http://www.atlanta168.com/forum/ ... ly&tid=6080
The Death of Big Charity
Mindy Rosenthal of the Institute for Private Investors has been interviewing young ultra-high-net worth investors. These individuals, most of whose families are worth over $100 million, do not respond to surveys or questionnaires; you have to know someone to get to them. That makes her data set uniquely valuable. One disruptive juggernaut lurking within it is the attitude of the young and the ultra-affluent (could that be the title of a soap opera?) toward charity.
While their parents were happy to write elephantine checks to the “American Big Disease Association” or the “Big City Cultural Institution” or “Ye Olde Ivy College Foundation” or the “Mainline Church Denomination”, the kids (and by kids here I mean from age 18 through their 30s) have little interest in outfits like these.
Americans love to be charitable, and the tax-deduction for charitable contributions is nearly as old as the tax code itself. The ultra-high-net-worth, when faced with enormous tax bills, would rather give their money to charity than to big government. For charities, this has created an interesting arbitrage: as long as they could be only slightly less wasteful than the government, plus could plate up some ancillary perks in the form of social recognition and a “feel-good” giving experience (where the IRS notably falls down, in my opinion), they held the trump card.
But once you go beyond the photograph of the baby seal and the donor cocktail party fabulous, you find agency problems galore. That is to say, these institutions are principally interested in their own aggrandizement. The mission statement over the door is just a magic carpet to that end. Invariably, their charity begins at home. My pal Ben Stein described in The New York Times how Yale University today is basically a hedge fund with a small college attached. Consider that the worst thing for the American Cancer Association would be if someone actually found a cure for cancer.
Don’t take my word for it — read Ken Sterns’ book. I’m just a soul whose intentions are good, yet having written my share of checks to 501(c)(3) charitable organizations over the years, I fear most of this money has been wasted. When you look at the new $500 million headquarters for the Bill & Melinda Gates Foundation — supposedly the good guys in the room? — you can’t help but wonder what kind of stewardship is being practiced.
The young ultra-affluent have figured all this out. They are bypassing their parent’s antebellum eleemosynary institutions. Which means these Tutankhamen-sized charities are headed for the mothballs right along with the mink stoles. The New York City Opera and various symphony orchestras around the country falling like tenpins are just aperitifs.
Is this because these whelps of Wall Street are not interested in helping? Far from it. Forty-six percent are focused on doing good in their communities, and nineteen percent plan to become full-time philanthropists. Here’s how they roll: they get involved in hands-on niche projects where they can make a difference. They want to see demonstrable results. Program evaluation is a must-have. They want to get in and they want to get out. They are not interested in providing an annuity to some tax-deductible charity organization. They will give them a fish and teach them to fish but they will not become the fish.
What are their causes? Two stand out: education and green. Well-educated themselves, they think school is cool. They want to plow the parking lot and put up paradise. In small-scale, targeted, active interventionist ways.
The Dakshana Example
Mohnish Pabrai’s Dakshana Foundation is a poster child for this kind of enterprise. Pabrai and his wife wanted to start giving away money while they were still young, not let it compound until they were 80 and then write the big check to big charity. They knew it was easier to make a dollar than to give one away effectively.
As they surveyed the field, they noticed that charities virtually never had a discussion of measurable results or return on investment. The annual reports never mentioned any mistakes they made. They just seemed to sprinkle money around like fairy dust.
The Pabrais identified a narrow, unserved group to help (poor or handicapped young people in India smart enough to qualify for advanced education in engineering) where the benefits of their investment would be leveraged. They decided to start small and keep expenses low. They knew they would make mistakes but they didn’t want to make costly ones. They would run the charity as a business and make it self-sustaining. Pabrai’s annual reports are refreshingly honest and self-deprecating about their progress. This is the new paradigm. By the way, Dakshana has performed brilliantly, just off-the-charts.
No doubt some of these ultra-high-net-worth cubs will see their parents dying from big disease and want to support the eponymous nonprofit. Some will end up writing a big check to their church so the minister will say something nice at their funerals. As Adam Smith would say, there is a lot of ruin in big charity. The trend, however, is against them, and Rosenthal’s research tolls a death knell, or perhaps a long overdue wake-up bell. We gaze upon the chimes of freedom flashing. |
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发表于 2014-12-13 16:56:06
