Activist Philanthropy: Upping the Ante for Giving

Problematic Status of the Nonprofit Sector

• There are 1.6 million nonprofits in the U.S., a density that typically triggers M&A activity and consolidation in for-profit industries, yet the sector remains fragmented.
• Only 300 out of the 300,000 new organizations created since the 1970s have ever achieved $50 million in revenue.
• Consequence of Single-Issue Focus: Unintended negative outcomes occur when philanthropy cures immediate problems (e.g., keeping HIV patients alive) without creating economic capacity for those patients to participate in the economy.
• Government Burden: As antiretroviral costs drop in African nations, local budgets often fail to increase, leaving governments struggling to sustain the health gains made by philanthropy.
• Talent Gap: Philanthropic organizations often underinvest in talent acquisition, relying on low wages that prevent them from hiring top-tier problem solvers needed for complex global challenges.
• Need for Recyclability: Successful philanthropy should utilize financial structures that return capital for reuse, moving away from unidirectional check-writing toward sustainable capital redeployment.

Linda & Rich Resnick (Central Valley Philanthropy)

• Methodology: Before funding, the Resnicks conducted house-to-house surveys and focus groups in Lost Hills, interviewing every resident to identify specific needs.
• Scope of Impact:
  • Education: Impacts 55,000 children; 80% stay in college, with 100% of charter school graduates receiving college scholarships.
  • Health: Provides free medical care to 12,000 people, including doctors, nurses, and psychologists.
  • Civic Engagement: Established the first polling booth in Lost Hills and hired interns to teach voting, resulting in emotional breakthroughs for first-time voters.
• Career Pathway Initiative: Created a "farm of the future" program for 8th graders to identify career interests in "New Ag" (engineering, mechanics, CAD), leading to Associate of Arts degrees by high school graduation.
• Economic Model: Graduates of the program are positioned for $35,000–$55,000 entry-level jobs, addressing a 40% youth unemployment rate in the Central Valley.
• Corporate Philanthropy Model: "Wonderful Giving" provides every employee $1,000 annually to donate to local charities, with company matching up to $15,000, engaging 98–99% of the workforce.

George Weiss (Say Yes to Education)

• Holistic Model: Shifted from a "one-off" school approach to a city-wide partnership model covering Buffalo, Syracuse, and Guilford County.
• Key Interventions:
  • Legal Aid: Provides free legal support to any family with a child in the public school system.
  • Health Integration: Established mental health clinics in every school, addressing the 24.8% rate of mental health issues in inner-city youth.
  • Social Workers: Hired a dedicated social worker per school, contributing to a 43% drop in foster care placements in Syracuse.
  • Data Monitoring: Implemented student monitoring systems to track home issues and academic progress, overcoming data opacity in public systems.
• Outcomes:
  • 6,000 students have gone to college; 90% retention rate in college due to mentorship.
  • Partnerships with 100 private colleges, including Ivy League schools, to fund tuition and mentor graduates.
• Expansion Strategy: Moved from single-school pilots to district-wide "highway" approaches (e.g., 285 11th graders in Harlem with near-zero teen pregnancy and felony rates).
• Orphan Disease Center: Created a center to address diseases affecting fewer than 250,000 people, leveraging $5.5 million grants to solve specific cases like MPS1 and ALS.
• Financial Strategy: Applies business acumen to non-profits, using administrative committees to guide research dollars and ensuring 80% of funds go to research rather than overhead.

Precious Motsebe (South African Philanthropy)

• Motivation: Joined the Giving Pledge in 2013, driven by the belief that personal success is inextricably linked to the well-being of the poor in South Africa.
• Education Strategy:
  • Provides non-repayable bursaries (not loans) for STEM students from poor rural communities.
  • Targets students likely to return to Africa to build infrastructure, healthcare systems, and data capabilities to combat diseases like Ebola.
• Economic Empowerment:
  • Uses a "teach a man to fish" approach, investing in youth and women-owned businesses with private equity-style due diligence.
  • Expects a 3-to-5-year investment horizon before exiting, allowing profits to be reinvested in the community.
• NGO Selection: Avoids funding NGOs created solely for access to funding; relies on 26 local "development forums" and community leaders to vet partners.
• Systemic Insights: Observed that supporting women leads to improved family health, lower infant/maternal mortality, and increased family income.
• Challenges: Noted that high unemployment led to some NGOs being founded merely for job security, which were deemed unsustainable.

Shawn Fanning (Cancer Immunology Initiative)

• Market Failure: Identified that only $40–$60 million (of $4–$5 billion NCI spending) went to cancer immunology, despite its potential as a universal platform technology.
• Strategic Gift: Announced a $250 million gift to create a consortium of six top cancer centers (MD Anderson, Memorial Sloan Kettering, Stanford, UCLA, UCSF, Penn Medicine).
• Forced Collaboration: Overcame institutional barriers by requiring immediate data sharing and breakthrough availability across all six centers, a novel "evergreen" model.
• Financial Innovation: Created a self-financing model where the $250 million generates revenue over time through IP administration, retaining ownership within the consortium while recycling capital.
• Success Metrics: Success is defined not just by cures, but by turning specific cancers (e.g., melanoma, blood cancers) into manageable chronic diseases.
• Cultural Shift: Advocates for philanthropists to accept failure as a business variable and set clear timeframes to prevent dependency.

Cross-Cutting Themes & Forward-Looking Statements

• Generational Shift: Younger philanthropists (30s–40s) are engaging earlier, driven by rapid wealth accumulation in tech and a desire to solve "engineering riddles" in life sciences.
• Talent Mobility: The trend of professionals moving between for-profit and non-profit sectors is increasing, allowing for the infusion of business skills into the charity space.
• Marketing Deficit: Non-profits often lack marketing expertise; business professionals are urged to provide pro bono strategic advice to amplify impact.
• Community-Led Solutions: Emphasis on humility, where philanthropists must sit with constituents (e.g., visiting homes in Lost Hills or South African townships) to understand that local communities know best what is needed.
• Systemic vs. Individual Change: A distinction is drawn between "giving that changes lives" (individual aid) and "giving that changes systems" (structural reforms in education, research, and economics).
• Sustainability Requirement: Successful philanthropy must be designed with an "exit" strategy to ensure organizations become self-sustaining rather than dependent on donor checks.