Transformative Philanthropy and Innovation | Milken Institute Global Conference 2024

Context and Participants

• The session focuses on "transformative philanthropy," defining it as society's risk capital, a policy shaper, and a connective tissue between sectors and ideologies.
• Pablo Legareta: CEO/Founder of Royalty Pharma; focuses philanthropy on medical research, clinical care, and health equity.
• Strive Masiwa: Founder of Econet Group and Higher Life Foundation; signatory of the Giving Pledge; board member of the Bill & Melinda Gates Foundation.
• Dame Louise Richardson: President of the Carnegie Corporation of New York; focuses on education, international peace, and mitigating polarization.
• Mark Walter: Founder/CEO of Guggenheim Partners and TWG Global; focuses on social impact, education equity in Chicago, and conservation.

Philanthropic Philosophy and Historical Context

• Andrew Carnegie's Carnegie Corporation was endowed with assets equivalent to 2% of US GDP in today's dollars, establishing a mission to advance education and peace with a "scientific" approach.
• Carnegie's "Gospel of Wealth" principle asserts that "the man who dies rich dies disgraced," driving a philosophy of giving away all fortune before death.
• Louise Richardson emphasizes that while the Carnegie Corporation holds a "lodestar" for long-term progress, its trustees retain the flexibility to adapt strategies to a rapidly changing world.
• Strive Masiwa argues that African philanthropy is often defined differently than Western models, with the largest foreign exchange inflows to Africa coming from diaspora remittances rather than international aid.
• Masiwa notes that Africa's GDP grew from $350 billion to $3 trillion over 60 years, with literacy rates rising from less than 10% to 80%, driven primarily by African governance and citizen contributions.

Strategic Applications in Specific Sectors

• Healthcare Innovation (Legareta): Philanthropy serves as critical "high-risk capital" for life sciences where 95% of experimental therapies fail and development costs exceed $1 billion over 14 years.
• Transplantation Breakthrough: Legareta funded the commercialization of an antibody therapy that allows transplant patients to cease lifelong immunosuppressants by inducing immune tolerance via bone marrow donation.
• Impact Metrics: The immunosuppression therapy has been successfully applied to 30+ patients, with Legareta's son requiring only one pill every three days, aiming eventually for zero immunosuppression.
• Education Systems (Walter): Mark Walter's initiatives in Chicago focus on closing the post-secondary gap by teaching "meta-skills" like studying and entrepreneurship starting in the 4th grade.
• Systemic Resistance: Walter observed that expanding successful educational models can trigger resistance from traditional systems, citing a case where a new vocational school was opposed by local authorities despite the model being copied and credited.
• Conservation (Walter): Conservation efforts in Zimbabwe treat 95% of the challenge as a community engagement issue, providing clinics, schools, and economic processing equipment to villages bordering a 1-million-acre reserve.
• Poaching Results: Community integration in the Zimbabwe reserve reduced rhino poaching from one per week to one every three years over the last decade.

Addressing Polarization and Societal Cohesion

• Richardson identifies binary thinking and a lack of unifying institutions (unlike the UK's NHS or BBC) as primary drivers of US political polarization.
• Carnegie Corporation is funding approximately 30 academic researchers for two years to develop strategies mitigating polarization.
• Richardson advocates for philanthropy to pivot toward "integration" (e.g., teaching English to migrants) to demonstrate economic utility and counter criticism of immigration spending.
• The panel agrees that polarization threatens progress, but medical philanthropy (Legareta) remains largely immune as providers and funders prioritize results over political identity.

Sustainability and Funding Models

• Philanthropy's End Game: Masiwa states that "good philanthropy is one that does away with itself," relying on sustainable governance and local resource mobilization rather than perpetual aid.
• Capital Recycling: Masiwa's Reimagined Rural Fund utilizes concessionary capital and revolving low-cost loans to create self-sustaining financial ecosystems.
• Equity Ownership (Walter): The Walter organization owns equity stakes in private companies that employ students, using profit growth to fund future educational programs.
• Risk Management: Richardson warns that philanthropy faces vulnerability from both the political right (accusations of funding liberal causes) and left (accusations of tax avoidance), necessitating a proactive approach to build allies.

Scaling and Community Engagement

• Activating Capital: The panel urges wealthy individuals to move capital off the sidelines into active, results-oriented giving, citing Chuck Feeney as a model for lifetime giving.
• Cultural Models: Legareta and Richardson note that while the US has a unique culture of giving, global philanthropy exists in diverse forms and should not be defined solely by Western tax structures.
• Youth Engagement: The consensus is that "time is the greatest philanthropy," with youth encouraged to volunteer rather than donate money they do not have.
• Civic Service Initiatives: Programs in Utah, Maryland, and California are replacing military service as a vehicle for cross-racial and cross-class community building, offering university funding for a year of community service.

Forward-Looking Statements and Outlook

• Global Demographics: Masiwa highlights Africa's demographic dividend, with a mean age of 19.7 and a projected population of 2 billion in 30-40 years, representing significant future potential.
• Corporate Culture: Legareta notes that philanthropy is becoming a key recruiting tool and morale booster, with 100% of employees at Royalty Pharma willing to volunteer time off.
• Hope: The panel identifies hope in the measurable success of marginalized youth (Walter), the spirit of giving among corporate employees (Legareta), and the sheer population and energy of the African youth (Masiwa).
• Goal: The collective aim is to utilize philanthropy as a catalytic force to achieve a "shared future" that is fair, equitable, and peaceful, eventually making the sector obsolete by solving the root problems it addresses.