Time to Give — It's the Holidays

A few years ago I realized I had no intense desire for more material possessions….and that any desire I did have was much less intense than a desire to buy and read more books.

So, I spread the word: if you want to get me something for Christmas or for my birthday, check out my Amazon wish list and buy me a book, or donate to a charity on my behalf. The past two Christmases I’ve given a handful of small donations on other people’s behalf (Acumen Fund, Junior Giants Fund, Ms. Foundation, George Washington Kenmore Foundation, and others).

This year, I am supporting the Ashoka Foundation. I just submitted my donation online with a credit card. They do excellent work in the area of “social entrepreneurship”. Social entrepreneurship takes the principles of entrepreneurship and applies them to social problems. In addition to attending an Ashoka event a few weeks ago, I chatted on the phone last week with one of their heads to hear about their new IT initiatives. I’m a fan.

It’s the holidays. If you have the resources to read this blog, you have the resources to give a little. Please do.

Ashoka Fellows 2006 Change World Through Social Entrepreneurship

I believe the profit-motive has produced the most good in the world by introducing the hugest world-changing ideas — both in terms of the products we use and the culture we consume.

But I suppose the next best thing to for-profit entrepreneurship is "social entrepreneurship" — a new breed of civic / non-profit / hybrid entrepreneurs.

I had the pleasure of supporting my friend Steven Clift be inducted as a 2006 Ashoka Fellow tonight at the Google campus after a welcome by Sergey Brin and other leading lights of the change-the-world movement. Ashoka is an organization funding the best social entrepreneurs. James Fallows, one of my intellectual heros, recently said if he had a million dollars to give away he’d give it to Ashoka. The work Ashoka supports is much more compelling than your traditional charity.

Steven Clift has been promoting e-democracy and e-government for many years. We were both named among the most influential people in the world of internet and politics at a conference in Paris a few years ago; he said some kind things about me in an SF Weekly piece; I’ve given him some material about Comcate‘s e-gov work that he’s used in presentations to congressional committes and audiences around the world. We share a passion to make government and politics more accessible and interactive using the internet.

Congrats Steven and the entire Class of 2006 Ashoka Fellows. March on. This change the world stuff ain’t always easy. Ashoka has just made it a little less hard.

The Business Approach to Philanthropy

I had lunch Thursday at the Silicon Forum, a regular event put on by my pal Auren Hoffman. The topic was "The Business Approach to Philanthropy." Auren interviewed Sheryl Sandberg of Google for 15 minutes, and then about 12 tables of 12 invited guests each discussed the issue among themselves.

I think philanthropy is very important. In my philanthropy posts I’ve advocated for businesses — this includes start-ups — to take integrated philanthropy seriously. By "integrated," I mean weaving volunteerism and donations into the fabric of a corporate culture. Many companies adopt a 1% principle: 1% of profits, equity, and employee time to the company charity. I have also acknowledged the opposing view which says the best way for corporations to maximize social benefit is to maximize return for shareholders. Besides, shouldn’t shareholders decide how to give their money away? This is a fair argument but I still disagree: I think there’s a real self-interest ROI on integrated philanthropy. 1% of profits can easily be made up with higher employee morale (you feel part of something bigger), a positive corporate culture, and then of course all the PR benefits that accrue.

That’s the view I took into the lunch.

Sheryl — who was one of the impressive people, in business or otherwise, I’ve ever seen — said a bunch of interesting things.

  • The vast majority of Americans’ donations go to religious organizations.
  • Higher education — which serves mostly the elite — is in second.
  • Vast majority of our money goes to "visible victims." The tsunami was terrible disaster, but that many people die each week of hunger. Yet, after tsunami, 56% of Americans donated to that cause and donations to the ongoing UN Food program decreased.
  • People want to lever — it’s much easier to get donations for opening a new school versus on-going support for a school.
  • Her big question: how do we get money to the poor, those most in need?

On the drive home I came up with my own list of questions:

  • How do we negotiate in our own minds the need to help the neediest, versus a visible victim in our community? For example, giving money to a cultural institution — like the opera — probably helps those least in need. For me, giving my time and money to organizations like BizWorld (or even Ms. Foundation) means time and money is not going to hunger in Africa. Is this simply a reality of human nature? We want to be charitable, but we also want to be able to touch and feel the fruits of our labor?
  • Why do organizations like Habitat for Humanity exist? The best way to leverage my time and energy is not to give me a hammer and have me start building houses. A carpenter should do that. Then why do educated, well-to-do men and women with no carpentry skills pick up hammers and start building houses? It makes them feel good.
  • Should start-ups be expected to be active philanthropically from their inception? Is this a burden the shareholders and investors should not be expected to bear?
  • There seem to be three kinds of donors — individuals, businesses, governments. Early in our country’s history most charity existed in the private sector. Now, I’m sure government aid trumps all. Given government’s propensity to fuck things up, I’m not supportive of tripling the US AID budget in Africa.

A Failure of Philanthropy: American Charity, Education, and Public Policy

There’s a great article in the Stanford Social Innovation Review titled "A Failure of Philanthropy: American charity shortchanges the poor, and public policy is partly to blame."

This is required reading for anyone interested in philanthropy, and in particular education. Professor Reich writes with awesome clarity and brevity.

He starts by discussing public school foundations. In rich neighborhoods like Ross, CA or Woodside, CA the parents set up a local education foundation which donates money to the school district for new programs in music, arts, PE, etc. Thus, the public schools in these areas are very good, while schools in poorer neighboring cities stink. "Who could fault wealthy parents for wanting to do best for their children?"

