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Peter Lynch’s Guide To Philanthropy

By Michael Paulson, Globe Staff February 27, 2005

Peter S. Lynch has more money than most people can imagine, but these days he’s spending his time on the phone, dialing for dollars.

Best known for the spectacular returns he generated during 13 years as manager of the Fidelity Magellan fund, Lynch now focuses much of his energy on philanthropy.

He is working both sides of the fund-raising world, not only giving away large sums of money, but also raising money for the Inner-City Scholarship Fund, a program of the Catholic Schools Foundation that provides scholarships to low-income children attending urban Catholic schools in the Archdiocese of Boston. Lynch has been chairman of the fund for 14 years, helping to raise more than $55 million for scholarships.

In a recent interview, Lynch, 61, described his philanthropic strategy, and offered suggestions for others who are thinking of giving or raising money.

Lynch, who continues to work as vice chairman of Fidelity Management & Research Co., the investment adviser arm of Fidelity Investments, said he views philanthropy as a form of investment. He said he prefers to give money to support ideas that he thinks can spread, such as First Night, the New Year’s Eve festival that began in Boston in 1976 and has inspired similar events in more than 200 other communities, and City Year, a community service program founded in Boston in 1988 that now operates in 14 locations.

“You can almost call it a growth stock investment, or venture capitalism,” Lynch said. “A lot of the problems with needy children, and healthcare problems, they’re not just in Boston, so if somebody has a really good way of dealing with it, you’d like to pick it up and go with it to the other 250 major cities.”

But Lynch and his wife also support local causes. Lynch’s wife, Carolyn, who oversees the family foundation, said the couple is excited about a new skateboard park being planned along the Charles River, and was happy to support a small park in Dudley Square.

“We also try to be good members of our community, so some grants are specifically for Boston,” she says.

The Lynches give money primarily in five ways: as individuals, through the Lynch Foundation, through a Fidelity Charitable Gift Fund, and through two charitable trusts.

The Lynch Foundation, which had $74 million in assets in 2003, supports education, religious organizations, cultural and historic organizations, and hospitals and medical research. From 1998 to 2003, the foundation gave out $20 million in grants. In 2003, the largest recipients were Boston College and the Catholic Schools Foundation, which each received $1 million, but the foundation also gave a large number of smaller grants to a variety of organizations, from the Plymouth Antiquarian Society to My Brother’s Table, a Lynn soup kitchen.

Lynch cites his father’s death when Lynch was 10 as a source of his concern for others; the family’s changed financial circumstances forced Lynch to transfer from a private Catholic school to the local public school in Newton. He says his religious faith plays a role, too, citing Jesus’ comment that ’love your neighbor" is one of the two most important commandments.

In choosing charities, Lynch says he looks for innovative ideas and strong leadership. Many of the charities he supports were introduced to him by friends, but, he says, just as with stock-picking, “if somebody says, ’I think this charity is fantastic,’ you take a look at it, but then it’s up to you to decide.”

Lynch says he accepts the possibility that some charities he backs will not succeed, often because of management or financial challenges. “I wish all my stocks went up, too, but that’s not the way it works,” he said. “As long as the good ones offset your losers, the math works.”