Welcome to the new world of Innovations in Philanthropy – where business meets philanthropy!
“We’re very entrepreneurial (in philanthropy). We identify a problem, we analyze it, and we move,” states former president Bill Clinton in the Fortune Magazine report on the Power of Philanthropy.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Clinton’s Influential Foundation
Bill Clinton oversees many philanthropic initiatives – in particular, his own William J. Clinton Foundation focuses on HIV/AIDS, Global Warming, Urban Empowerment, and Childhood Obesity. The overarching goal of the foundation: “Bringing opportunity and investment to people and places – many in the Third World – where support systems and resources are in short supply.” The main selling point of the Foundation: the tremendous influence that Clinton leverages with world leaders including Paul Kagame, the president of Rwanda, Bingu Wa Mtharika, president of Malawi, and Tony Blair, prime minister of UK; business leaders including Rupert Murdoch and Bill Gates; driven heroes such as Dr. Paul Farmer in the world of medicine famous for treating AIDS through antiretroviral treatment (ARVs); longtime aides including Magaziner; and even rock stars including Madonna and Bono.
Show Me The Money
The Clinton Foundation has no money. Clinton’s sheer passion, energy, entrepreneurship and influential personality drives the foundation forward – or as Doug Band, Clinton’s former personal aide calls his “ability to motivate people and move mountains.” Clinton has not only tied up with former adversary Rupert Murdoch on the Global Warming initiative against climate change, but also long-time allies and FOBs, executives, activists – known and unknown – and leaders including Beth Collins, director of the foundation for Rwanda. And for all the publicity that Clinton’s foundation wields, the annual budget is only $30 million for next year. “Our way adds value,” quips Clinton and “forces you to look closely.” According to foundation’s CEO Bruce Lindsey, the foundation has no committees and no processes, and “if a decision needs to be made, we make it. If we can help, we help now, not tomorrow.”
Gates Foundation – Money And Proven Results
Compare Clinton’s foundation to Bill & Melinda Gates Foundation, the world’s largest philanthropy foundation that has over $30 billion in endowments, $11 billion in total grants, and over $1 billion in annual grants. As if this scale and size was not huge, in June, 2006, Warren Buffett decided to begin giving away 85% of his stated wealth of $44 Billion to philanthropy - most of it to the Gates Foundation. Why did Buffett choose Gates Foundation? Buffett who had said in the past that most of his wealth will go to philanthropy after his death decided to step forward and begin giving now.
"I know what I want to do," Buffett said, "and it makes sense to get going." The reasons on why Buffett chose Gates Foundation go beyond the years of friendship between Buffett and Gates. It has to do with the Gates Foundations’ innovations in philanthropy driven by the combined passion of Bill Gates, Melinda Gates, and William H Gates Sr., focus on results showcasing real impact from the programs, fundamental belief that every life has equal value, and proven programs seeking solutions to poverty and hunger, reshaping a healthier world, creating opportunities for all, and improving the lives of at-risk children, youth, and families.
Strategic Partnerships Driving Philanthropy
Clinton created strategic partnership with Sir Tom Hunter, Scotland’s richest man, towards establishing the Clinton-Hunter Development Initiative whose objective is to double the income in Malawi and Rwanda. How did this partnership happen? Lindsey sums it up: “We’ll take all the happenstance we can get.” Hunter was seated next to Clinton at a dinner party in London, and the two began talking about poverty, healthcare and clean water. Clinton seized the opportunity and created the new initiative with Hunter. A similar opportunity is collaboration with former competitor and former president George H.W.Bush by creating the Hurricane Katrina recovery fund to help rebuild New Orleans; and a Public education program designed to help low-wage Americans take advantage of the earned-income tax credit.
In a similar vein, the largest philanthropic partnership between Gates and Buffett began this year, which in the years to come will be regarded as the new standard of philanthropy. And the recently announced alliance between Gates Foundation and the Rockefeller Foundation, the original standard of philanthropy, to contribute to a “Green Revolution” in Africa that will dramatically increase the productivity of small farms, moving tens of millions of people out of extreme poverty and significantly reducing hunger. In today’s world, increasingly, strategic partnerships are driving new philanthropy where partners complement reach and pioneering work with endowment, unite a shared vision with execution, and literally join hands to work together towards a greater cause.
Public Galas Generating Philanthropy
Clinton hosts the annual Clinton Global Initiative (CGI) in New York, where some 1,000 influential leaders, politicians, activists, stars, emissaries and the likes attend to bring together strategic ideas and funding. On the one hand the event is literally a celebration with the who’s who of the world, on the other all CGI participants sign a commitment, outlining specific activities that they will conduct in the upcoming year. So far, the Clinton influence and CGI initiative in 2005 have driven companies such as Citigroup to pledge $5.5 million towards discussion of microfinance, the Gates Foundation commitment for a discussion on healthcare, hedge fund legend Julian Robertson foundation’s drive for climate-change program, Goldman Sachs pledge of $12 million to preserve the Tierra del Fuego ecosystem, Governor Manuel Andrade of the Mexican state of Tabasco promise of $9 million to distribute to 15,000 poor women conducting small business, McKinsey’s collaboration for best practices on disaster relief, city of Porto Algere, Brazil’s assurance of a mass transit system, Cisco Systems agreement to provide $2 million in total pledge to Acumen Fund, an antipoverty initiative and more. The total pledges for 2005 were more than $2.5 billion. The key questions critics of Clinton initiatives pose are one of follow-through on these commitments (for instance, who from Clinton’s foundation is going to ensure that there is delivery every year), and whether some of the commitments are old or ongoing commitments simply demonstrated as new commitments.
