Category Archives: Philanthropy

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.

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.

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.

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."

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.