High Impact Philanthropy

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  • Fringe benefit: I get the first call
  • High Impact Philanthropy

    1. 1. High impact philanthropy Steve Kirsch www. kirschfoundation .org
    2. 2. Agenda <ul><li>About our foundation </li></ul><ul><li>Why give </li></ul><ul><li>13 guiding principles for high impact philanthropy </li></ul>
    3. 3. What is the Kirsch Foundation? <ul><li>501(c)3 CFSV supporting organization </li></ul><ul><li>$13M in assets </li></ul><ul><li>Give $3M+/year, 100+ grants, 5 FT staff </li></ul><ul><li>Goals: ensure world safety, cure all major diseases, restore the environment, improve politics, reform education, support the local community, encourage philanthropy </li></ul><ul><li>Treat the cause, not the symptom </li></ul><ul><li>Wide range of activities: clean air legislation (ZEV, CO2, RPS), nuclear disarmament, SORT treaty, NEOS, hair loss, diabetes, glaucoma, SCNT advocacy, campaign finance reform, … </li></ul>
    4. 5. Agenda <ul><li>About our foundation </li></ul><ul><li>Why give </li></ul><ul><li>13 guiding principles for high impact philanthropy </li></ul>
    5. 6. Why give? <ul><li>Enlightened self-interest </li></ul><ul><ul><li>To benefit everyone (including ourselves) </li></ul></ul><ul><ul><li>To achieve certain goals we think are important to make the world a better place </li></ul></ul><ul><li>Ideal investment is both </li></ul><ul><ul><li>High leverage (ROI) and </li></ul></ul><ul><ul><li>High impact </li></ul></ul><ul><li>Example: NEOS research </li></ul><ul><li>Occasional fringe benefits: I get the first call! </li></ul>
    6. 7. The best things in life aren’t all that expensive <ul><li>House </li></ul><ul><li>Car </li></ul><ul><li>Vacations </li></ul><ul><li>Subscription to Fortune </li></ul><ul><li>Replay/Tivo box </li></ul><ul><li>Private jet </li></ul><ul><li>Assets for guaranteed income for rest of your life </li></ul><ul><li>So now what? </li></ul>
    7. 8. So we had a choice... <ul><li>Sit on our ass ets </li></ul><ul><li>or </li></ul><ul><li>Put those assets to work in a way that will benefit: </li></ul><ul><ul><li>ourselves </li></ul></ul><ul><ul><li>our kids </li></ul></ul><ul><ul><li>future generations of our family </li></ul></ul><ul><ul><li>our friends and community </li></ul></ul>
    8. 9. Agenda <ul><li>About our foundation </li></ul><ul><li>Why give </li></ul><ul><li>13 guiding principles for high impact philanthropy </li></ul>
    9. 10. #1: Diversify your endowment <ul><li>To have high impact, you must first ensure your longevity </li></ul><ul><li>Many burned by investing large part of endowment in high tech </li></ul>
    10. 11. #2: Look for market opportunities <ul><li>Finding and funding the “gaps” (worthwhile projects that don’t have funding) can be very rewarding </li></ul><ul><li>Do your homework. Abundant new opportunities worldwide for high ROI: </li></ul><ul><ul><li>Gates: Vaccinations </li></ul></ul><ul><ul><li>Funding campaign finance reform </li></ul></ul><ul><ul><li>NEOS </li></ul></ul><ul><ul><li>CFC: Collaboration in medical research between researchers in different fields on a single project </li></ul></ul><ul><ul><li>Hair loss research </li></ul></ul>
    11. 12. #3: Be strategic, not reactive <ul><li>Decide on a vision you are passionate about </li></ul><ul><ul><li>“ Restore the environment” </li></ul></ul><ul><li>Decide on a top goal </li></ul><ul><ul><li>“ Get California air quality into compliance with state and federal standards by 2030” </li></ul></ul><ul><li>Figure out what strategies you will use to achieve the goal </li></ul><ul><ul><li>Higher CAFE standards </li></ul></ul><ul><ul><li>California CO2 standards </li></ul></ul><ul><ul><li>Incentives for commercialization of H2 FCV technology </li></ul></ul><ul><ul><li>RPS legislation </li></ul></ul><ul><ul><li>Congressional commitment behind a business plan for reducing our oil dependence </li></ul></ul>