The Clinton Way Of Philanthropy
Fortune article sums up the Clinton way on driving innovations in Philanthropy:
1. Everything begins with Bill
The foundation leverages the Clinton vision, influence, collaboration, contacts on everything from driving better solutions for HIV/AIDS, Global poverty, Climate Change and Obesity. Joe Cerrell, director of Global Health advocacy at Gates Foundation agrees: “There’s no question that the work and the accomplishments have been dramatic.”
2. “Can we make a difference?”
It has to make a difference today; for example, Clinton’s drive on ARV reduced the annual cost of taking the drugs from over $500 to about $140 through complex partnerships with CHAI, Cipla, and Global Fund, and driven by Magaziner. Nobody had done this earlier, and nobody even thought this could be achieved. However, Clinton did it, and is now focused on even bringing down the costs further so that millions of HIV/AIDS sufferers can afford ARVs.
3. “Is someone else doing it better?”
The foundation makes a quick decision on whether to do it themselves and drive, or if someone else is doing it already and doing it better, partner with them and jumpstart the partnership. For instance, Clinton’s many partnerships with Gates Foundation, Hunter, Bush, Madonna, to jointly work together.
4. GO!
Clinton is focused on making an impact today, driven to channel all his creative energies towards creating initiatives that make a difference. Whatever it takes, the all encompassing goal is to leverage – NGOs, government, donors, executives, foundations – whatever, whomever towards making philanthropy happen today.
We were always in awe of President Clinton. What is amazing now is that the former president has become an entrepreneur, a student of philanthropy has become a master of the profession, and a consummate traveler has become a focused innovator of philanthropy.
The Robin Hood Of Philanthropy
Most of us have not heard of Paul Tudor Jones, the notable hedge fund manager, and his philanthropy foundation literally named Robin Hood – a band of hedge fund managers, executives and celebrities – whose goal is to fight poverty in New York City by taking lots of money from the rich, applying precise financial metrics towards the donations, and making philanthropy cool. Robin Hood foundation uses the venture philanthropy business model where “charity embraces free-market forces.” Who is in the band? How about Jeffrey R. Immelt, CEO of GE, Tom Brokaw of NBC News, Diane Sawyer of ABC, Gwyneth Paltrow, the famous actress, Marian Wright Edleman of Children’s Defense Fund, Lloyd C. Blankfein of Goldman Sachs, movie mogul Harvey Weinstein and more – in all a band of 28 members who have unmatched influence. Robin Hood has distributed over $525 million since inception to fight poverty in New York City through a myriad of programs focused on survival, early childhood and youth, education, jobs and economic security. And how does Robin Hood raise money? The biggest fund-raiser is the annual benefit gala and dinner where 4,000 of New York areas wealthiest citizens auction their riches like nobody’s business towards fighting poverty. Even Rolling Stones pitches in by playing benefits to raise money. Whereas before the primary donors were Board members, in recent years more than a third of the money comes from non-board donors. What is Robin Hood’s recipe for success? According to Fortune magazine, here is Robin Hood’s Rebel’s Code:
1. Every Dollar Counts
Every contribution goes towards programs. No hidden expenses.
2. Follow The Metrics
A rigorous benefit/cost benchmark is conducted on each grant by a staff economist. If the numbers don’t look good, grant is not given.
3. Don’t Save Your Powder
Spend everything it raises each year. No ongoing endowment.
4. Be Cool
Get celebrities, executives, public figures involved. In turn, this raises more funds.
The Maverick Of Philanthropy
If you have not heard of Paul Tudor Jones, you have definitely not heard of Marc Benioff, the founder and CEO of Salesforce.com, a company revolutionizing the world of software by providing software as a service. Benioff created a new integrated model of philanthropy – 1-1-1 – wherein Salesforce.com foundation donates 1% of company stock, 1% of company profits (through product) and 1% of employee working hours to the community. According to Benioff, this strategy has created great working morale at the company where employees have a higher sense of making the world a better place, and non-profit corporations such as Red Cross, United Way and more have benefited from the free software. Google also followed this integrated approach by putting 1% of the equity towards charitable grants. The key approach of the integrated model is to tie together the community, employees and company’s mission.
The Philanthropy Seeds Of Innovation
What are then the new innovations in Philanthropy? How is the world around us changing which in turn is changing Philanthropy as we know it? What were the old patterns and what are the new seeds of change? Great questions to ask. According to a study conducted on the Future of Philanthropy by Monitor Company Group, LLP, here is the new world of Philanthropy, or as the report states “the patterns in the innovation”:
My Personal Experience On Philanthropy
I have been of the old school where I have donated money as my way of earning my way into philanthropy. My family and I have made donations to the American Red Cross, the U.S. Army Families, Salvation Army, Big Brothers and Big Sisters, Katrina relief fund, Tsunami efforts, Leprosy and Blind children foundations, local Police and Sheriff’s departments, Earthquake relief efforts and local religious organizations. I am also an active volunteer member of the Fremont School District Technology Advisory Committee whose goal is to create the best technology platform for the entire school district. I am perhaps like most people who believe that donations equates to philanthropy. However, I have come to realize that donating money and sporadic time alone is simply not philanthropy. What is needed is a vision and drive that goes beyond donations to understand the real impact of your philanthropy and becoming actively involved in the philanthropy – towards becoming an innovator and champion of philanthropy.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
References:
Fortune Magazine: September 2006 Issue. The Power of Philanthropy.
Bill & Melinda Gates Foundation.
Future of Philanthropy: http://www.futureofphilanthropy.org/
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