisdom as intelligent people learning from their experience. I would go see him and say, “You know, we’ve got this problem over here,” and he would say, “Well, why don’t you do such and such?” And, I’m not kidding you, that would be the answer.Joe is a marketing genius. Much of our success in the product lines was due to his innovation. When there was a hole in a product line or out in the market, he found a way to fill it.Neither of those guys had many pieces of paper on their desk. Managing was not something that they were into. And I just ate it up. I fell into the institution building part. And we were a good team.Q: Tell me about your education.A: I had an English teacher in high school who changed my life. She wanted me to go to college. I was thinking of going to work because we didn’t have any money to go to college. She said apply for a scholarship and that I’d get it because they like people who are well-rounded. So, I applied to Adelbert (now part of Case Western Reserve University) and got an academic scholarship. I went there for my freshman year, and in the summer after my freshman year, my brothers and I started a business, so I dropped out of school.I asked the dean to save my scholarship. I never went back. After I got out of the army, during which I had earned a lot of credits, I went to Adelbert and asked what it would take for me to get a degree. They said if you take 16 hours of chemistry, we’ll give you a bachelor’s degree. So, now I’m in the auto parts business; they want me to take 16 hours of chemistry. I didn’t do it. I have nine honorary degrees, but I don’t have a college degree.Q: Is there any irony because of your grant-making emphasis in support of education?A: I think I made the right decision. No one has ever said, “I want to sell you a product, but by the way, are you a college graduate?” But would I have been better off? Yes, sure I would.I was going to write the great American novel. I was going to be a journalist. My declaration was a minor in education. I thought I would teach in order to eat, pay my rent, until I could write the great American novel. Had I grown up in a middle-class family economically, I would never have started the Premier Automotive Supply Co. We did that because we were broke. We did that because we wanted to make it. And making it to us was money.When I was a kid, I had worked [at the old Stadium] selling Coca-Cola, hot dogs, peanuts whatever they needed. That was a very important experience because I used to come home and give my mother the money. It would be a dollar and a half, two dollars – in those days, that was a lot of money. And I didn’t know it, but I figured out later that being able to do that did something to my sub-conscious. I became more of an adult, a “man” in quotes, when I was 13 years old. Here I was, not buying chewing gum and popcorn, but giving my mother money which she needed to run the household. I never recall discussing that when I was 13, but looking back, I’m sure that was a formative event. I’ve worked from the time I was 13. I even worked on Saturdays, selling men’s clothes.Q: What about your family today?A: I have three children. We’re a very close family. We see each other all the time. (Combined, Jack, Joe, Jack and Mort account for seven children, 14 grand-children and 13 great-grandchildren.)Jewish community: ‘We have a future’Q: Why the commitment to Jewish causes?A: I’m not sure that I really understand it. I believe it’s from my parents. Being Jewish meant a great deal to them. They got a tremendous amount of good feelings and life enrichment and meaning. They grew up in Europe in a shtetel where everybody was poor, except on Friday night. It was a beautiful story of how the Sabbath just filled their lives. And the rest of the week was just street cleaning again and farming.My parents brought that with them here. They were very pious and very religious, very loving. So that’s part of me and my brothers.After I was bar mitzvah, I wasn’t that observant. But being Jewish is very important to me. Being concerned with the future of the Jewish community is very important to me. We’ve lasted 3,000 years. I want us to last another 3,000 years. I think there’s something very special about being Jewish.I’m in awe of the Jewish accomplishments. And I want to keep that going. And the same thing with Israel. I see Israel as being a very important part of being Jewish, no matter where you live. We need Israel; Israel needs us. Not just as a refuge in case there’s another Hitler, but for all the things it stands for. There are bonds between us that I hope will get stronger.Being active in the Jewish community has also been very important to me. But not to the exclusion of CWRU or others. The scholarship they gave me has been paid back many times. And I do it with pleasure. They changed my life in a way.Q: What about the general community?A: We’re very, very involved members of the Jewish community but also involved members of the general community. Cleveland belongs to every Clevelander. So working in Cleveland and for Cleveland was always part of what we did, as well as working in the Jewish community. I was part of Federation; I was part of United Way. To this day, I’m active in the general community. To this day, Cleveland is my town.Q: What about the future of the Jewish community, worldwide and in Cleveland?A: Identifying with the Jewish community and what it is all about can add meaning to your life. I really believe it’s added meaning to mine. But there are people who are drifting away from the commitment to Israel, seeing Israel as a foreign country as opposed to part of the Jewish people.But I’m an optimist. I think we have a future. I think the Jewish community, while it may not increase, will retain its vitality, its leadership position in the national and international Jewish community and in the larger Cleveland community. People survive and innovate. There’s a lot of good going on in Cleveland and in the Jewish community.Q: What’s the future of the Federation?A: The Mandels made a real investment in the