The Emerging Role of Entrepreneurial
Philanthropy
The Emerging Role of Entrepreneurial
Philanthropy
Steve KirschKirsch Foundation
AgendaAgenda
• About the Kirsch Foundation
• Kirsch Foundation programs
• Principles of entrepreneurial philanthropy
About Kirsch FoundationAbout Kirsch Foundation
• Supporting organization of local community foundation• $50M endowment• Gave out $8M last year, 135 grants• 6 full time staff people• Goals
-Ensure world safety-Cure all major diseases-Restore the environment-Reform politics-Reform education-Support the local community
Why give?Why give?
• “Enlightened self interest”- To benefit everyone (including ourselves)
• Results oriented- Grants are made to achieve goals, not pure ROI optimization (asteroids)
• Our motivation is not:- Noblesse oblige/“payback” or “proper”- Increased social status- Public recognition/image- Fun
Why give publicly?Why give publicly?
• Those who give anonymously because it proves they are altruistic are focusing on the wrong benefit
• There is no benefit to giving anonymously
• Two exceptions- A controversial cause that may cause more questions than answers,
Example: if I donate to gay rights, will people spend all their time wondering whether there is a hidden agenda?
- You are totally proactive in your giving, have no staff, and find that you are spending too much time responding to requests for money
Our enemiesOur enemies
• Mother nature (disease)
• US government- Seems to make decisions that result in fewer lives being saved
Abortion fundingStem cell funding
…
• BBC TV shows: The Weakest Link, …
Kirsch InvestigatorsKirsch Investigators
• Invest in people like HHMI
• Unique target: mid-career scientists
• $540K grants over 3 years (includes overhead)
• Individuals proposed by 10 institutions
• 8 member Scientific Advisory Board evaluates applications
Collaborative Funding Model (CFM)
Collaborative Funding Model (CFM)
• Example: Our partnership with Glaucoma Research Foundation (GRF)
• Based on success achieved in spinal cord research and Huntingdon’s Disease (our innovation is partnering with another foundation)
• Goal: Applicable to areas where progress has stalled (e.g., glaucoma) but where breakthroughs in other areas (e.g., neuroscience) may be applicable
• Narrow majority of people on panel and researchers are from outside the field
• 5 member panel picks 3-5 researchers who agree to work together and meet 2x/yr
• Min 3 year, min $1M grants
TargesomeTargesome
• Objective: diagnose and cure cancers as small as 1mm
• Approach: attach ligands or antibodies for angiogenisis to a large molecule along with In (imaging) or Yt (therapy)
• For-profit startup; $3.5M invested in equity
• Couldn’t get funding because VC’s were all investing in Internet startups
• Astonishing results in animals
• I sit on the board; I bring a sense of urgency
Key principlesKey principles
• Adopt best practices• Experiment• Encourage collaboration• Make a long term commitment• Expand your options• Be proactive• Bet on people• Be flexible• Capitalize on market opportunities• Get personally involved
Adopt best practicesAdopt best practices
• See what works best and copy it
• It’s so simple, but ignored so often, e.g., US education
• Examples:- KI program was inspired by HHMI- CFM program is an incremental improvement on existing successful programs
ExperimentExperiment
• Insanity is doing the same thing over and over and expecting different results
• Take risks/try a new approach
• Example:- CFM has collaboration both between foundations and researchers- Most of the people are from outside the field to bring a new perspective
Encourage collaborationEncourage collaboration
• Scientists tend to be “competitive” rather than “collaborative”
• Solution- Be careful choosing research groups- Interdisciplinary collaboration is much easier- Reward/require collaboration
• Example: - CFM fosters collaborations between foundations as well as between researchers
Make a long term commitment
Make a long term commitment
• Medical research doesn’t respect a 12 month cycle
• 3 to 5 years is a more practical timeframe
• Examples:- KI and CFM are both at least 3 year programs
Expand your optionsExpand your options
• Explore all options available• Example: Consider PRIs• PRIs are “have your cake and eat it too”,
especially for individual investors- Worst case: superior tax deduction- Best case: cure a disease AND make a lot of money to use for next disease
• Example:- Targesome wouldn’t have been funded if I hadn’t stepped up
Be proactiveBe proactive
• Set ambitious long-term goals
• Develop annual strategies and tactics
• Example:- Our goals and strategies are posted on our website- Staff pay is tied to achievement of goals
Bet on peopleBet on people
• If we were smarter than the people we fund, we’d fund ourselves
• Given that they are smarter than we are, why not trust them to do the right thing?
• Hold them accountable; if they don’t do what they said they would, they must renegotiate
• Example: - CFM, KI bet on people, not specific projects
Be flexibleBe flexible
• Don’t always play by your own rules
• Example:- United Way of Santa Clara County Emergency Fund
Capitalize on market opportunities
Capitalize on market opportunities
• Look for “funding gaps”
• Example:- Stem cell research- KI program focuses on mid-career researchers- Targesome got caught in the Internet bubble
Get personally involved Get personally involved
• It’s more than writing checks.
• Take a trip out to visit the people you fund
• Do some research yourself!
• Examples:- EV1 car- ZEV stickers- Education reform- Dan Case
SummarySummary
• Adopt best practices• Experiment• Encourage collaboration• Make a long term commitment• Expand your options• Be proactive• Bet on people• Be flexible• Capitalize on market opportunities• Get personally involved