In Business--and Philanthropy--His Goal is ROI

Harold Grinspoon has a definite economy with words.

He summons them slowly and carefully, and expends them as if they were a natural resource not to be wasted. But he's efficient, and he gets his points across in a remarkably succinct fashion.

Indeed, when asked about his basic approach to commercial real estate, a realm in which he has amassed a fortune and secured a reputation as a master at identifying undervalued properties and seizing opportunities that others may not recognize, he paused and said simply, "it's all about getting return on investment."

Grinspoon, founder and CEO of West Springfield-based Aspen Square Management, would use these same words again later when asked about his thoughts on another area in which he's known internationally--philanthropy--and how he's chosen the directions for the more than $100 million he and his wife, Diane Troderman, have given to date.

"When you're making the money, you want return on investment, and when you're giving it away, you want return on investment," he said of work that has come in two primary areas--promoting the Jewish religion and culture (a broad challenge to which most of his efforts have been directed) and inspiring entrepreneurship--and is carried out through the Harold Grinspoon Foundation, created in 1993, and the Harold Grinspoon Charitable Foundation, launched in 1986.

And while he acknowledges that, in both realms, measuring ROI is a much more subjective exercise than in business and especially real estate, he believes he's making a difference.

His PJ Library, as it's called, has given away more than 2 million Jewish-themed children's books to families across the country since it was launched in 2005. Born from his deep concern about the impact of assimilation on Jewish identity and inspired in many ways by Dolly Parton (more on that later), it uses the tagline "building a stronger Jewish people, one book at a time."

"My thought is that the Jewish people are in trouble," he said, then pausing for effect. "There's a roughly 50% intermarriage rate, and only 28% of the kids from these marriages grow up being Jewish. You don't have to be a genius to figure out what those numbers mean. So we provide Jewish books to Jewish kids about Jewish culture."

Meanwhile, his so-called Entrepreneurial Initiative (EI) was launched in 2002 with the goal of inspiring more young people to consider entrepreneurship as just one of many career paths they can choose.

"I wanted to encourage people to become entrepreneurs," he said of his inspiration for the program. "People become doctors, lawyers, and accountants ... I want them to know that they can also become entrepreneurs."

As he talked about his endeavors in the promotion of entrepreneurship, Grinspoon again demonstrated both his frugality with words and his ability to get to the heart of the matter quickly and directly.

When asked what he says to the young people he meets through his broad initiatives, he said simply, "I just applaud them."

For this, the latest installment of its Profiles in Business series, Business West talked with Grinspoon about how he's made his fortune, but mostly about what he's done with it, a pattern of giving back that is both inspirational and thought-provoking.

Buy the Way

But first, a few words about pilates.

Grinspoon, soon to turn 82, starts each day with a one-hour workout in this discipline designed to increase strength, flexibility, and control of the body. He said he's been doing this for years, and that the routines, which start promptly at 6:30 with an instructor, get each day off to a solid start.

From there, he moves on to 15 minutes of aerobic dancing, meditation for another 15 minutes, and then a vigorous, hour-long, 4.2-mile walk that takes him down along the Connecticut River; sometimes he'll conduct interviews or handle some business while doing so. By 10, he's in the office, dedicating 90% of his time, by his estimates, to his philanthropic endeavors.

As for the company, "42% of it is owned by the key employees," he said. "They run the business."

This is the enterprise that he grew from what could only be described as very humble beginnings--more specifically, the purchase some 55 years ago of a two-family home at 331 Springfield St. in Agawam (yes, he still remembers the address), accomplished with some financial help from an in-law.

"I think I paid $10,500 for it," he recalled. "I rented out one side to someone who paid me $75 a month, and I rented out two rooms for $10 a week, and I stayed in another room. That's how I got started.

"We used to do a lot of bird-dogging--calling people up to see if they wanted to sell property," he continued, while discussing how his venture grew from that inauspicious start. "There was one guy, who must have been elderly--he lived in Florida--who owned 11 properties in the Springfield area that he bought from the banks during the Great Depression and he wanted to sell. I think I gave him a couple thousand dollars down, and he took back the mortgages with a partial-release clause; that was a big start for me."

He and his partners would go on to acquire dozens of multi-family properties in Western Mass.,--mostly from other opportunists who had snapped them up during the depression and were now ready to sell off their portfolios--and eventually take his enterprise from local pursuit to national giant. Rather than talk at length about the growth curve, he took out a piece of paper and drew it instead; the line progressed at a very modest upward angle for several inches, then ticked up slightly for an inch or so, and then shot up at something very dose to 90 degrees, depicting Aspen Square's explosive growth in the '80s and '90s.

There are currently about 16,000 units in the portfolio, just over half the peak volume accumulated by mid-2006. That's when Grinspoon starting selling off properties after concluding presciently that some disturbing trends were soon to force the bottom to fall out of the nation's real-estate market and the bubble to burst.

