Donor of the Day

 

Bill and Karen Ackman are billionaire investors. They like to support nonprofits at early stages. They look for ones where they know they can make a difference

Mr. Ackman, the chief executive of the New York-based hedge fund Pershing Square Capital Management, wasn’t planning to give a lot of money to his alma mater, Harvard University.

Karen and Bill Ackman

But he had a change of heart with his 25th college reunion.

The majority of the gift, $17 million, will go toward the expansion of the university’s Foundations of Human Behavior Initiative. The group is designed to work across departments to study the various mechanisms—economic, behavioral and psychological, for example—that influence human behavior, a subject that interests Mr. Ackman.

David Laibson, a professor of economics and a classmate of Mr. Ackman, is leading the initiative.

The gift will establish a research venture fund and three named professorships. The first professorship will go to Matthew Rabin, a scholar in behavioral economics and behavioral finance who created a fairness model that is widely used in game theory. Mr. Rabin will leave the University of California, Berkeley, to join the Harvard faculty in July.

People like Mr. Ackman and his wife are very much needed in the nonprofit philanthropy world. Based on the article in a interview last week Ackman said fairness is the main thing in his foundation called Pershing Square Foundation stated in 2006.

The foundation supports social justice, antipoverty and education initiatives, among others, and has awarded some $235 million to date.

In 2012, the Ackmans joined the Giving Pledge, a public commitment started by Bill Gates and Warren Buffett in which billionaires agree to dedicate the majority of their wealth to charity.

The remainder of the money will be split between Harvard Medical School and Harvard Athletics. The Pershing Square Foundation will fund a $4 million chair in Global Health for Dr. Paul Farmer, the Kolokotrones University Professor of Global Health and Social Medicine. Dr. Farmer is one of the founders of Partners in Health, an international nonprofit health-care organization.

The last $5 million will support the men’s crew team.

Mr. Ackman rowed during college, but not in the first boat. He was stroke on the third boat. Still, the experience taught him that he is able go beyond perceived limitations, persisting when “the pain is enormous and continuous.”

Source: Wall Street Journal

Evidence-Based Giving

We all want a bang for our buck. When it comes to charities, people are even more serious about their money. Farhad Manjoo, a columnist with the Wall Street Journal, reported on GiveWell. Holden Karnogsky and Elie Hassenfeld gave up their hedge fund analyst jobs in order to create a company to properly review charities.  GiveWell reviews charities similarly to the way a company’s stock is reviewed.  This 11 person full-time staff evaluates individual charities and reports what you will get for the money you give. Manjoo refers to this type of giving as “evidence-based giving”.  According to Bloomberg Businessweek, these organizations are analyzed through evidence of effectiveness, need for funding, transparency, and self-monitoring.  After the researchers are done with their analysis, they recommend a mere 2% of the organizations.

In a digital age, we don’t do much without first doing research. GiveWell is making charitable research that much easier. For example, you can treat a child in Africa with deworming medication for one dollar. On the other hand, if you want to make an impact on a westernized child’s schooling, then you would need to give between $10,000 and $20,000. This information empowers people to make better-informed decisions when giving to charity. A potential donor will also know the exact amount of money they need to give to make an impact on. Overall, you will get a better bang for your buck.

Another resource GiveWell offers is recommending charities to potential donors. These recommendations tend to be geared toward smaller charities in foreign countries in which most are not familiar. They outline the best charities they see and offer their audience efficiency in their decision-making. GiveWell also outlines their top three choices in charity. These are three organizations doing the best with the money they have received in the minds of the GiveWell researchers. These recommendations allow potential donors to either make a quick decision with the top 3 list, or go more into depth with the specific recommendations. GiveWell has disrupted the charitable industry and has brought a new way to research charities.

Would you be more inclined to give to a charity that has secured a GiveWell Recommendation?

In the future, would you be inclined to use GiveWell or a source similar to GiveWell?

Social Media Inspired Giving

The Zuckerberg’s were recently revealed to be the most generous philanthropists in 2013. “The largest donation of 2013 came from Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, who announced in December that they had given 18 million shares of Facebook stock to the Silicon Valley Community Foundation. The gift was valued at more than $990 million. This was the first time donors under the age of 30 have made the nation’s largest philanthropic gift, according to the report.” How does this impact Facebook, social media, and how does this change how charities raise funds? Should we expect this philanthropy to bleed into Mark Zuckerber’s professional decision making at Facebook? What have we seen that might stem from the philanthropic focus of the founder of Facebook?

Non-profits have generally kept pace with the growing social media platforms in recent years, but one thing many experts see as potentially lacking are the resources given to charitable organizations from such platforms as Facebook to use for fundraising. What else has social media spawned in the world of philanthropy? One example was the recipient of the largest portion of the Zuckerberg’s nearly $1 Billion giving in 2013, The Silicon Valley Community Foundation. The Silicon Valley Community Fund became the nation’s wealthiest philanthropic organization by using social media, as well as by their intimate understanding of the entrepreneurs in their community, and how they give. The SVCF partners with “the most effective organizations to create change”. This is the second bullet in their “What We Do” info on their website, the first; “We simplify giving so donors can focus on  their charitable passions.” Social media has provided a simplicity to charitable giving in way that has sparked record giving, not only by the nation’s “1%”, but also by everyone else on the networks. Charitable giving rose 4.9% in 2013 and many experts attribute this growth to new social media tools used to collect donations. Like the SVCF, non-profits are realizing simplicity in collecting achieves great results.

What are some other ways non-profits could simplify the collection of donations? Have you given to a charity in the past year, did you use social media or were you inspired to give because of social media? Do you think, like as with vacation trends, that this growth in giving related to social media is caused by greater awareness by way of personal testimony or word of mouth, or have non-profs done well to implement social media campaigns that create support for their cause?