Saturday, April 21 , 2018, 10:09 pm | Fair 56º


Steven Crandell: Anne and Michael Towbes Give Away the Secrets of Their Philanthropy Philosophy

Anne Smith Towbes is vivacious. Michael Towbes is thoughtful. Anne loves people and the spontaneity of the moment. Michael likes alone time and the chance to thoroughly understand a situation before acting.

Anne is a singer, a former drama teacher, a natural networker. Michael is a real estate developer, a banker, an engineer and an extraordinarily successful businessman.

But their outward differences mask a deeper unity. That’s their first giving secret:

» Secret #1 — Anne and Michael Towbes succeed in philanthropy by harnessing their different styles to serve the same giving agenda.

Last year’s planned gift of $5 million to The Granada Theatre (Santa Barbara Center for the Performing Arts) brought the total the pair has committed to the local nonprofit organization to more than $15 million.

And The Granada represents only a part of their giving.

The Towbeses focus their philanthropy on supporting the performing arts and education — especially working with young people. But these parameters are not the way to understand their giving. Instead, think about service and fulfillment.

Michael speaks of his motivation this way:

“I think people who have the means to be philanthropic have an absolute responsibility to give back to the communities where they live. It’s been one of my goals. Most of the things that we do are for local organizations. It’s because of the community and what they have brought into my life that I’m able to do these things. So I think it’s important to give back.”

Anne says:

“It’s just so much fun ... I receive certainly as much as I give, if not more. I just like to give to people who are doing great work so that they can continue to do that great work. It gives me great joy.”

Responsibility. Fun. The motivations seem quite different. But with Anne and Michael, these seeming opposites have a way of integrating to make a more effective whole. Responsibility becomes fun. And fun serves responsibility.

Their verdict on nearly 10 years of giving together:

“Pretty seamless,” Anne says.

 “Pretty easy,” Michael adds.

Oh, and yes, they did get married for reasons other than their philanthropy. I understand they love to travel together, to dance and to attend the lively arts as a couple. No prize for guessing their favorite venue.

                                                                 •        •        •

“He doesn’t take money out of the bank. I don’t know if people know that.
It’s not like he’s paying himself a huge salary every year. ...
We pay him a stipend as chairman of the board. We pay the income taxes ...
Other than that, all the money stays at the bank.
And that’s what allows us to be able to give it away.”

Janet Garufis, president and CEO, Montecito Bank & Trust

» Secret #2 — Give away money as you make it.

Many Santa Barbarans know Michael Towbes is the founder of Montecito Bank & Trust, but only a very few know that he changed the ownership structure of the bank so he could give more money to nonprofits.

When Montecito Bank & Trust marks its 40th birthday this month, the staff will celebrate by giving away money. (Sorry to disappoint you, but the recipients will be local nonprofit organizations, not the general public.) And no, this is not Community Dividends, the $1 million annual cash cornucopia the bank funds and that has swelled nonprofit coffers by $12 million since it began in 2002.

No, this is what the bank calls its Anniversary Grants. Starting in 1993, the program allows bank employees to choose 10 local nonprofit organizations for special grants.

Both giving programs make the bank extraordinary.

This is how Michael tells it: “As the bank grew and we became more successful, we converted the bank — after I became the sole shareholder — to an S corporation, which meant the donations could be made through the bank and ... the deductions would flow through to me ... You know you can’t take it all with you. And I thought it was a great way of engaging the community, maybe encouraging other organizations to do it.”

Janet Garufis, who’s led the bank as CEO for 10 years, puts her boss’ unusual approach in context.

“In other situations where you have family-owned organizations, typically they are taking dividends out every year because it’s supporting their lifestyle,” she said. “But this bank does not support Mike’s lifestyle. It supports his compulsion to give.

Garufis says Towbes had originally planned to sell the bank to pay his estate taxes so his real estate company would be able to continue after his death. But he changed his mind because he wants “the bank to go on as long as it possibly can go on, serving the community the way it is serving it.”

                                                                 •        •        •

“Anne is one of the five most genuinely angelic people on the planet.
She’s in the position to bless people’s lives and she does it every day ...
But I never had any sense that Anne had any entitlement.
Whether it was the person who cleaned up the station or parked her car
or whatever, she was equally gracious and wonderful to everybody.”

— Byron Elton, former general manager of KEYT

» Secret #3 — Get personal.

Most people in Santa Barbara’s nonprofit world know Anne Smith Towbes has served volunteer leadership roles with a number of nonprofits, from the Lobero Theatre to the Santa Barbara Foundation. Few know she prefers the more personal connection of giving with others and encouraging the personal growth that comes through mentorship.

She loves the “shared philanthropy” she experiences with the Women’s Fund of Santa Barbara. She’s hosted the Fund’s donors for the last two years for lunch, and while they eat, they also engage in some collective giving. The women discuss nominated organizations and then vote on those they want to receive the fund’s money.

