Few commitments. Just 74 of the Forbes 400 have signed the Giving Pledge, though all are eligible.⁴

Slow progress in honoring commitments. Of the over two hundred who have signed the Giving Pledge, few have transferred anywhere close to the half of their net worth they committed to giving away in their lifetimes. The Bill & Melinda Gates Foundation commissioned a Bridgespan report in 2018 that focused on about two thousand of the very wealthiest American families—those with assets of $500 million or more—and found that they donated about 1.2 percent of their assets to charity in 2017.⁵ An Urban Institute study found, more generally, “no class of wealthholders gives away even 0.5 percent of their wealth in a year.”⁶

Meanwhile, their wealth is still growing. The personal wealth of every Giving Pledger has increased since they signed. “The rise in wealth is far outstripping the amount of giving,” said Rob Reich, a Stanford professor and scholar of philanthropy, in June 2018.⁷

Many Giving Pledgers (and other BillPhils) give to their private foundations and donor advised funds (DAFs),⁸ neither of which has an obligation to distribute a majority of the corpus during the donor’s lifetime. In the United States, foundations are required by law to grant no less than 5 percent of assets annually to nonprofits. Donor-advised funds are an IRS loophole of illogic, dating as far back as the 1930s,⁹ that is now too large to close—one gives up control to get their deduction but exercises control to “advise” where their donation goes. As a result, according to the 2020 Forbes 400, little of the BillPhils’ giving is going to operating charities. “With hundreds of billions of dollars in Forbes 400 members’ private charitable foundations, we can verify just a fraction of that sum is actually deployed annually to causes and communities in need,” said Forbes’s chief content officer, Randall Lane.¹⁰

Progress will be hard to track. The Giving Pledge is made publicly, although without any legal obligation to fulfill it, and Giving Pledgers and BillPhils in general have very limited requirements to report how much and to what organizations they give. And witness the Chan Zuckerberg Initiative (CZI) and other Giving Pledgers who have set up an LLC, a legal entity without any philanthropic meaning, or those who use DAFs. Both structures allow their philanthropy to be nearly opaque.

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Philanthropists have a long history of demanding transparency from grantees but offering little themselves. As a result, one must rely on one’s own observations and occasional fact-based reporting to assess their effectiveness.

Despite their sluggish start, there are reasons to hope that the BillPhils, led by the Giving Pledgers, can have great impact once they commit their financial and other resources more fully. The culture of philanthropy and the nonprofit sector generally has been changing dramatically and is poised for a truly transformative era. The center of gravity has shifted from the East Coast and Midwest to the West Coast. In 1975, you could visit virtually every major foundation in a day’s walk starting at Grand Central Station in Manhattan and then a quick trip to the Midwest. But since the founding of the David and Lucile Packard Foundation (1964) and the William and Flora Hewlett Foundation (1966), the Gordon and Betty Moore Foundation and Bill & Melinda Gates Foundation (2000), the Emerson Collective (2004), the Omidyar Network (2004), the Chan Zuckerberg Initiative (2015), and others, the center of gravity of philanthropy has become bicoastal. Grant seekers, including development officers from Ivy League universities, can enjoy the mild climate of West Coast winters as they make their now essential trips to Seattle and Silicon Valley.

Foundation leaders, both executives and board members, have historically been a relatively quiet group of professionals largely known only to themselves, and predominantly elite, white, and male. But the leadership of the philanthropic community, now with a broader geographic spread, changing societal demographics and cultural norms, is bringing new energy—in word if not yet fully in deed—to develop an increasingly diverse group of executives and board members.

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Witness Darren Walker, CEO of the Ford Foundation since 2013, who is openly gay and outspokenly Black, the son of a single mother, grew up poor in rural Louisiana and described himself as a “member of the first Head Start class.”¹¹ He is role modeling his commitment to diversity and inclusion in his staff and board and in his grantees. And Walker is a compelling, spirited, articulate but not strident public figure on issues of race, poverty, and social change as well as the role of foundations and philanthropists. One can ask how much he might achieve cajoling the famously political and bureaucratic Ford Foundation organization, but Walker—playing the role of the ultimate “insider-outsider”—is trying to inject “moral courage,” diversity, and hopefulness through his iconic leadership of the philanthropic community, bringing social justice to the fore.