Federation because we believe in it. It’s not just a new building; a strong Federation is essential to the vitality of the Cleveland Jewish community.I know that young people growing up today are different than I was. Society is much more open. I believe Federation and other organizations slowly redefine themselves. The future of a central Jewish coordinating, community-building organization is bright; it just means in 10 years, we will look a little different.Q: What about the focus on Jewish education?A: My getting into Jewish education in the ’80s is quite a story, because my own Jewish education was not all that good. I went to afternoon Hebrew school that was not well run. I got virtually nothing out of it.When I was president of the Council of Jewish Federations (a predecessor of the current Jewish Federations of North America), I went to a board meeting of the Jewish Agency for Israel, and they said, “We are concerned about Jewish communities around the world; we don’t like the way they’re going. We’re going to create a fund to stimulate Jewish education and strengthen Jewish education in communities around the world.” I held my hand up, and I said, “I flew 6,000 miles to come to this meeting. If that’s your agenda, I’m proud to be a member of this board.”Two weeks later, I get a phone call … I later headed a steering committee, and I found out that Jewish communities were in a state of disarray and that the trend lines were going in the wrong direction, and we felt that the best shot was through Jewish education.So, since 1982, I’ve been heavily into Jewish education. Not as a pious, religious Jew wanting to observe the mitzvot. I’m fine with that. But I want to enhance the likelihood that the Jews will be around 3,000 years from now. That’s my motivation.Q: What are some ways you’re addressing the situation?A: We’ve got the Mandel Center for Studies in Jewish Education at Brandeis, where we’re building an academic base. There were no professors of Jewish education. There were professors of Jewish studies. Now there are professors at the academic level.In 1982, if you had gone to the big 20 federations in America, Jewish education would have been probably almost at none. The big drivers were the state of Israel, which I’m for; getting the Jews out of Russia, which I’m for; and helping people in need, which I’m for. You go to the same Federations now, you’ll find Jewish continuity at the top of the list. We helped move that.In Cleveland, you’ve got the Fund for the Jewish Future, which is only for Jewish education. You’ve got probably one of the best central bureaus of Jewish education in America (The Jewish Education Center of Cleveland). The lay people are superb; the staff is superb. If we could replicate that in every city, that’s what I’m trying to do. We’d have a better shot at survival.Philanthropy: focus on key areasQ: How did you get started in philanthropy?A: We formed a foundation in 1953. Our business was quite successful. Successful is when all your bills are paid and you have a couple of thousand dollars in the bank. We’ve always had that.We saw some years are better than other years, and our lawyer said, “Why don’t you form a foundation because that way you can put money in it in a good year, and in a tough year, you don’t put it in.”We’ve been giving our money away ever since. Not just to give our money away, but to help. That’s what was inserted in us by the way our parents, especially our mother, behaved.Q: Why don’t you entertain requests for grants?A: We decided to aggressively find areas that we’re interested in that mean something to us and focus on them. So we have four or five areas that are 90% of the grants. The other 10% is what my brothers and I do for our friends.In terms of our focus, it’s leadership, management of nonprofits, neighborhood urban renewal, Jewish education, and Israel. I’m for the environment; we just don’t fund anything in the environment. I’m not against cancer research; we just don’t fund it. We put all of our resources into these buckets.We want to change the world with our buckets. With the rest of the gifts, we want to be good citizens. But, we’re serious about the buckets. And frankly, I think we’ve moved the needle in every area in which we’ve been. For example, the Mandel Leadership Institute in Israel has 450 graduates all over the world, changing the reality. That’s an accomplishment.Q: Some questioned your gift for the Federation building as steering its decision to leave downtown.A: To the best of my knowledge, we’ve never put strings on a gift. We’ve never said, “We’ll give you this if you do this.” Obviously they want to please a donor, but it’s never been, if you want this money, do this.For Federation, we never told them if you want our gift, you have to move. The reason we made the gift was so they could move. I was for their moving, because they were using the JCC for their board meetings or other facilities and they were meeting downtown very rarely. When the (Euclid Ave.) Federation building was built, it was a different time. Everyone was going downtown.There was a small and sincere group that was against the move. The right to object is good – this is a free country – but I stayed out of it, although when the final board meeting was held, I got on the phone and cast my vote. I was very sorry about the tension.Q: What about funding most of the JCC renovation?A: This is a tough time; people were hurt. Normally, we wouldn’t give the whole thing, even if we had the money, because when you get it free, it’s not the same. We held back 10% at the JCC because we wanted them to have ownership, so the JCC is going to raise $1.5 million. When the Federation building came along, we sat around the table and said we’ll do the same thing.We want the Jewish community to thrive and succeed. We can afford it, so we dropped a principal that we never give 100%. But they’re going to raise more money and will actually be able to build their endowment funds.Q: How do you feel about your philanthropy being less quiet these days?A: I’m OK with it, but I’m