Chapter 19
Giving Back
My parents were hardworking but not wealthy people. My father painted houses until he saved up enough to open his own five-and-dime. My mother was a seamstress and later worked in the store and kept my dad’s books.
Obviously, they didn’t have money to give away, but they were generous with what they did have to spare—time and passion. My father spent many of his off-hours helping out at the Workmen’s Circle, a nationwide Jewish social, political, and charitable organization whose left-wing politics he shared. Most of my parents’ friends also were involved in the circle, which, as the name suggests, was concerned with labor issues and with enriching the lives of working people. The Workmen’s Circle launched a network of Yiddish schools for children, ran housing cooperatives in our Bronx neighborhood, and pooled funds for everything from strike benefits to burials.
My parents also helped support my mother’s brother, Joseph, who was one of the few family members to stay behind in Europe. He went to a university in Berlin, but when it came time to decide whether to go to America or stay in Western Europe—where it was becoming difficult for Jews to live in peace—Joseph chose a third option. Despite the precariousness of his own situation, Joseph worked to establish a school for Jewish children in British Palestine. The tradition of scholarship was deeply rooted among Lithuanian Jews. Among the graduates of the school my uncle helped found in Palestine is the two-time prime minister and current Israeli President Shimon Peres. My uncle ended up being a character in Leon Uris’s best-selling chronicle of the birth of Israel, Exodus.
I still remember my Uncle Joseph’s visit to the Bronx when I was a boy. I recall his kind face and his hunchback. He was humble, an extraordinary example of a man devoted to giving without expecting anything in return. Uncle Joseph taught me you don’t have to be rich to give—and that what you give can change the world.
My strongest example of that philosophy, though, was my mother, who named me for her grandfather Eliezer. My mom and I had a great deal in common. We were both instinctive savers rather than spenders, and we shared an intellectual bent. My mother also had an appetite for long hours and hard work that I inherited. She stayed late at the store and, when my father was out socializing, she cooked for me and did his accounts. Neither of us was as outgoing as he was. My mother was quiet but easy to talk to. Despite her prosperous upbringing, she was gifted with a needle. If she simply saw someone with an expensive dress and coat, she could make patterns and sew perfect replicas for her sisters. She gave, with an incredible selflessness, all she had to her family. And when my mother got sick in her later years, she came to live with us at Edye’s insistence.
I chose the epitaphs for my parents’ headstones. On my mother’s I had engraved, “Nobody Had a Better Mother,” and on my father’s, “He Loved Life.”
I’m still trying to live by their examples.
Everyone Can Be a Philanthropist—Not Just the Rich
The words philanthropy and charity once meant simply the love of humanity, the former from the Greek and the latter from Latin. Somewhere along the way, the meaning of each term narrowed. Charity became almost pejorative—a handout, a kind of help that was unwanted and did more for the giver than the recipient. Philanthropy, meanwhile, came to be considered the province of rich people.
Today, philanthropy has become a sophisticated undertaking by successful professionals aided by a staff. This new notion of philanthropy has, without a doubt, improved giving for the better. Creating a cadre of professional managers and bringing the best practices of the business world to bear makes giving well-researched, well-reasoned, well-executed, and accountable at every step of the way. Philanthropy aims to make the world a more peaceful, prosperous, wiser, healthier, and more livable place. Philanthropy may be conceived as an exercise of the heart, but those are goals worthy of our head’s best efforts. That’s not to say that check-writing charity doesn’t have its place. What counts is that you give. For me, though, hands-on philanthropy is the more meaningful way to give back.
And philanthropy isn’t just a pursuit for the wealthy. My parents’ example demonstrates just how wrong that is. Philanthropy is about involvement. Pick your issue, work at it, and do your best to make things happen. Even if you’re not wealthy, you have time, expertise, skills, and other resources you may not even have realized can be used to serve others.
Don’t Just Give It Away—Look for the Place to Make a Difference
If you want to be actively involved in a philanthropic pursuit, don’t check your critical and intellectual faculties at the door of any cause—no matter how worthy it appears. It’s surprising how many people still hand away their money and time without thinking about whether they’re doing the most good or achieving the greatest change with their efforts. Too often donations are based only on sudden, impulsive pangs of the heart, which, although understandable and admirable, may fall short of producing the results the donor wants.