With hopes of finding meaning in their lives and work beyond that provided on Wall Street or in consulting for large corporations, many of our nation’s top graduates now aspire to careers focused on social impact. In 2007, Stanford University established the Center for Philanthropy and Civil Society (PACS), which publishes the sector’s leading journal, Stanford Social Innovation Review (SSIR), and the Stanford Graduate School of Business established the Center for Social Innovation (CSI) in 1998. Stanford University also offers countless courses and research programs in poverty, global health, education, diversity, environment, and other areas for social impact. Over six hundred universities now offer courses for their students—and often alumni and friends—as well as research programs in philanthropy, social entrepreneurship, or nonprofit leadership,¹² in addition to areas requiring domain expertise, such as sustainability, economic development, and social justice.

In summary, our BillPhils are poised to seize the opportunity to help address our most pressing problems, though they have not yet done so, and their sluggishness is coming at a significant cost. Let’s defer to others a comprehensive review of the challenges we face globally and in the United States today. Suffice it to say that climate change may threaten our species before the end of this century; at a minimum, every year we delay ensures significant economic dislocation in some of our most impoverished and environmentally valuable geographies around the world. Furthermore, baby boomers, who in early adulthood pledged to bring “peace and love” to the world, have presided over dramatic growth in the socioeconomic gap that is now undermining our American social contract: our wealthiest 0.1 percent are worth about the same as all those in the bottom 90 percent combined.¹³ The last time we saw such levels of disparity was during the Gilded Age before World War I, which saw Henry Ford, Andrew Carnegie, and John D. Rockefeller create the foundations that are still a prominent presence in the philanthropic sector today. Racism, immigration, and the lack of basic social services such as health care and housing remain open sores in American society.

The dramatic decline in extreme poverty globally since 2000, driven mostly by capitalism in China, India, and developing countries, has been reversed, as the Covid-19 pandemic affected the poor more than the rich. Our great hope for the spread of democracy globally as we approached the twenty-first century has been undermined by autocratic regimes in Eastern Europe, Central Asia, and Latin America, and our great American experiment of a “nation of immigrants” now faces a powerful economic competitor with a far different makeup: 91.6 percent of China is comprised of one ethnic group, the Han.¹⁴

Finally, specialized artificial intelligence (AI), or machine learning, is already entrenched in our lives, as every click on one of our digital devices provides our personal data to some entities we know and some we don’t. We might someday find ourselves waking up to general AI, where a computer’s output might be impossible to distinguish from a human’s thinking. “The singularity”—when AI’s intelligence surpasses humans’—is no doubt something we should already be working to shape and influence.

Observers from outside the philanthropic community are starting to criticize the BillPhils, even questioning why our society has chosen to reward so many with so much for doing so little. Most notable are two books: Anand Giridharadas’s Winners Take All: The Elite Charade of Changing the World¹⁵ and Rob Reich’s Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do Better.¹⁶

A snarky if gimlet-eyed observer, Giridharadas describes several individuals in contemporary philanthropy in support of his view that BillPhils are the same people who have rigged our economic and political system to be skewed hugely in their financial favor. He likewise asserts that whatever their apparent philanthropic generosity, they are doing no more than returning a small portion of their ill-gotten gains and doing so completely on their own terms.

Reich worries that philanthropy is an antidemocratic force in our democratic country. Without a doubt, distributing funds for social needs at the whim of the winners of our “Winners Take All” economy—instead of via a fairly elected legislature—is more oligarchic than democratic.

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One prominent BillPhil, Laurene Powell Jobs, number twenty on the Forbes 400 list with $20.5 billion, is sympathetic to Giridharadas’s and Reich’s concerns, telling the New York Times, “It’s not right for individuals to accumulate a massive amount of wealth that’s equivalent to millions and millions of other people combined.… There’s nothing fair about that.”¹⁷

To sum up the criticism of Giridharadas, Reich, and others: “If you are so wealthy and smart and well-intentioned, why aren’t you solving today’s most pressing social problems? And, being more generous? And committing to change the socioeconomic system that represses many and has significantly advantaged you?”

Billionaire philanthropy as it is now practiced is usually not responsive to these critics’ essential concerns. Most importantly, unless and until we adopt a much more progressive tax regime to fund more comprehensive government environmental and social programs—a more social democratic approach to political economics, as is common in Scandinavia—we need our BillPhils’ trillions of dollars to achieve maximum impact in addressing our most important social needs.