    12. 13. #4: Get involved in influencing public policy <ul><li>I spend 90% of my time on public policy </li></ul><ul><li>All your hard work may be inconsequential otherwise </li></ul><ul><li>Often well-funded commercial special interest(s) in opposition </li></ul><ul><li>Hard, time consuming, easy to waste money </li></ul><ul><li>Hiring lobbyist seldom the best approach; better is to connect with a successful collaboration and learn </li></ul><ul><li>Breakthroughs are worth waiting for, e.g., recognition of the lack of any long term goals </li></ul><ul><li>Can be very frustrating… 100 Nobel winners say “SCNT is good,” but Congress may criminalize it </li></ul>
    13. 14. Methods of influencing public policy <ul><li>Personally lobby via e-mail, phone, face-to-face </li></ul><ul><li>Foundation is a 501(c)(3) so staff can lobby </li></ul><ul><li>Establish a 501(c)(4) entity for going beyond fed limits </li></ul><ul><li>Personally donate to candidates, parties, causes that will advance your agenda </li></ul><ul><ul><li>Electing the right President may be the single most cost-effective charitable donation that you can make </li></ul></ul><ul><li>Lawsuits </li></ul><ul><li>PR events, e.g., STOP </li></ul><ul><li>Help them set goals </li></ul><ul><li>Be specific: </li></ul><ul><ul><li>Here’s what I want you to do </li></ul></ul><ul><ul><li>Here’s why you should care </li></ul></ul>My largest “charitable” grant recipient
    14. 15. #5: Encourage connection <ul><li>We very seldom do anything “alone” anymore </li></ul><ul><li>We collaborate with other organizations to: </li></ul><ul><ul><li>increase the amount of funding available </li></ul></ul><ul><ul><li>disseminate our knowledge </li></ul></ul><ul><ul><li>share our expertise </li></ul></ul><ul><li>We also encourage our grantees to work together: </li></ul><ul><ul><li>CAMR: 75+ organizations </li></ul></ul><ul><ul><li>CFC (w/Glaucoma Research Foundation): $1.26M + </li></ul></ul><ul><ul><li>E2, NRDC, UCS, … </li></ul></ul><ul><ul><li>AC 2 with Ploughshares Fund </li></ul></ul><ul><ul><li>CHFB with 2 researchers </li></ul></ul>CFC researchers
    15. 16. #6: Leverage your endowment <ul><li>Program Related Investments (PRIs) give you a double-whammy impact: </li></ul><ul><ul><li>Best way to solve a “charitable” problem may be commercial! </li></ul></ul><ul><ul><li>Make money to use for the next problem </li></ul></ul><ul><li>Examples </li></ul>
    16. 17. #7: Invest in the best <ul><li>Goal = maximally leverage capital by making the best investment decisions </li></ul><ul><li>We publish our goals and grant criteria </li></ul><ul><li>Grant spreadsheet: Analytical, but very accurate </li></ul><ul><li>Ensures we grant based on competence </li></ul><ul><li>Saves time for both parties </li></ul><ul><li>Tell people frankly why rejected. Holding back isn’t doing anyone any favors. </li></ul>
    17. 18. #8: Be patient <ul><li>Don’t get discouraged if at first you don’t succeed </li></ul><ul><li>Significant change takes time </li></ul><ul><li>The bigger the impact, the longer you should expect it will take </li></ul>
    18. 19. #9: Make a long term commitment <ul><li>If you are doing something meaningful, it probably can’t be done overnight </li></ul><ul><li>Without a long term commitment, grantees will spend a lot of time fundraising </li></ul><ul><li>Example: Medical research </li></ul><ul><ul><li>Researchers spend a significant fraction of their time writing grant proposals </li></ul></ul>
    19. 20. #10: Invest in people, not projects <ul><li>Study those foundations that are the most effective and copy what they do </li></ul><ul><li>HHMI was our model for investment in people, not projects </li></ul><ul><li>Think of your charitable investment like a stock market investment </li></ul><ul><ul><li>You don’t tell Bill Gates which projects he should pursue </li></ul></ul>
    20. 21. #11: Stay focused <ul><li>Don’t try to do too much </li></ul><ul><li>You will be much more efficient if you pick just one important goal and nail it </li></ul><ul><li>Example: Due to lack of funds and staff, we put our medical science research grant programs on hold </li></ul>
    21. 22. #12: Get personally involved <ul><li>Visit grantees </li></ul><ul><li>Phone calls, letters, e-mails to further a cause </li></ul><ul><li>Walk the talk… I drive a ZEV </li></ul><ul><li>Stay informed </li></ul>
