Slim's Big Giveaway
What do you do if you are Mexico's most powerful businessman and a lightning rod for criticism? You give away a lot more of your money. That's what Carlos Slim Helú plans to do—this year and probably for the rest of his life. The telecom, retail, and industrial billionaire certainly can afford it. His net worth, estimated at $54 billion, has soared about 66% in the past year thanks to the performance of his companies on Mexico's booming bolsa. That means Slim, 67, may now be the world's richest man after Bill Gates.
Like any powerful industrialist nearing his twilight years, Slim wants to build a lasting legacy. Following the example of Gates and Warren Buffett, the Mexican tycoon thinks philanthropy is one way to make a difference, not only in Mexico but throughout Latin America. For the past 10 years, Slim's best-known charitable work was done through his telecom company's Telmex Foundation, whose $1.2 billion endowment makes Telmex the region's largest corporate giver. But Slim is expanding the activities of his family charity, the Carso Foundation, after more than doubling the size of its endowment last year, to $2.5 billion. "I'm not just giving away money. I'm channeling resources to try to solve [health and education] problems as quickly as possible," he told BusinessWeek in an interview at his office in a Mexico City mansion filled with antique books and baseball memorabilia.
Yet Slim may have reasons besides good-heartedness to throw open the philanthropic taps. Such a gesture could deflect pressure from new President Felipe Calderón as he launches a campaign to rein in some of the powerful companies that dominate telecommunications, cement, beer, tortillas, and other industries in Mexico in a bid to spur competition and growth.
Slim's empire, which accounts for nearly half of the Mexican stock exchange's $366 billion value, is an obvious target. Telmex, which is 49.1% owned by Slim and his family, controls 90% of Mexico's phone lines and charges among the highest fees in the world, says the Organisation for Economic Cooperation & Development. Rivals such as Spain's Telefónica Móviles (TEF ) complain that Slim's wireless giant, América Móvil (AMX ), has thrown its weight around to grab 72% of wireless clients in Mexico. The government plans to take a harder look at several sectors that need more competition, including telecom, says Economy Minister Eduardo Sojo. "A country like Mexico, with such an unequal distribution of wealth, needs much more strict regulation to promote more competition," he notes. Slim skeptics argue that his charity is politically motivated. There's "a growing public consensus that Slim's attempts to block competition are hurting the Mexican economy," says Denise Dresser, a political science professor at the Autonomous Technological Institute of Mexico in Mexico City. "He wants to ward off those criticisms."
Not everyone looks at Slim's initiative critically. Some think his charitable efforts could inspire other wealthy families in Latin America, where large-scale philanthropy isn't common. In Mexico, for example, there's no estate tax, so there's much less incentive to give than in the U.S. "It's great that the Carso Foundation and others are growing in Mexico because we need to encourage charitable giving," says Jorge V. Villalobos, president of the Mexican Center for Philanthropy.
After years of sitting in his former windowless basement office plotting his companies' growth, Slim insists he wants to devote nearly all his energies to philanthropy from now on. He has turned full operating control of his business empire over to his three sons—Carlos, 40; Marco Antonio, 38; and Patrick, 37. In coming weeks, Slim plans to announce the creation of three new charitable institutions that will focus on health care, recreation, and education in Mexico, where about half the population lives on less than $2 a day. The new groups, to be run by the Carso Foundation, will fund everything from childhood vaccinations to cancer research to teacher training. Programs will be created to improve medical services in rural areas and encourage community sports activities. The foundation plans similar initiatives in the 14 Latin American countries where Slim's telecom companies operate. "We are serious about this," Slim says. "We will make sure enough resources are available for anything that needs to be done."
In its 10-year history, the Telmex Foundation has already pioneered groundbreaking programs for Mexico's poor. It has handed out 95,000 bicycles to impoverished children who live more than a two-hour walk from school and has given nearly 70,000 pairs of eyeglasses to schoolchildren. It has paid the costs of more than 200,000 surgeries for low-income Mexicans and bailed out more than 50,000 first-time offenders jailed for petty crimes committed largely out of economic hardship. The Telmex Foundation has also awarded scholarships to more than 150,000 university students.
Up to now, the Carso Foundation, created 20 years ago, has kept a low profile. It quietly supported hospitals and a kidney-transplant center—Slim's wife, Soumaya, died of kidney disease in 1999. It established an archive of valuable Mexican historic documents and books worth an estimated $300 million, plus a museum to which Slim donated his $100 million art collection.
Now, with its bigger endowment and three new institutions, the foundation is expected to have a bigger impact. It recently started refurbishing 1,000 public schools around the country and plans to help the government distribute low-cost laptops through the Massachusetts Institute of Technology Media Lab's One Laptop per Child program. It will help hundreds of thousands of teachers buy their own PCs and subsidize their Web connections.
Even this program could spark controversy since Telmex will sell the computers via monthly financing and provide Internet service partially paid by Carso. That has given rise to criticism that Slim's charitable giving is aimed at benefitting his own companies. "I don't care what people say," retorts Slim. "What's important is that as many people as possible get connected to the Internet so they can be more productive." No doubt he also hopes the government is listening.
By Geri Smith