The purpose of this chapter is to outline why and how BillPhils, if they truly want to maximize their impact, must abandon the principles underlying their current approach to philanthropy and shift to four very different principles, often the opposite of what they are currently pursuing:

First, shift from establishing perpetual foundations to “Giving While Living.”

Second, shift from viewing “philanthropy as risk capital” to primarily funding evidence-based interventions that have impact on large societal challenges now.

Third, shift from slow, bureaucratic, conventional organizational models to the “team of teams” model that is used broadly and successfully by most knowledge-based organizations.

Fourth, avoid the ego-distorting effects of philanthropy and instead instill the values and mindset of “servant philanthropy.”

Principle Shift Number One: From Perpetual Foundations to “Giving While Living”

Remember the goal of the Giving Pledge: “The Giving Pledge is a simple concept: an open invitation for billionaires, or those who would be if not for their giving, to publicly commit to giving the majority of their wealth to philanthropy.”

That said, the Giving Pledge founders have written, “Because Bill, Melinda, and Warren believe the right approach is to focus the foundation’s work in the 21st century, we will spend all of our resources within 20 years after Bill’s and Melinda’s deaths. In addition, Warren has stipulated that the proceeds from the Berkshire Hathaway shares he still owns upon his death are to be used for philanthropic purposes within 10 years after his estate has been settled.”¹⁸ Bill Gates and Melinda French Gates intend to fulfill that commitment despite their divorce. Warren Buffett said that he will continue to give through foundations, even after retiring from the Gates Foundation board.

So, what are other Giving Pledgers and BillPhils doing? Based on what we know so far, many are giving to and planning to maintain perpetual foundations. Perhaps they are following the norm set by their Gilded Age forebears such as Carnegie, Ford, Rockefeller, the heir of Russell Sage, and others. (Julius Rosenwald, an early leader of Sears, Roebuck, did give his fortune away while alive, most notably to African American schools in the rural South.¹⁹ He is likely less well known in part because there is no perpetual foundation bearing his name.)

The issue with perpetual foundations was best described by Henry Hansmann, Oscar M. Ruebhausen Professor Emeritus of Law at Yale Law School, who did much of the best work on the economics of nonprofits in the 1990s. As he was quoted in 1998, “A stranger from Mars who looks at private universities would probably say they are institutions whose business is to manage large pools of investment assets and that they run educational institutions on the side … to act as buffers for the investment pools.”²⁰

The Martian would likely view managing assets as the primary business of perpetual foundations, which often give away no more than the federally required minimum of 5 percent annually. As Hansmann also pointed out, “Saving is worthwhile only if you have a better use for the money in the future than you do now.”

The role model for today’s BillPhils should be Chuck Feeney, who in September 2020, at the age of eighty-nine, finished giving away his total personal fortune of $8 billion. Called by Forbes “The Billionaire Who Wanted to Die Broke,” both Warren Buffett (who called Feeney “my hero”) and Bill Gates give Feeney credit for helping to inspire the Giving Pledge.

Feeney’s original wealth came from cofounding and leading Duty Free Shoppers, founded in 1960. At first, he gave anonymously, with a highly discreet group of advisers and staff, including Harvey Dale and Joel Fleishman. Atlantic Philanthropies funded many education initiatives, including many at Feeney’s alma mater, Cornell, including the launch of Cornell Tech on Roosevelt Island in New York City, conceived by Michael Bloomberg when he was mayor; multiple initiatives supporting peace in Ireland and South Africa; developing health-care systems in Vietnam; and creating the Global Brain Health Institute at the University of California San Francisco and Trinity College Dublin.²¹

In 1980, Feeney founded General Atlantic (GA), originally to manage Atlantic Philanthropies’ funds but over time he encouraged GA to be a $40 billion global growth investment firm. Steve Denning, GA’s cofounder and chair emeritus, remembers that Feeney told him in his first job interview in 1980 about the two reasons why he created General Atlantic: “to provide other entrepreneurs the opportunity that he had to build a successful business. But, Chuck added, he was creating GA also to increase his ability to give back to society.”²²

