High impact philanthropyHigh impact philanthropy
Steve Kirsch
www.kirschfoundation.org
AgendaAgenda
• About our foundation
• Why give
• 13 guiding principles for high impact philanthropy
What is the Kirsch Foundation?What is the Kirsch Foundation?
• 501(c)3 CFSV supporting organization • $13M in assets• Give $3M+/year, 100+ grants, 5 FT staff• Goals: ensure world safety, cure all major diseases,
restore the environment, improve politics, reform education, support the local community, encourage philanthropy
• Treat the cause, not the symptom• Wide range of activities: clean air legislation (ZEV, CO2,
RPS), nuclear disarmament, SORT treaty, NEOS, hair loss, diabetes, glaucoma, SCNT advocacy, campaign finance reform, …
AgendaAgenda
• About our foundation
• Why give
• 13 guiding principles for high impact philanthropy
Why give?Why give?
• Enlightened self-interest-To benefit everyone (including ourselves)-To achieve certain goals we think are important to make the world a better place
• Ideal investment is both- High leverage (ROI) and- High impact
• Example: NEOS research• Occasional fringe benefits: I get the first call!
The best things in life aren’t all that expensiveThe best things in life
aren’t all that expensive• House
• Car
• Vacations
• Subscription to Fortune
• Replay/Tivo box
• Private jet
• Assets for guaranteed income for rest of your life
So now what?
So we had a choice...So we had a choice...
• Sit on our assets
or
• Put those assets to work in a way that will benefit:- ourselves- our kids- future generations of our family- our friends and community
AgendaAgenda
• About our foundation
• Why give
• 13 guiding principles for high impact philanthropy
#1: Diversify your endowment
#1: Diversify your endowment
• To have high impact, you must first ensure your longevity
• Many burned by investing large part of endowment in high tech
#2: Look for market opportunities
#2: Look for market opportunities
• Finding and funding the “gaps” (worthwhile projects that don’t have funding) can be very rewarding
• Do your homework. Abundant new opportunities worldwide for high ROI:
- Gates: Vaccinations- Funding campaign finance reform- NEOS- CFC: Collaboration in medical research between researchers in different fields on a single project- Hair loss research
#3: Be strategic, not reactive
#3: Be strategic, not reactive
• Decide on a vision you are passionate about-“Restore the environment”
• Decide on a top goal- “Get California air quality into compliance with state and federal standards by 2030”
• Figure out what strategies you will use to achieve the goal
- Higher CAFE standards- California CO2 standards- Incentives for commercialization of H2 FCV technology- RPS legislation- Congressional commitment behind a business plan for reducing our oil dependence
#4: Get involved in influencing public policy
#4: Get involved in influencing public policy
• I spend 90% of my time on public policy• All your hard work may be inconsequential otherwise• Often well-funded commercial special interest(s) in
opposition• Hard, time consuming, easy to waste money• Hiring lobbyist seldom the best approach; better is to
connect with a successful collaboration and learn• Breakthroughs are worth waiting for, e.g., recognition
of the lack of any long term goals• Can be very frustrating… 100 Nobel winners say
“SCNT is good,” but Congress may criminalize it
Methods of influencing public policy
Methods of influencing public policy
• Personally lobby via e-mail, phone, face-to-face• Foundation is a 501(c)(3) so staff can lobby• Establish a 501(c)(4) entity for going beyond fed limits • Personally donate to candidates, parties, causes that will
advance your agenda- Electing the right President may be
the single most cost-effective charitable donation that you can make
• Lawsuits• PR events, e.g., STOP• Help them set goals• Be specific:
-Here’s what I want you to do-Here’s why you should care My largest “charitable” grant recipient
#5: Encourage connection#5: Encourage connection
• We very seldom do anything “alone” anymore• We collaborate with other organizations to:
- increase the amount of funding available - disseminate our knowledge - share our expertise
• We also encourage our grantees to work together:- CAMR: 75+ organizations- CFC (w/Glaucoma Research Foundation): $1.26M + - E2, NRDC, UCS, …- AC2 with Ploughshares Fund- CHFB with 2 researchers
CFC researchers
#6: Leverage your endowment
#6: Leverage your endowment
• Program Related Investments (PRIs) give you a double-whammy impact:
- Best way to solve a “charitable” problem may be commercial!- Make money to use for the next problem
• Examples
#7: Invest in the best#7: Invest in the best
• Goal = maximally leverage capital by making the best investment decisions
• We publish our goals and grant criteria• Grant spreadsheet: Analytical, but
very accurate• Ensures we grant based on
competence• Saves time for both parties • Tell people frankly why rejected.