"I saw it coming ... people who couldn't pay their rent were buying houses--act across the country that was happening," he said of the lending patterns that would eventually trigger the worst economic downturn since the Great Depression. "The U.S. government did a great disservice to the American people because they underwrote these mortgages knowing that people couldn't pay them. The U.S. government is responsible for this bust; it was all caused by real estate.

"In the old-fashioned days, when you went to a banker to buy a house, he'd want to see if you could pay for it," he continued. "Then, we went into collateralized lending where the banks and the mortgage brokers who sold this stuff up couldn't care less; no one had any concern about who was going to pay the loan back."

Getting Down to Business

Grinspoon said his success in real estate is a manifestation of entrepreneurial drive he believes he's always possessed. It was evident at Marlboro College in Vermont, from which he would eventually drop out, but not before gaining some valuable lessons in how to earn a dollar or two with some imagination and desire.

"There were 48 kids there, and there was no place for them to wash their clothes," he recalled. "I found this old Maytag washing machine with a ringer, and I put a quarter coin box in there; they paid for the electricity and the hot water ... there was no overhead. That was my first venture into entrepreneurship."

But, obviously, not his last. He would later sell ice cream out of a cart--he has something approximating that vehicle in the backyard of his home in Longmeadow--and later manage two fleets of ice-cream trucks. He would go on sell paper goods, among other jobs, before transitioning into real estate.

Today, his foundation is focusing some of its time and considerable resources to the task of promoting entrepreneurship among young people, with the broader, long-term goal of creating companies and jobs in a region that has a long history of organic growth.

Grinspoon said he and Diane often debate the subject of entrepreneurship and whether this is an innate talent or something that can be taught and encouraged. He falls into the latter camp, and stresses development of what he calls "creative skills," or the art and science of being able to see opportunities.

The EI has two main programs, both designed to encourage and applaud fledgling entrepreneurs. The first is something called the Spirit Award, so named because it is given annually to an individual who demonstrates entrepreneurial spirit. This year, it went to Hendelee Wilson, who has spent the past several years developing a product that will enable users to employ a cell phone or other mobile device to get a quick diagnostic check of their automobile, and is close to having it ready for the marketplace.

The second initiative is an annual elevator-pitch competition involving representatives of all the area colleges and universities. This year's winner was Lindsey Weaver from Bay Path College, who pitched her idea for a business called Polar EYES, a soft contact lens that provides outdoor UV protection, the power of polarization, and can transition from light to dark

At the annual awards ceremony, where the pitch contest was conducted, Grinspoon spent the night talking with students and providing doses of encouragement. Nearly a decade after starting the EI, he says it's achieving its main goals.

"Some of the people have gone on and done quite well," he said of participants in the programs. "The most important thing we do is support them; we support them and let them know that there's a big world out there and many opportunities for them. People ask me if there's the same opportunity in real estate today as when I started, and I say yes."

While measuring the impact of such initiatives is difficult, Grinspoon believes he is indeed getting return on his investment. And he feels the same away about his many projects to promote the Jewish religion and culture, including the PJ (short for pajamas) library.

The program, which gives away 75,000 books a month in collaboration with philanthropic partners in 145 cities across North America, is modeled after Dolly Parton's Imagination Library, which gives away 350,000 books a month through 650 philanthropist partners, including Grinspoon.

He showed BusinessWest a number of the titles distributed regularly, including In the Month of Kisliv, a Story for Hanukkah; New Year at the Pier, a Rosh Hashanah Story; The Brothers Promise, a story about Tzedakah, the Hebrew word meaning 'righteous giving'; and Let My People Go, which uses rhyming phrases to help children (age 7 is the specific target) better understand the events leading up to the Israelites' departure from Egypt.

Individually, and collectively, the books are designed to entertain and enlighten, said Grinspoon, and the program itself was created to draw attention to a problem and involve people in the solution. This is the common denominator for many of the Grinspoon Foundation's programs, which involve challenge grants to foster involvement and broader philanthropy.

Taking things one step further, one initiative, the B'nai Tzedek Teen Philanthropy Program, engages teens ages 12 to 18 to actively participate in philanthropy through fund-raising and fund distribution as well as community-service and social-action projects.

Overall, Grinspoon said that his pattern of philanthropic giving has pretty much mirrored that line he drew charting the growth of his business ventures. Most of it has come fairly late in life, and involves much more than simply writing checks.

"We want to give back to the community, and we want to inspire others to give back, too," he said.

Reading the Bottom Line

On one of the inside pages of a children's book Grinspoon loaned to BusinessWest is a handwritten note to the philanthropist from the group for which it was intended.

"Dear Harold: Thanks for making our Jewish libraries so rich," it said.

Like much of Grinspoon's own commentary, the missive was short, yet direct. And it spoke volumes, literally and figuratively.

With those few words, the writer conveyed thanks, but also a statement, that with this program Grinspoon was meeting the primary goal that has guided him in business and in his philanthropy getting a return on investment.