Denning then describes candidly how Feeney explained his motivations for Giving While Living: “Chuck said he ‘derives great satisfaction in helping others and seeing the impact first-hand.’ Besides, he added with his typical wry humor, ‘when giving while dead, you don’t feel anything.’ ”²³

Let’s hope that the Feeney’s fellow Giving Pledgers lead more BillPhils to adopt his “giving while living” principle. John Arnold, the former hedge fund manager turned innovative philanthropist, adds, “The longer the distance between the person who funded the philanthropy and the work, the greater the risk of it becoming bureaucratic and institutional—that’s the death knell for philanthropy.”²⁴ And as Laurene Powell Jobs declared firmly to the New York Times, “I inherited my wealth from my husband, who didn’t care about the accumulation of wealth.… If I live long enough, it ends with me.”²⁵

Without a doubt, ending destructive climate change is the ultimate cause demanding action sooner versus later. Should we stand by and wait for the US government to pass a carbon tax and create the right green incentives for carbon-intensive businesses, and for the global community to push China and India to significantly lower their use of fossil fuels while still fostering their economic growth?

Instead, should our BillPhils protect their foundations’ corpus for perpetuity? Let’s leave aside the complex arithmetic of computing how much a foundation can give away annually and still sustain its perpetual status. A $1 trillion corpus would lead to $50 billion in grants annually, but for what benefit? To whom? At the risk of our species, our planet?

The “new assumption” for BillPhils should be what Feeney called “giving while living.” The arguments to support perpetual foundations or “when my (grand)children die” don’t carry much weight when examined. Perhaps one can cite Jesus Christ, who said, “The poor will always be with us” (Matthew 26:11). Well, yes, but are you arguing for someone to starve and be cold tonight for the comfort of another in a hundred years?

We must see clearly two ingrained assumptions that in fact are the supporting rationale for perpetual foundations. If a living founder forms their private foundation as perpetual, it’s about immortality, not impact. If a CEO or executive director and the board members don’t question the perpetual nature of their existing foundation, it is about organizational self-perpetuation, not impact, a not uncommon motivation throughout the social sector.

It’s one thing for a BillPhil to do what they wish with their wealth. It’s another thing for some self-anointed group of people three or five generations after the founder’s death to retain 95 percent of the total corpus so some other group of self-anointed people are able to do the same thing generation after generation after generation. Perpetuity is a very long time. Isn’t there some moral imperative to feed that hungry person or care for that sick person before they die? Or save the species?

Principle Shift Number Two: From “Philanthropy as Risk Capital” to Predominantly Funding Evidence-Based Interventions That Have an Impact on Large Societal Challenges Now

On October 14, 2019, the Nobel Prize in Economics was awarded jointly to Abhijit Banerjee, Esther Duflo, and Michael Kremer for their experimental approach to alleviating global poverty. Banerjee is the Ford Foundation International Professor of Economics at MIT. Duflo is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at MIT. Banerjee and Duflo, a married couple, are the cofounders and codirectors of the Abdul Latif Jameel Poverty Action Lab (J-PAL). Kremer at that time was the Gates Professor of Developing Societies at Harvard.

Those of us who have been part of the movement to bring facts and analysis to decision-making in philanthropy and nonprofits—including all the authors of the chapters in this book—raised a special toast to these winners of the Nobel Prize in Economics, true pioneers of ideas that drive social impact. To quote the Royal Swedish Academy of Sciences,

[T]heir experimental research methods now entirely dominate development economics.… [T]his year’s Laureates have introduced a new approach to obtaining reliable answers about the best ways to fight global poverty. In brief, it involves dividing this issue into smaller, more manageable, questions—for example, the most effective interventions for improving educational outcomes or child health.²⁶

The Nobel Prize marks not only that “experimental research methods,” such as randomized controlled trials (RCTs), transform development economics, and extreme poverty alleviation, but also acknowledges that evidence-based evaluations—usually some form of cost-benefit analysis—have proven to be useful tools to aid decision makers.

Unfortunately, almost all governments and large, established nongovernmental organizations (NGOs) have been sluggish in adopting the practices developed by these Nobel Prize winners and others in our “evidence-based” movement.

More disappointing is that many BillPhils are not seizing the lead in applying evidence-based practices in their grant-making. The core barrier to our movement to make philanthropic decisions—and nonprofit organizational decisions—based on the most rigorous evidence available lies in muddy incentives. My late, sweet mother’s rationale for ignoring her physician’s advice to have exploratory surgery to determine what was causing her chronic gallbladder pain illustrates one apparent paradox, “What if they find something?”