The gap between these children and children growing up in disadvantage widens, of course. "What is surprising is that public policies governing philanthropy encourage and reward this gap-widening."

How? Not all 501(c)(3)’s are the same, yet they all confer identical tax benefits to donors. A rich Woodside parent who’s in the top tax bracket only "pays" $650 of her $1,000 donation. Between ’98 and ’03 the federal government has paid $3.5 M of roughly $10 M of donations to the Woodside school foundation in lost tax revenue. Moreover, because of this tax system, your $1k donation to baldness research is worth the same as my $1k to Darfur relief. 501(c)(3)’s do not differentiate on the worth of the philanthropy.

Reich continues by wondering whether philanthropy and private foundations do a good job at redstributing wealth, at serving those most in need. If someone didn’t donate to charity, and thus were taxed on that income, would the government do a better job at distributing the money?

"The public policies designed to support the philanthropic and nonprofit sector represent a wide-scale, costly government intervention."

Study Shows the Superrich Are Not the Most Generous

At least on a percentage of income basis….I wonder what the psychology behind this is. Do all of us have in our heads some artificial number of how much is a right amount to give to charity each year, and then that never changes even as we work our way up the income ladder?

Link: Study Shows the Superrich Are Not the Most Generous – New York Times.

Working-age Americans who make $50,000 to $100,000 a year are two to six times more generous in the share of their investment assets that they give to charity than those Americans who make more than $10 million, a pioneering study of federal tax data shows.

BizWorld Rings Closing Bell at NYSE

Congratulations to my friends at the BizWorld Foundation for ringing the closing bell at the NYSE today. Pictured below is a student of the entrepreneurship curriculum doing the honors and my friend executive director Catherine Hutton to her right. Founder Tim Draper is behind her.

Founder Tim Draper, CEO/Executive Director Catherine Hutton and BizKid DaShae Whitney ring the Closing Bell on December 1, 2005.

Give to Charities I Care About

I don’t need any more material objects except for more books.

So, for Christmas or my birthday, please consider giving to charities I care about on my behalf using my whatgoesaround.org GiveList.

I encourage everyone to set up such a gift so we end this nonsense of giving gifts people don’t want/need/use and instead become "everyday philanthropists."

Are there charities that should be on my GiveList that aren’t? Leave a comment and let me know.

Does Giving to Elite Higher Ed Count As Charity?

The NYT has a nice section on Giving, including one piece which gets at something I’ve been thinking about for awhile – a lot of charity nowadays isn’t going to the poor. I don’t think families/individuals are being philanthropic of they simply give money to their alma matter. The best colleges and universities still serve the privileged by giving money back to the college you went to, you are perpetuating an instituation which leaves the poor behind. I’ve written in the past about how a lot of aid seems to flow to non-critical causes, since hunger in Africa isn’t exactly close to home.

Ben Stein riffed on this a month ago when he wondered why he still gives money to Yale Law School, when $500 in a $13 B fund has a much less impact than $500 to about a million other charities. After a lot of mail, he changed his POV a week later saying "it’s OK for emotional ties to override reason"; in other words, he likes his Yale, so it doesn’t matter whether giving money there still makes sense.

Link: What Is Charity? – New York Times.

At Harvard University’s current rate of growth, its endowment will be larger than the Bill & Melinda Gates Foundation, the world’s largest foundation, in three years. And while Harvard increased its spending last year on financial aid for undergraduates to $80 million a year, that figure represents less than .5 percent of its $22 billion endowment, and only about 2 percent of the approximately $4 billion it earned last year on its investments.

"For the past 15 to 20 years, educational institutions have been funded primarily by tuition and fees, not donations," Professor Colombo said. "We’re conditioned to think of them as charities, but they aren’t."

A Brief Reminder on the Power of the Gates Foundation

Last week’s New Yorker had a good profile (not online) of the Gates Foundation – and the man himself. It was a helpful reminder that the Gates Foundation deploys more money toward certain public health initiatives than entire governments or world organizations do…all without any political or economic restrictions. In many respects what the Gates Foundation says is more important than what the World Health Organization does.

There’s something really appealing about Gates’ work here, and it has nothing to do with the money. It’s about applying the same obsessive nature that made him successful in business and applying it to philanthropy. So often, you see rich people throw around their money to check the "doing good" box. Rare do you see the intellectual brainpower devoted to the cause. Gates could so easily get away with simply being the world’s #1 philanthropist in a pure monetary sense.

Imagine if everyone on Forbes’ Top 20 richest list all applied the same amount of intellectual vigor that Gates does to their philanthropy. Imagine the impact.

"I'll Do It But Only If You Help Me Do It"

The PledgeBank is an awesome site that gives people the confidence of numbers.

The idea’s simple. Make a pledge, any pledge, conditional on a number of other people joining in.

Pledges can be symmetrical (everyone does the same thing)…

    "I will march on the White House in protest at X, if 1,000 people will join me."

    "I will paint my car bright yellow, if 200 people in my city will pledge the same."

…or a-symmetrical (you offer more than you ask from others.)

    "I will take $100,000 worth of sleeping bags to Pakistani earthquake victims if 5 people will join me to help distribute them…"

    "I will host free pizza at 10pm on my street, if a minimum of 30 people pledge to show up."

The reason this is brilliant is that so many people are reluctant to get involved in social change issues because they feel like their one voice won’t do jack. This overcomes that.

(Hat tip: TEDblog)