Jeff Bezos, the worldâ€™s richest man, will announce his plans this summer to give away some of his vast fortune. What heâ€™ll fund has become a popular guessing game in the media and philanthropic circles. Thereâ€™s no shortage of people willing to tell him what to do with his wealth. Iâ€™m not here to do that. How he uses his money philanthropically is his choice and he should support his passions â€“ not ours.Â
But as someone who has spent many years working with foundation trustees (and as one myself), Iâ€™ve learned some lessons about how philanthropists can succeed and how they can miss the mark. If Mr. Bezos wants to embody the true ideals of philanthropy â€“ to make a real difference in peopleâ€™s lives â€“ here are six things he (and every person thinking about giving) should consider.
Take the time to understand the issues you want to address and your intended impact. Otherwise, youâ€™re setting yourself up for failure. Letâ€™s say you want to improve education in Seattle. Is that too broad? Maybe you winnow it down to improving graduation rates. But what does that mean? Will your giving increase graduation rates and the learning that allows a student to have truly earned that diploma? Or, is it about young people being positioned for success in life â€“ whether itâ€™s heading to college, further vocational training or serving in the armed forces.Â
Be granular and specific. Difficult decisions will need to be made, but the more focused your efforts are, the greater your chances of success.Â
Imagine youâ€™re remodeling a kitchen. Youâ€™ll need a saw for cutting â€“ in fact youâ€™ll need a few. Thereâ€™s a reciprocating saw for demo. A rotary saw for cutting lumber for framing. And youâ€™ll need a miter saw to make angles align correctly on the trim. Just as there are different saws for specific jobs, there are many philanthropic vehicles, each with different applications, benefits and potential dangers if misused.Â
There are different types of foundations, which typically make grants and run programs. Other options include donor advised funds, supporting organizations, and planned giving trusts. Of course, a non-traditional approach might better suit your aspirations â€“ such as Mark Zuckerberg and Dr. Pricilla Chan choosing to organize the Chan Zuckerberg Initiative as an LLC, providing more flexibility for investments in for-profit social enterprises as well as to support political causes and advocacy.Â
To choose the right giving vehicle(s), you need to start with your vision for your philanthropy and let the structure follow. Begin by identifying your goals, the activities you want to engage in, and your tax priorities. Most importantly, your choices are not limited. You can use many giving vehicles to achieve your goals.
Be aware of the real costs for whatever philanthropic undertaking you pursue. Some call it overhead, others, full funding. Regardless of name, itâ€™s real. One can buy books for a reading program, but if the school canâ€™t afford to heat the building, it isnâ€™t hard to recognize that students who sit wearing winter coats in cold classrooms will likely learn less.Â
Failing to understand that nonprofits canâ€™t be successful unless they are adequately resourced is a mistake that far too many funders make. Iâ€™m not suggesting funding of overhead in lieu of programs or specific projects â€“ they are not mutually exclusive. Acknowledge that programs have real and genuine operational costs associated with them that are critical to successful endeavors. No matter what you call it, overhead is not a luxury, nor is it glamourous. It is a necessity. Fund it!
We all have them. Recognize those blind spots and work through them so they donâ€™t inadvertently lead to bad decisions. Trust me on this, I learned the hard way as part of a team that once decided not to fund a project. In retrospect, my opposition to the project was based on my view of the world through the lens of my own white, straight, male privileged suburban upbringing. Itâ€™s one of the most embarrassing decisions Iâ€™ve ever been a part of and Iâ€™m ashamed of it. Yet I learned a valuable lesson: Equity for all communities will only come from working toward diversity and inclusiveness. I learned that it is not about me, nor you Mr. Bezos. It is about the beneficiaries of the services and programs we choose to fund.
Actively get to know and listen to the people you are trying to help. Just as in business, success as a funder requires knowing your market, your audience, your â€ścustomers.â€ť Be humble enough to listen to experts in the community â€“ Iâ€™ve come to appreciate that they almost always know more than I do about the issue at hand. Be aware enough to recognize their experience and smart enough to adjust accordingly.
Philanthropy is one of the only sectors â€“ apart from dealing with oneâ€™s personal physician â€“ where we expect perfection every time. We do so to our own detriment. In philanthropy, as in life, things wonâ€™t always go right. Much like learning to walk, when a toddler stumbles, we donâ€™t tell the child to give up walking. Few things in philanthropy, as in business, are absolute successes or total failures. You will scrape your knees along the way. Thatâ€™s healthy. Just be ready to embrace what you learn from the inevitable stumbles.Â
6. Recognize the interrelated nature of philanthropic activity.Â
Whatever you choose to fund is one piece of a greater ecosystem. Assume for the moment youâ€™ve determined the best way to improve education is to address early childhood literacy, so you fund reading support programs for youngsters. Recognize that every night some of those children return to a house or apartment without heat, very little to eat, or any number of things that directly impact their immediate and future success.Â Without addressing these confounding variables in the childâ€™s life, attending a reading program may not matter as much as we all might hope.
Social problems do not exist in a vacuum. You likely will set out to address one problem and then find other systemic or root causes that also need to be addressed. Programming and advocacy for systems change, working in tandem, is needed to move the proverbial needle. Early on, you may have had a vision for what Amazon has become today, but you started with books. Just as you have grown Amazon, expect your philanthropy to evolve along the way.Â
A nun who ran a teaching program once gave me a great piece of advice â€“ never confuse the expression of your mission with its essence. The expression may be that a school you support receives 1,000 books. The essence is the impact â€“ helping children to succeed in life by learning to read.
Never lose sight that the point of philanthropy is to support those who benefit from the generosity of others. Itâ€™s about the person who emerges out of homelessness; the river that again is clean and the child who has a healthful future. Remember this with humility, and may you enjoy the same success in philanthropy as you have in business.Â