The same illogic no doubt underlies the common rumor that some NGOs do not inform their board or funders about their RCTs if they show null results. If a nonprofit isn’t sure whether its strategy actually achieves its mission and goals, and funders have yet to demand such evidence, why take the risk of bad results?

Muddy incentives or not, if a BillPhil is focused on true impact, there are significant areas of human need that can be addressed with evidence-based programs that have huge needs for funding. There is no more fundamental social justice problem facing us than poverty. The strong evidence-based intervention is giving cash, the new default for helping the poor. GiveDirectly (GD) has successfully pioneered digital and other forms of cash to alleviate extreme poverty in several African countries. In a decade, GD has distributed more than $300 million to hundreds of thousands of people. It has built in randomized controlled trials as part of its core managerial processes.²⁷ Furthermore, GD has demonstrated that cash can be a powerful intervention in refugee, postcatastrophe, and now Covid-19 settings in the United States.²⁸ It turns out that if you give desperate people cash, thus empowered, they spend it in ways that best match their needs.

If cash still isn’t your thing, check out J-PAL’s website or GiveWell.org, which identify evidence-based interventions and organizations in health care, education, entrepreneurship, and other areas. One could spend billions of dollars well just following what you will learn there.

Instead of funding evidence-based inventions that meet large human needs today, many BillPhils seem to subscribe to the long and still widely claimed canard that the role of philanthropy is to be “risk capital,” to be “catalytic, transformative, innovative.” Who said this is a first principle of philanthropy? Perhaps it made more sense in decades past, before the evidence-based movement identified so many ways for philanthropists to have much more immediate impact. Even Kevin Starr, the enlightened founder and leader of the Mulago Foundation, argues that since “philanthropy should be catalytic,”²⁹ making cash distributions, particularly regular payments made as universal basic income, is solely government’s role. That is hard to argue in the abstract, but what if our poor’s need is immediate and is ignored by their government? But we still live in an era dominated by President Ronald Reagan’s lasting cynicism: “Government is not a solution to our problem; government is the problem.”³⁰

With a potential $4 trillion available from the BillPhils, should we ignore the needs of today’s hungry, poor, badly educated, and underskilled because our role as BillPhils is only to be catalytic and risk-taking?

And what is the evidence (ironically) that philanthropists and foundations are good at taking risks, leading social change, or intrinsically innovative? Well, there’s a bit but not much. Start by reading my always-optimistic mentor and friend Joel Fleishman’s fine book The Foundation: A Great American Secret; How Private Wealth Is Changing the World.³¹ He cites twelve case examples of foundation-sponsored social change, including the Rockefeller Foundation and the Green Revolution; the Carnegie Corporation of New York and Children’s Television Workshop; and the Robert Wood Johnson Foundation and tobacco use. Let’s not even debate whether these foundations’ role was causal or essential.

One might say, “Well, it’s venture philanthropy. We need to make lots of bets for one big success.” Unfortunately, foundations aren’t transparent in a way that allows anyone to validate, or even debate, such an analogy. And, many BillPhils assert that their success in technology or finance positions them for being large-scale social change agents, a proposition that is hardly self-evident to any, perhaps, but themselves and the nonprofit receiving the check.

Reich, in Just Giving, sees a risk when large-scale social change is initiated by plutocrats instead of via our democratic processes. One frightening example was the eugenics movement, quietly acknowledged as American philanthropy’s “original sin,” spawned and funded by the philanthropies of Will Keith Kellogg, Rockefeller, Carnegie, and Sage in the early twentieth century.³² Of course, our generations aren’t capable of making such a mistake. But who is in charge of ensuring that AI, “the singularity,” will be human-centered, in the words of Fei-Fei Li, Stanford’s leading AI scientist?³³

BillPhils must earn the right, beyond sheer wealth and business success, if they seek to be “catalytic, innovative, transformative.” Meanwhile, give gobs of your dough to organizations already meeting the needs of today’s people, supported by evidence available now on the internet.