    22. 23. #13: Challenge yourself to make the biggest difference <ul><li>You don’t have to follow my rules </li></ul><ul><li>Challenge yourself to find the opportunities to make the biggest difference </li></ul><ul><li>Look at your results and challenge yourself: </li></ul><ul><ul><li>What did I learn? </li></ul></ul><ul><ul><li>How could I have been more effective? </li></ul></ul><ul><ul><li>Is my timing right? </li></ul></ul><ul><ul><li>Should I be investing more today? </li></ul></ul><ul><ul><li>Am I playing at a high enough level? </li></ul></ul><ul><li>Example: </li></ul><ul><ul><li>High impact causes are almost always played at the federal level </li></ul></ul>
    23. 24. Summary <ul><li>Be proactive, not reactive </li></ul><ul><li>Get involved in the public sector </li></ul><ul><li>Invest in the most competent people, not projects </li></ul><ul><li>Be patient and make a long-term commitment </li></ul><ul><li>Encourage connection </li></ul><ul><li>Challenge yourself to make the biggest difference… are you playing at the right level? </li></ul>
    24. 26. Why don’t people give? <ul><li>Just earned it/want to enjoy it </li></ul><ul><li>Risk averse; want to ensure lavish lifestyle for rest of life, </li></ul><ul><li>Lack of understanding of enlightened self interest </li></ul><ul><li>If I don’t, someone else will, so why should I? </li></ul><ul><li>Focus: all cycles on growing business </li></ul><ul><li>Greedy/ego: Measure self worth by net worth </li></ul><ul><li>Lack of time </li></ul><ul><li>Like writing your will or going to dentist; it’s good for you, but low on the priority list </li></ul><ul><li>Lack of knowledge of how to do it </li></ul><ul><li>Never really thought of a cause that resonated </li></ul><ul><li>Fear of making a mistake…”hit reply if you support clean air” </li></ul>
    25. 27. Why give young <ul><li>No tax advantages to giving after you are dead </li></ul><ul><li>No personal satisfaction to giving after you are dead </li></ul><ul><li>Giving can ultimately benefit you or your family </li></ul><ul><li>Reduce current tax burden </li></ul><ul><li>presbyopia hair loss sleep apnea lactose intolerance psoriasis receding gums near sighted torn ACL type I diabetes macular degeneration tinnitus </li></ul>
    26. 28. Example <ul><li>Ten years from now, you might be diagnosed with: </li></ul><ul><ul><li>Heart disease/stroke </li></ul></ul><ul><ul><li>Cancer </li></ul></ul><ul><ul><li>ALS, Parkinson’s disease, … </li></ul></ul><ul><li>At that time, starting a giving plan will be too late to have an impact on your health </li></ul><ul><li>In hindsight, would you think keeping your assets sitting in stocks was the right move? </li></ul>
    27. 29. “ Why Give?” Summary <ul><li>We DO give to make a positive difference in our own lives and the lives of people we care about. </li></ul><ul><li>We DO NOT give </li></ul><ul><ul><li>out of a sense of obligation </li></ul></ul><ul><ul><li>payback </li></ul></ul><ul><ul><li>civic duty </li></ul></ul><ul><ul><li>because it is “the right thing to do” </li></ul></ul><ul><ul><li>“ to create a legacy” </li></ul></ul><ul><ul><li>because it is fun </li></ul></ul><ul><ul><li>because we have nothing else to do </li></ul></ul><ul><ul><li>because we like to see our name in print </li></ul></ul><ul><ul><li>to feed our ego </li></ul></ul><ul><ul><li>to get our picture on the cover of Worth </li></ul></ul><ul><ul><li>to win awards </li></ul></ul><ul><ul><li>to win friends or social status (keep up w/Ken Lay) </li></ul></ul><ul><ul><li>to atone for being wealthy </li></ul></ul><ul><ul><li>to get invited to all the cool fundraisers </li></ul></ul><ul><ul><li>to get preferred seating at fundraisers </li></ul></ul><ul><ul><li>to avoid income tax </li></ul></ul>
    28. 30. Motivation <ul><li>&quot;I'm one of those guys who's made a fortune at a young age and had the foresight to figure out that it's just a lot smarter to spend that money on ensuring the world is a better place than spending it on vacations, jets, homes, and expensive toys.&quot; </li></ul><ul><li>-- Steve Kirsch, chief executive of Propel Inc. </li></ul>
    29. 31. Another viewpoint <ul><li>“ what's wrong with jets, vacations and a nice home?” </li></ul><ul><ul><li>Michele Kirsch </li></ul></ul>

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