That’s why it’s crucial that you apply an appropriate set of metrics to your giving. Make sure in advance that you have some way to measure the impact of your investment. If you’re in a position to be generous enough to make grants, it can only help to know from the start what results you and your grantee want to achieve. However unreasonable it may seem, there’s nothing hard-hearted or domineering about holding those to whom you give accountable. When our foundations invest in education reform, for example, we want to see many more students, of all income and ethnic backgrounds, making dramatic academic improvements. In scientific and medical research, we look for proof that scientists are getting closer to curing diseases and improving human lives around the world. We track our progress by how many groundbreaking journal articles, published papers, clinical trials, and patents our grantees generate. When we make grants to arts organizations, we expect increases in their audiences and museum traffic.
Whether you’re making a foundation grant or deciding to which organization you want to donate your time, talent, and money, you should have an idea of what your beneficiary’s success will look like. The goal can be distant, but there should be a clear one.
Start Giving Now—And It Doesn’t Have to Be Money
Edye and I were early signatories to the Giving Pledge, which was conceived by Bill and Melinda Gates and Warren Buffett. A lot of us were dubbed pretty unreasonable by our peers because by signing we promised to donate the bulk of our net worth to philanthropic efforts during or after our lifetimes.
I understand it’s a little harder to decide how much to give when you have limited dollars to work with. Some people, like the ethicist Peter Singer, will tell you to give away half your money. It’s an admirable goal but one I would say is impossibly unreasonable for most people, out of reach when you have to worry about providing for your children, holding on to your home, having enough money for retirement, or being able to cover your health costs. Some religious faiths suggest giving 10 percent of your annual income, which I believe is a sound and generous goal that many people can achieve, yet too few do. Dozens of companies in Minneapolis, Minnesota, following Target’s lead, give 5 percent of their pretax net income, another worthy effort.
If you run a business and you aren’t yet doing some type of philanthropy, there’s no reason to wait. In the past, only the biggest corporations pursued philanthropy. Today, consumers and corporate culture demand that all profitable companies give something back. Some business models factor in philanthropy, a smart way to create change and win loyal customers. Take TOMS, the Santa Monica, California–based, for-profit shoe company. For each shoe a customer buys, the company donates a pair to a child in need. TOMS founder Blake Mycoskie created the company based on that principle.
Think about how you can use your business’s expertise and competitive advantage to make a difference. Apply your business’s special skills—whether it’s Web design or baking—to doing good. Give your employees some time to pursue volunteer work. Chances are, they will take more pride in their work for you and your organization.
And, as always, lead by example. Too many entrepreneurs think they will get around to giving back when they have more spare time—something likely to remain in short supply. If you find yourself in that position, follow Warren Buffett’s example. You don’t have to re-create the wheel by starting your own foundation. Give to somebody else’s, as Buffett did to the Gates Foundation. But if you want to donate a portion of your wealth to someone else’s foundation, make sure you agree with the causes they support and their approach to philanthropy.
When you give, don’t be afraid to talk about it. It can only help bring a good cause to other people’s attention. Think back to the chapter on leverage, because its lessons also apply to philanthropy. Speaking publicly about the causes you’ve embraced is important because many nonprofit organizations depend on such exposure to get attention and do more good. My desire to leave an admirable legacy, and to honor my parents, is only part of the reason I’ve had our family’s name inscribed on the buildings we fund. I’ve always thought seeing our name there—and knowing all the good work that goes on inside—would challenge others to give too.
Be a Philanthropic Game Changer—Start Local and Think Like an Entrepreneur
At The Broad Foundations, we give where we believe we can be game changers. Edye and I had the good fortune to be advised by our board member Larry Summers, the former Harvard president, U.S. Treasury secretary, and economic advisor to President Barack Obama. He helped us define our three criteria for making a philanthropic investment:
Those three tests have helped set a course for our philanthropic investments. The best illustration is the Broad Institute in Cambridge.
We added to our work in education reform and the arts and decided to invest in the field of scientific and medical research, because we saw opportunities in genomics and stem cell research that passed our three tests.
In the case of The Broad Institute, we didn’t know whether scientists from different fields would be willing to get out of their separate, far-flung labs to work together. We also weren’t sure whether a partnership between Harvard and MIT would work, because it never had been attempted. And we had a lot of money riding on the answers.
The institute has been a great bet. And although we do take big risks in philanthropy, I am a bit more cautious than I was in business. The money we’re working with—all of it earmarked to do good and all of it growing through investments—is precious. In a sense, instead of shareholders, we work for future generations who stand to benefit from the change we can create. That’s a constituency we can’t afford to disappoint.