Principle Shift Number Three: From Slow, Bureaucratic, Conventional Organizational Models to the “Team of Teams” Model Used Broadly and Successfully by Most Knowledge-Based Organizations

The organizational model still deployed by most private foundations remains archaic and often dysfunctional. The “program officer” model centers decision-making in an individual leading a small group, generally organized by program area (e.g., social justice, higher education, health care).³⁴ Decision processes take months compared to, say, the few weeks that a private equity firm would take for its well-honed due diligence process to lead to a decision to invest billions of dollars. Foundations make an inordinate number of grants, usually hundreds, even a few thousand, which are often so small as to have little chance of making a difference or even justify the cost of the grant-making decision. These are predominantly single-year grants, generally funding a program, not an organization (a leading source of mission creep), and still often making institutional politics more important than evidence. And, if a potential grantee actually thinks the “program officer” is the decision maker, they will be disappointed as they wait and wait for a final decision that must first go up some opaque line of organizational reporting. The proposal may then languish at the board, where perhaps the grandchild of the late founder is discovered to be strongly biased for or against the grant. So many smart, well-intentioned people are trapped in a slow-moving bureaucracy.

After forty years as a student of and adviser to business, nonprofit, and philanthropic organizations, here’s my summary for practitioners. Since the post–World War II era if not before, organizational structures have been functional: finance, sales and marketing, operations. Even the large, complex, multifocused organizations that arose in the 1960s and 1970s were organized into “business units,” essentially several functional organizations in one company, perhaps with some shared services. Most traditional foundations are functional, with the “program officer” leading “operations.” Despite most larger foundations having more program areas than any strategic focus could justify, they often are organized into several “business units.”

Most of us in organizations now spend virtually all our time working in teams. This is particularly the case in knowledge-based organizations such as management consulting, private equity, technology, health care, and even universities, where leading researchers create interdisciplinary teams to cut across traditional academic disciplines. Let’s call this the “third era of organizations.”

The “third era of organizations” emerged well before it gained a name, “team of teams,” supported now by so many technologies, globally responsive 24-7, accessing the best knowledge quickly, inviting multiple perspectives, and facilitating evidence-gathering and decision-making processes simply impossible until the twenty-first century.³⁵

Bill Drayton, a friend since 1974, is widely credited with the founding of Ashoka in 1980 and with launching the idea and the practice of “social entrepreneurship.” In 2013, he restructured Ashoka globally as a “team of teams.” Instead of maintaining a traditional structure in which people work in hierarchies based on a function or a formal business unit, under Drayton’s approach an organization operates as a constellation of teams that come together around specific goals.

Drayton says, “At the center of this constellation is a coordinating executive team, but the composition of each project team shifts as needed over time. Teams and team members work together in fluid, constantly changing ways.”³⁶ The model emphasizes decentralized autonomy, meritocracy, and a sense of partnership.

Other leaders later promoted a similar approach. In 2015, retired US Army general Stanley McChrystal and his colleagues published Teams of Teams: New Rules of Engagement for a Complex World.³⁷ This work, which chronicles McChrystal’s effort to reorganize the fight against Al Qaeda in Iraq, shows that a decentralized model can be effective even in a traditionally hierarchical institution like the US military.

It’s time to launch “team of teams” as the organizational norm for foundations. Please don’t argue; your most effective leaders operate this way already, if not by name. If you don’t know how, ask that management consulting firm you work with, often to conduct a due diligence of a possible grant or a program area strategy. They will deploy a “team of teams,” drawing on different types of resources tailored to the problem you have asked them to solve. Or ask that private equity firm with which you are considering an “impact investment.” Their due diligence team will assess the several-billion-dollar financial investment in six to eight weeks, and their “social impact” team will conduct an evaluation similar to that of your siloed program team, also in less than two months.

While collaboration occurs among foundations and philanthropists, it’s still not the sectorwide norm it should be. There are encouraging examples—after all, once you have a strong, evidence-based case for a specific intervention or nonprofit, why not broaden the sources of funding?

One prominent example is Blue Meridian Partners (BMP), spawned by the Edna McConnell Clark Foundation and led by its former CEO, Nancy Roob. It focuses on youth development and alleviating family poverty and makes “big bets” with long-term (five to ten years) unrestricted funding tied to meeting impact goals.³⁸ Bridgespan is their partner in evidence-based due diligence. As of late 2020, BMP had pooled more than $2 billion across five portfolios and engaged eighteen other funders as partners in collaborative approaches to these issues.

