“When you know one foundation, you know one foundation.”
That’s what I heard repeatedly as I set out to learn “the recipe” to running an impactful private foundation. After meeting with some of the biggest and most prestigious foundations, I learned the truth: there is no recipe. I did, however, meet a lot of smart, industrious people who were willing to share their experiences as they strive to execute on the goals of their foundations.
Supporting good causes that are meaningful is the number one goal, but how to ensure that support is truly impactful is just as important. And there is no one correct way to do this.
Sometimes a philanthropist just happens to meet someone with a mission that resonates and everything clicks. That is the well-known story of Ronald O. Perelman’s introduction to Dr. Dennis Slamon in the early-1990’s. Mr. Perelman learned of Dr. Slamon’s breast cancer research at UCLA and of his need for additional funding. Following his gut, Mr. Perelman offered support, and Dr. Slamon’s work led to the accelerated development of the drug Herceptin.
But most successful funding decisions require more than passion and great instincts. These decisions require an understanding of needs, comparative strengths of the people and institutions that can address them, and assessing the funder’s risk tolerance. Philanthropy has changed dramatically from the early days of the Rockefellers (for the record though, while the new generation of Rockefeller giving is vastly different from the elders, it is very exciting and meaningful). Even the Ford Foundation has dramatically changed its style of giving, while keeping true to its ultimate goal of improving society. Ford now recognizes the need to help build the institutions they support by giving funds for operating expenses—whereas previously funds were largely reserved for project costs.
Sean Parker’s “Philanthropy for Hackers” (WSJ, 6/26/15) is inspiring in this regard. He created a $600M foundation and he intends to spend those funds during his lifetime. He is not looking to create an “unwieldy” institution. He wants to leave “a world better off then [he] found it, one that [his] children can manage to live in.” Mr. Parker states he is not afraid to fail. And at the same time, we know he will be thoughtful and bold when he approaches problems.
So whether you have hundreds of millions of dollars to donate or a more modest amount, you can have impact if you go about decision-making in a thoughtful way. Do the research, discover the needs, talk to the right people, and trust your gut. You never know what can sprout.