“It’s just so much fun to have all those like-minded, good-hearted people in one place,” Anne says.

She also credits Byron Elton, who was general manager at KEYT in the late 1990s, for getting her involved with mentoring. Elton came up with the idea for the Mission for Mentors telethon, which aims to raise volunteer hours rather than cash donations. At the time, Anne and her late husband, Bob Smith, owned KEYT. They loved the idea of encouraging volunteerism. And they were already supporting the Unity Telethon, which raises money to provide basic necessities for local low-income families.

“What struck me was how committed Bob and Anne were to the community,” says Elton, who now is board chairman of the energy company Carbon Sciences. “I had been around a lot of TV stations, wonderful people, but nobody had that kind of personal commitment to the community.”

The dedication to supporting mentorship has continued. Just last month, Anne served as honorary chairwoman for the fourth annual Gratitude Luncheon benefiting the Fighting Back Mentor Program run by the Santa Barbara Council on Alcoholism & Drug Abuse, or CADA. Fighting Back is a school-based program that matches area youth with adult mentors who provide academic, social and emotional support.

“This luncheon was to raise money to allow more mentors to be trained and more mentees to be served,” Anne says. “And it just makes you feel good to see the ongoing-ness of a project that started out small.”

Now under different ownership at KEYT, the Mission for Mentors telethon — which also benefits CADA’s Fighting Back program — has remained a fixture on the charity calendar. Last year, the telethon helped bring to the program 70 new mentors, representing a total of 3,640 hours of mentoring.

                                                                 •        •        •

“One of the reasons that I’m so supportive of education
is it’s something you have all your life. You can’t take that away from people.
And there aren’t too many things you can give to people
that are good for a lifetime.”

— Michael Towbes

» Secret #4 — Scholarships can become relationships.

Both Anne and Michael have been funding scholarships for years. (Michael served on the founding board of the Scholarship Foundation of Santa Barbara back in the 1960s.) The couple say they find it remarkably rewarding — especially when they get to know the recipients of the scholarships.

Michael started the Louis H. Towbes Graduate Fellowship at UC Santa Barbara 25 years ago. Every year he picks a student in a graduate school to support. And every year, he hosts a lunch with that student and any of the other Ph.D. students he sponsors who are still working on their doctorates. 

He also has a program at the Scholarship Foundation that awards a four-year scholarship to an exemplary high school student from the community. Every summer these students return from college, for at least four years, he takes them out to lunch.

“It just gives me a lot of pleasure to spend some time with these kids,” he says. “Give them advice from time to time. Listen to what’s going on in their lives. It’s very personal.”

Some of these students he’s continued to stay in touch with after college graduation. He says they have gone on to successful careers.

Anne has a scholarship she sponsors, too.

“My late husband, Bob, and his friend, Herb Simon, set up a scholarship in honor of Bob’s mother. It’s called the Sara Smith Drama Scholarship at (Santa Barbara) City College ... We have a monologue competition. And I’m one of the judges ... The kids perform for us. And we decide on 10 (recipients). It makes a big difference for the kids.”

                                                                 •        •        •

“My late mother-in-law (Sara Smith) used to say,
‘The more you give, the more you have to give.’
Just the philosophy of abundance. Whether you have the money or not,
(if) you have the time and the inclination, that’s abundance.”

— Anne Smith Towbes

» Secret #5 — Encourage everyone to give.

Since its founding in the 1960s, The Towbes Group has developed more than 6,000 residential units and 1.4 million square feet of commercial properties. Most people in the tricounties have heard of one of their developments. But few know that The Towbes Group, like Montecito Bank & Trust, sees philanthropy as part of its reason for being.

Like the bank, The Towbes Group gives grants to nonprofits chosen by its employees.

“We manage about 2,100 apartment units,” Michael says. “And we have a program where every time we rent an apartment, we make a $25 donation. We just had a ribbon cutting in Santa Maria and we gave the Good Samaritan Shelter up there about $12,000 from the $25 per unit (fund). And we do the same thing in Santa Barbara and Ventura ... Every time a new tenant moves in, we set aside $25.”

“It’s called Give Where You Live,” Anne says.


I think I see a pattern emerging here.

Only part of Michael and Anne’s philanthropy is giving. Another big part is encouraging others to give.

“(Michael says) everybody can do something,”  Garufis told me. “Not everyone can do a million or needs to do a million. Some can do more. Some can do less. The point is, that you’re doing something, you’re giving something back. The community that gave you the opportunities that you have, you are supporting it in ways that you can.”

Both Anne and Michael have committed themselves to lives of generosity. And nothing teaches like a good exemplar.

“Over the last several years as the economy was so terrible,” Garufis says, “Michael wanted to make sure that we (Montecito Bank & Trust) continued to do the $1 million every year. And the bank didn’t ever lose money during the recession, but we certainly weren’t as profitable as we had been in the go-go years ... But no matter what, he was committed to doing that million dollars.”