Another example is The Audacious Project, associated with TED Conferences (Technology, Entertainment, Design), which publicizes evidence-based projects also vetted by Bridgespan and invites donors to fund them. They have raised $750 million as of late 2020. Their partners include many newer philanthropists, including Steve Ballmer, Ray Dalio, John and Laura Arnold, the ELMA Foundation, and MacKenzie Scott.³⁹

Others will follow. The “team of teams” organizational approach is designed to collaborate, inside and outside.

Principle Shift Number Four: From Embracing the Ego-Distorting Effect of Philanthropy to Instilling the Values and Mindset of “Servant Philanthropy”

After her windfall $38 billion settlement when she divorced her longtime husband, Jeff Bezos, in July 2020, MacKenzie Scott made gifts to 116 highly diverse nonprofit organizations totaling $1.7 billion. She wrote, “Last year I pledged to give the majority of my wealth back to the society that helped generate it, to do it thoughtfully, to get started soon, and to keep at it until the safe is empty.… There’s no question in my mind that anyone’s personal wealth is the product of a collective effort, and of social structures which present opportunities to some people, and obstacles to countless others.”⁴⁰

Later, in mid-December 2020, the New York Times reported that “she had given nearly $4.2 billion to 384 organizations in just the last four months. Many of the groups are focused on basic needs, including food banks and Meals on Wheels, in a trying year for millions of people.”⁴¹ Scott demonstrates that one BillPhil can break long-held philanthropic paradigms to achieve impact: donating nearly $6 billion in 2020 (comparable only to the much larger Gates Foundation); being well evaluated (due diligence by Bridgespan, no doubt in a team-of-teams organization); funding dozens of those conventional, essential community charities, such as food banks, YMCAs, and other organizations that are, like much of the nonprofit sector, under siege. In mid-2021, Scott announced another $2.74 billion in gifts via a blog post on Medium.

Self-aware foundation leaders and philanthropists observe, usually in private, how difficult a struggle it is to maintain a sense of humility as potential grantees, their friends, and supporters offer flattery for their brilliance and beauty in every interaction. Witness what in the 1980s Tom Wolfe labeled “plutography”⁴²—the enjoyment the wealthy find in seeing well-posed pictures of each other in beautiful settings—finds its apotheosis in recent times in an annual issue of Vanity Fair on philanthropy and in the Forbes 400, where a single billion dollars in personal wealth will leave you below the bottom of the list. Is it any wonder that for BillPhils humility is not yet in danger of replacing hubris as their core philanthropic value?

But Scott is describing what philanthropy should be: an opportunity, often unearned, to serve others. It mirrors the philosophy of “servant leadership,” first described by Robert Greenleaf in his 1970 essay “The Leader as Servant” and then published in book form:⁴³

The servant-leader is servant first, it begins with a natural feeling that one wants to serve, to serve first, as opposed to, wanting power, influence, fame, or wealth.⁴⁴

Don’t assume, because you are intelligent, able, and well-motivated, that you are open to communication, that you know how to listen.⁴⁵

Care is taken by the servant-first [leader] to make sure that other people’s highest priority needs are being served.⁴⁶

Principles of servant-leadership: Listening. Empathy. Healing. Awareness.⁴⁷

Of today’s young BillPhils, Cari Tuna and her husband, Dustin Moskovitz (number three at Facebook, now founder and CEO of Asana.com), best combine servant leadership, evidence-based philanthropy, team-of-teams-based organization, and a commitment to “giving while living.” The details of their inspiring story are well worth reading, starting with Giving in the Light of Reason, by Marc Gunther,⁴⁸ but even the gist is compelling.

The youngest people to sign the Giving Pledge, in 2010, their net worth, still increasing as Moskovitz’s latest company, Asana.com, went public in 2020, is over $10 billion. Tuna’s first action after starting their initial philanthropy, Good Ventures, was to partner with and give her first grant to GiveWell.org, founded by two former Bridgewater associates, Holden Karnofsky and Elie Hassenfeld, and focused on identifying the organizations with evidenced-based programs as the most cost-effective interventions against extreme poverty. After working more closely, Karnofsky and Alexander Berger (co-CEOs as of 2021) founded the Open Philanthropy Project (OPP), Tuna and Moskovitz’s overarching organization for social investment, one of their seven entities, including their private foundation, Good Ventures.