more comfortable on the quieter side. It’s just the way the world works. For years we kept a very low profile, intentionally, and we were very comfortable with a low profile. In the last 10 years, we started giving big gifts. And the big gifts carried with it names.Q: What do you think about the discussion lately of philanthropists being “social entrepreneurs”?A: I’m not sure I get it. We find causes where we think it’s important; we try to make a difference. Maybe we are social entrepreneurs, but we don’t call ourselves social entrepreneurs. We started Neighborhood Progress Inc.; we started the Mid-Town Corrider; we started the Foundation Advisory Committee at Federation. I bet there are 13 or more 501(c)(3)s started by the Mandels. I think we’re social entrepreneurs; we just don’t go around making speeches about it.Q: What about the “Giving Pledge” Bill Gates and Warren Buffet are using to encourage mega-philanthropists to give away 50% of their wealth before they die?A: The people who are doing it are very serious. My brothers and I will probably end up doing more than that, but it doesn’t feel right to me to stand up and take a pledge.On business: ‘It’s all about who’Q: What’s been your key to business success?A: We probably stumbled on it. I’m writing a book; I don’t know if it will ever get published. The title is It’s All About Who. We learned a long time ago that leadership was the key to success in any endeavor. And that having a high bar for the people who work with you or for you would pay very rich dividends. So go for the best; go for people who really represent the biggest talent you can find.The one thing we noticed the most at the beginning was the cost; it’s a big investment. But we learned at the end of the assembly line, the profit was bigger.We developed our slang for workers: As, Bs, and Cs. Most jobs are filled by Bs. Bs are good, but As are great. So we were able to retain, hire, attract and retain our share of As. And I think that’s the single most important decision we made in our business career. We followed that ever since in our philanthropic activities as well and really invested in leadership.Q: Why did you start a business in Israel?A: About five years ago, we decided we’re Zionists and we want a stronger Israel. We want to do everything we can think of within reason to make that happen. We’ve resisted going into business there because we wanted to concentrate on trade in Israel and philanthropy. But we decided to go into business and be model employers. We formed a company, Israel Equity Limited, and bought two companies.One was Phoenica Glass Works in Yerucham, an 80-year-old, beat up, money-losing manufacturer of glass products, bottles mainly. We cleaned it up, fixed it up, made it a high-tech company in how it’s run. We became a high-quality employer, changed working conditions, changed the relationships with the unions, which had been enemies and now are friends. Our customers get better service, and we’re making money.We also want to be good neighbors, so I invited the mayor for coffee. I told him we have 300 people living in your city, and we’d like to help you make it a better place. And I said what I’ve said a thousand times: “Healthy companies don’t flourish in sick communities. Healthy companies stay healthy in healthy communities.” So we helped him change the math curriculum in their public school system. We set up a computer center and we’re giving them an annual grant.I was at the company recently, and our CEO tells me the union wants to have a little ceremony. I figure OK, they want to tell me they appreciate we just remodeled the cafeteria.So I go outside, and this has never happened in my entire business life. We have a garden that used to be dirt, and in the center, they had an oval with kind of a brick border. In the center they had planted a young olive tree – about 7 or 8 feet high. And they had a plaque made by a local artist that said something like “In appreciation to Morton L. Mandel, by the union employees of Phoenica Glass Works.” Afterwards I said to the boss, “Who paid for that?” He said the workers did. That’s never happened to me.I’ve had good relationships with unions. At Premier, we had nine unions, and I knew them all and got along fine, but no union employees have ever planted a tree in my honor with a plaque.Q: With all your trips to Israel, do you have a house there? I have two places in Israel: the Tel Aviv Hilton and the King David Hotel in Jerusalem. I stay in the same room at the King David, and I try to stay on the same floor at the Hilton. I leave clothes in Israel because I go over with a briefcase. But in our case, we find it simpler to stay in a hotel than worry about all of the things you do when you have a house. We also have offices in Jerusalem and Beersheva.Q: Do you get away from business to relax?I’m always relaxed. My entire career has been stress-free. It isn’t that we haven’t had issues, but we’ve never had financial stress. That’s the big stress that kills a lot of people. And the other stress is people problems, and we’ve never had those, either.We’ve never had any partners. We went public in 1960, but we kept 70% of the stock. We always ran it. And we’ve always been on top in what we’ve done.I love what I do. I love the business game and the way we play the game by the rules of Western civilization: honesty, decency, ethics, integrity, always do what’s right, treat others the way you would like to be treated.And I love what we do in our philanthropy. And I love the people. There’s a culture, frankly, a rich culture, in Mandel-related enterprises. To my eyes there’s a sense of decency and respect in this place and in anything I can associate with. And that produces less stress, less aggravation.Q: What do you hope to leave behind?A: We call our legacy video “Our Cup Runneth Over.” It does. So what do I do to relax? I kvell. That’s going to sound terrible, but I’m having a good time. It’s not a function of money; it’s a function of values. And if you’re doing your best and you’re satisfied with yourself, you’re rich.