Holding back isn’t doing anyone any favors.
Category Max possible
I. Project/Organization 61
A. Project Focus 15
B. Cause vs. Symptom 15
C. Ability to Improve Quality of Life 8
D. Past Results/Reputation 10
E. Creativity 8
F. Measurable Outcomes 5
II. Funding 7
A. Limits on Availability of Other Funding 4
C. Time Sensitivity 3
SUBTOTAL 1 68
#8: Be patient#8: Be patient
• Don’t get discouraged if at first you don’t succeed
• Significant change takes time
• The bigger the impact, the longer you should expect it will take
#9: Make a long term commitment
#9: Make a long term commitment
• If you are doing something meaningful, it probably can’t be done overnight
• Without a long term commitment, grantees will spend a lot of time fundraising
• Example: Medical research- Researchers spend a significant fraction of their time writing grant proposals
#10: Invest in people, not projects
#10: Invest in people, not projects
• Study those foundations that are the most effective and copy what they do
• HHMI was our model for investment in people, not projects
• Think of your charitable investment like a stock market investment
- You don’t tell Bill Gates which projects he
should pursue
#11: Stay focused#11: Stay focused
• Don’t try to do too much
• You will be much more efficient if you pick just one important goal and nail it
• Example: Due to lack of funds and staff, we put our medical science research grant programs on hold
#12: Get personally involved
#12: Get personally involved
• Visit grantees
• Phone calls, letters, e-mails to further a cause
• Walk the talk…I drive a ZEV
• Stay informed
#13: Challenge yourself to make the biggest difference
#13: Challenge yourself to make the biggest difference
• You don’t have to follow my rules• Challenge yourself to find the opportunities to make
the biggest difference• Look at your results and challenge yourself:
- What did I learn?- How could I have been more effective?- Is my timing right? - Should I be investing more today?- Am I playing at a high enough level?
• Example: - High impact causes are almost always played at the federal level
SummarySummary
• Be proactive, not reactive
• Get involved in the public sector
• Invest in the most competent people, not projects
• Be patient and make a long-term commitment
• Encourage connection
• Challenge yourself to make the biggest difference… are you playing at the right level?
Why don’t people give?Why don’t people give?
• Just earned it/want to enjoy it• Risk averse; want to ensure lavish lifestyle for rest of life,• Lack of understanding of enlightened self interest• If I don’t, someone else will, so why should I?• Focus: all cycles on growing business• Greedy/ego: Measure self worth by net worth• Lack of time• Like writing your will or going to dentist; it’s good for you, but low
on the priority list• Lack of knowledge of how to do it• Never really thought of a cause that resonated• Fear of making a mistake…”hit reply if you support clean air”
Why give youngWhy give young
• No tax advantages to giving after you are dead
• No personal satisfaction to giving after you are dead
• Giving can ultimately benefit you or your family
• Reduce current tax burden
presbyopiahair losssleep apnealactose intolerancepsoriasisreceding gumsnear sightedtorn ACLtype I diabetes macular degenerationtinnitus
ExampleExample
• Ten years from now, you might be diagnosed with:- Heart disease/stroke- Cancer- ALS, Parkinson’s disease, …
• At that time, starting a giving plan will be too late to have an impact on your health
• In hindsight, would you think keeping your assets sitting in stocks was the right move?
“Why Give?” Summary“Why Give?” Summary
• We DO give to make a positive difference in our own lives and the lives of people we care about.
• We DO NOT give -out of a sense of obligation-payback -civic duty -because it is “the right thing to do”-“to create a legacy” -because it is fun-because we have nothing else to do-because we like to see our name in print-to feed our ego-to get our picture on the cover of Worth-to win awards-to win friends or social status (keep up w/Ken Lay)-to atone for being wealthy-to get invited to all the cool fundraisers-to get preferred seating at fundraisers-to avoid income tax
MotivationMotivation
•"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."
-- Steve Kirsch, chief executive of Propel Inc.
Another viewpointAnother viewpoint
•“what's wrong with jets, vacations and a nice home?”
- Michele Kirsch