How can we best impact the growth of a more positive future for everyone? Tom and I discuss this question endlessly. No matter where our conversation begins--our kids’ school, maintenance on our parents’ homes, rebuilding an old jeep, or setting up a women’s speaker lecture series--every long car ride, date night, and other chunk of time we have ends up here. What will the future look like? How can we lend a hand? What could and should our involvement look like?
For Tom, the day-to-day answer is simple. He builds companies. And he helps other people build companies. He believes strongly that providing jobs (lots of them) with excellent salaries and enviable benefits will make the world a better place. Bonus if you can build a product that positively impacts a lot of ordinary people.
For me, I’m never quite so sure. I’m a dubious entrepreneur. Luckily for me, there are a handful of other folks trying to figure out how to lend a hand too. Perhaps by understanding what decisions they have made, I will be able to go just a little bit farther.
Picking a cause
Traditional philanthropy is going extinct. Yes, 70% of today's family foundations have been formed since 1990, and 70% are worth less than ten million dollars. We know that there are still a lot of wealthy people intending to give away their wealth. The direction of their giving and the metrics of choice, however, are shifting. Here in the tech world, the current generation of high-end donors are focusing on impact philanthropy and effective altruism--selecting causes based on ROIs and dollar-for-dollar impact. Not so much giving to build grand art galleries or to support the symphony these days.
There’s a lot of focus on education and health--obviously two incredible important causes. In both high-end philanthropy and smaller giving by “regular folks” in tech, there’s a tremendous focus on supporting new people learning to code. I get it, we want people to have the same great opportunities that we have had.
But all of this still is based on what feels like the best place to put your money. The best nonprofits are pouring their meager resources into evaluations to prove that they are doing good, hoping that they can outperform not just their peers, but others working in entirely different fields. Is it better to give $100 to support girls staying in school in rural Nepal? Or is it better to buy bed nets to keep pregnant mothers from getting malaria in Chad? Or is it better to support digging a well for a village in Bolivia? Can we even compare these strategies?
Some folks are trying. GiveWell is often considered the frontrunner in evaluating the evaluations of nonprofits. They do the research (far beyond five star ratings or smiley faces generated by charity search engines) and tell donors which projects have the deepest impact, and they don’t seem to be marred by very much bias in choosing their causes. They are reflexive and transparent in their analysis, and on the whole, a fantastic troupe of researchers.
Kari Tuna is another donor working to unpack the complexity of giving away money. She runs the Open Philanthropy Project, tightly connected to GiveWell, and her team’s work adds to the set of newly generated questions and ongoing information regarding how to give effectively.
Giving money away Investing your money
Donor advised funds are on the rise and offer the opportunity to give in many directions. Donor advised funds get a bad rap, but they’re highly convenient if you want to move a lot of money all at once and you are certain that you want to give it away eventually. This way, it is earmarked for charity and, even though it’s not headed there today, by law, it will one day. And who is to say that people of tomorrow are any less deserving of support than people today? Similarly, the Silicon Valley Community Foundation is a holding pen for large gifts and has never bulged with donations quite like it is now.
While some people are innovating on where to give, others are stretching the boundaries of how. Most recently we have seen Mark Zuckerberg and Priscilla Chan announce their Chan Zuckerberg Initiative LLC and commitment to cure all diseases with their BioHub. The ambitious and ambiguous BioHub interests me less (though I’m sure they’ll do great and have thought extensively and made public only the tiniest tip of the iceberg), than does the structure of their giving. They chose an LLC, which was made much of in the media HERE and HERE and HERE. By opting for an LLC, Zuckerberg and Chan will be able to remain highly flexible with their philanthropy. They can build various giving structures inside of the LLC, which, for a young, inventive couple, I find highly appealing.
Other tech folks have built similarly curious structures, that defy traditional philanthropy. We hear more and more about impact investing, and how to focus less on for-profit vs. not-for-profit and instead to focus on supporting for-good endeavors.
And there are so many accelerators for nonprofits and fellowships for entrepreneurs popping up that it’s hard to keep track. For a long time, I dreamed of one day building something like this, like a mini YC or TechStars for nonprofits, where a small batch of entrepreneurs could receive not only money, but incredible supportive services to strengthen their organizations. We could offer access to accountants, designers, marketing experts, programmers, evaluators, photographers--you name it. I considered that for a long time, and ultimately decided that dedicating all of my time to investing in early-stage individuals (statistically most of whom will fail) wasn’t the right move for my goal of creating the largest impact on the betterment of the world. It would have been fun though.
In our case, we have decided to build Preston-Werner Ventures. Our goal is to create a vehicle for investment that focuses on giving money to for-good endeavors. This sounds incredibly general--and it’s meant to be. We’re young (relatively so), and although we are ready to say that we want to commit a large percentage of our wealth to for-good causes, we aren’t ready to define our family by a single foundation, non-profit, or investment entity. Instead, we want to build in a guarantee for flexibility, such that as we do more research, refine our understanding, and even develop other interests, we will be able to create charitable grant-giving organizations, program-based nonprofits, for-profit, for-good investments that pay into for-profit grants, or even a for-profit company.
I’m sharing this news here, because part of my goal for this blog is to create a transparency of giving. I believe that the more people talk about charity, the more it will become a part of daily conversation and habit, hopefully generating increased public attention through volunteering and financial giving. I also hope that wealthy people who are in the similar position of deciding what to do with their good fortune may find this blog to be a valuable resource to think through their own actions. We don’t all have to follow the same path. Not everyone will want to give away their wealth. I hope that those who do will recognize the impact they can have and the potential for thoughtful creativity.
This is how the attitude and approach to for-good investment has changed in the past decade. Today’s philanthropists aren’t afraid to say, “I’m going to do the research myself. Maybe I’ll determine that the best way to impact the growth of a more positive future is by making a few large donations, or maybe it is by investing a little bit in a lot of entrepreneurs or maybe it is by building my own company that solves an old problem in a new way.”
For now, Tom and I are at the very beginning stages of building Preston-Werner Ventures. We’ve made an initial commitment to the University of California, Berkeley and their Bixby Center for Population, Health, and Sustainability, in order to partner and gain access to the research tools offered by a university infrastructure. During the next couple of years, I'll work to dive deeply into our first unit of inquiry for investment--global family planning. More on that soon.
For the past year I've busied myself with exploring potential structures for investment for good. Should we focus on small grants to first-time entrepreneurs in the Global South? Should we support multi-year grants and offer increasing levels of support? Should we do fewer grants but offer supportive services? Is there a smaller, niche focus we could have, like only supporting organizations that have already proven themselves through multi-year pilots and now need the capital to expand services into new locations?
Determining not only our initial focus, but also our structure for support has taken the bulk of my attention in 2016 (in addition to birthing our second child and working with a few other nonprofits on side projects, of course). Over the next few weeks, I'm hoping to publish several informal posts about how far we've come, the ideas that we have suggested, discarded, and continue to investigate, and ultimately, where we're headed in 2017.