                                                                 •        •        •

“Angels can fly because they take themselves lightly.”
G.K. Chesterton

» Secret #6 — Time is as valuable as money.

A sense of purpose need not steal one’s sense of humor.

Anne began our interview in this way:

“I was a candy-striper when I was a young teenager and I used to visit the elderly at hospitals. I have this thing for older people. Now I have a really big thing for an older person.”

At this point, both she and Michael looked at each other and began to laugh.

Anne was referring to the fact that Michael is 85 and she is not yet 85.

But to this observer, age seemed irrelevant in the face of their obvious enthusiasm for the life they lead together.

Anne’s candy-stripe volunteering was only the start of helping others through her personal efforts. It’s a practice Michael shares. He’s been a guiding light on the boards of Santa Barbara Cottage Hospital and the Santa Barbara Foundation for decades, and still remains involved in key financial strategy at both institutions. However, his volunteer work began because it was the only way he could contribute.

“I think giving time is as important as giving money,” Michael says. “When I first came to Santa Barbara, I didn’t have a lot of money to give, but I’d only been here a couple of years when I joined the Montecito Union School board, got involved with the MS Society because Gail (his late wife) had MS. At the beginning, my contributions were mostly time and then as I was in a position to do more financially, I’ve done that.”

                                                                 •        •        •

“I think donor-advised funds are the greatest thing since sliced bread.”
— Michael Towbes

» Secret #7 — The “charitable savings account.”

Most philanthropists who run their own private foundations don’t need other vehicles for giving. But Michael, who started the Towbes Foundation 35 years ago, loves the idea of donor-advised funds.

“They’re terrific because you put the money in there when your tax situation says it’s a good time to do it – or for other reasons — and you spend it when you want to ... It’s a good way to give the money and then think about where you want it to go.”

The National Philanthropic Trust likens a donor-advised fund to “a charitable savings account ... (allowing) donors to make a charitable contribution, receive an immediate tax benefit and then recommend grants from the fund over time.”

Other advantages come because the contribution can grow tax-free as the donor thinks about where he or she wants to give. A significant disadvantage is that once you put money into a fund and take your tax break, the money is no longer yours. You have given it to an organization (usually a 501(c)(3) nonprofit) that then promises to follow your instructions — as long as you want to give the money to another 501(c)(3) nonprofit.

These restrictions don’t bother Michael in the least. Both his daughters, Carrie and Lianne, already make decisions about what to support with a certain amount of the Towbes Foundation grant money. In addition, he’s started separate donor-advised funds for them through which they can identify other nonprofits they wish to support.

“I chastise them if they are not giving it away rapidly enough,” he says. “I keep saying I’ll put more in if you give away what’s in there.”

Anne also has a donor-advised fund.

“An aunt of mine allowed me to establish it when she passed away,” she says. “She gave each of the nieces a chunk of money to give out to our favorite charities, including the University of Michigan, where she went. So I’m able to give out smaller amounts to things that speak to my heart. And Michael’s been helping to keep the fund going.”

The Santa Barbara Foundation is one of a number of organizations in which people can start a donor-advised fund.

                                                                 •        •        •

“I have a mantra — when people say why do I keep so busy,
I keep saying that, well, we are all in this together.”

— Anne Smith Towbes, receiving Santa Barbara’s Woman of the Year award in 2013

» Secret #8 — Find your passion, make it public.

I asked both Michael and Anne if they had advice for people interested in giving — not necessarily wealthy folks, but anyone who felt like being of service to others. This is what they said:

Michael: “Start. Even if you have to start in a small way. I firmly believe that philanthropy close to home is the most rewarding because you can more easily see the impact of what you’ve given. Most of the philanthropy that we do is for organizations in Santa Barbara or the tricounties just because we have a better idea of how the money is spent and how it’s being used.”

Anne: “Find your passion — something that really speaks to you — and find the right organization that might help you express that. I think you really have to have a heart connection to make the time the most valuable to yourself.”

Both Michael and Anne have sense of discovery when it comes to their giving.

Anne talks with wonder about how one positive experience or relationship leads to others.

“It just keeps opening up,” she says with a smile.

For Michael, giving is an act of citizenship as well as adventure.

“You know, you have a choice in philanthropy — of doing it anonymously or publicly. I’ve chosen to do it publicly ... People say, well, I don’t want to do anything like that because then everyone will ask me for money. My answer is: So what? You don’t have to support every organization, but there may be some out there you don’t know, that you would like to support. And if they come to you, you have a new opportunity.”

— Author and writer Steven Crandell helps integrate story and strategy for organizations, with nonprofit foundations a particular focus. “Thinking Philanthropy” aims to provide practical, thought-provoking ideas about giving. This article was cross-posted on Tumblr. Steven can be contacted at [email protected], or follow him on Twitter: @stevencrandell. Click here for previous columns. The opinions expressed are his own.

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