In 2015, based on GiveWell.org’s evaluation as one of its top-rated charities, Good Ventures made a pathbreaking initial $25 million gift to GiveDirectly.org, helping to put that organization and cash on the map as the benchmark intervention for extreme poverty. The Open Philanthropy Project’s leaders are disciples of “effective altruism,” espoused by Princeton philosopher Peter Singer,⁴⁹ among others, which advocates using evidence to identify the most effective ways to help those most in need. Recently, OPP and others in the effective altruism movement have been expanding their interests to include the potentially damaging effects of AI on humanity.

“Give while living,” “team-of-teams organization,” “evidence-based decision-making,” and “servant philanthropy”—four new principles for all enlightened billionaire philanthropies. Let the debate gain energy, momentum, and be at the center of philanthropy.

FOR FURTHER READING

For a deeper dive into the ideas explored in this chapter, I recommend four books. The Billionaire Who Wasn’t: How Chuck Feeney Secretly Made and Gave Away a Fortune, by Conor O’Clery, describes the iconic philanthropist known for “giving while living.” The Foundation: The Great American Secret, by Joel L. Fleishman, goes through specific case examples such as the Green Revolution and Rockefeller Foundation to demonstrate that the private foundations can lead social change. In Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, Nobel Prize–winning MIT economists Abhijit V. Banerjee and Esther Duflo describe the compelling evidence for which interventions do—and don’t—alleviate extreme poverty. Finally, I recommend Doing Good Better: How Effective Altruism Can Help You Make a Difference, by William MacAskill. Whatever one’s personal values, all philanthropists of our time should understand the effective altruism movement, which argues that we should apply an evidence-based and rational approach to understanding how to benefit others the most.

Notes

I thank Melissa S. Brown of Vancouver, Washington, who was with the IU Lilly Family School of Philanthropy for nearly twenty years and is now an independent research colleague. I would also like to acknowledge my long collaboration with Kim Starkey, who has deeply influenced my thinking about the social sector, most prominently in our coauthored book Engine of Impact: Essentials of Strategic Leadership in the Nonprofit Sector (Stanford, CA: Stanford Business Books, 2017).

1. 1. The Giving Pledge, “About the Pledge,” https://givingpledge.org/About.aspx.

2. 2. Forbes, “The Forbes 400,” September 2020, https://www.forbes.com/forbes-400/.

3. 3. Many of the over two hundred Giving Pledgers didn’t make the Forbes 400 cut, either because their wealth fell below the cutoff or for some other reason related to how Forbes composes the list. In addition, there are billionaires who are on neither the Forbes list nor the Giving Pledge list, such as members of the family that owns Fidelity Investments, the family that founded Cargill, Inc., founders of SC Johnson, and others. See, for example, Tom Metcalf, “These Are the World’s Richest Families,” Bloomberg, August 2020, https://www.bloomberg.com/features/richest-families-in-the-world/?sref=o0pP9h0D. See also Kerry A. Dolan, ed., with Chase Peterson-Withorn and Jennifer Wang, “Billon-Dollar Dynasties: These Are the Richest Families in America,” Forbes, December 17, 2020, https://www.forbes.com/sites/kerryadolan/2020/12/17/billion-dollar-dynasties-these-are-the-richest-families-in-america/?sh=3e62d46772c7.

4. 4. Count as of November 2020 based on US residents named at The Giving Pledge, https://givingpledge.org/.

5. 5. Susan Wolf Ditkoff, Alison Powell, and Kyle Gardner, with Tom Tierney, Four Pathways to Greater Giving: What Will It Take to Unlock Dramatically More Philanthropy from America’s Wealthiest Families?, Bridgespan Group, November 23, 2018, 3, https://www.bridgespan.org/insights/library/philanthropy/four-pathways-unlock-greater-philanthropic-giving.

6. 6. C. Eugene Steuerle, Jenny Bourne, Joycelyn Ovalle, Brian Raub, Joseph Newcomb, and Ellen Steele, Patterns of Giving by the Wealthy (Washington, DC: Urban Institute, 2018), 16, https://www.urban.org/sites/default/files/publication/99018/patterns_of_giving_by_the_wealthy_2.pdf.

7. 7. Marc Gunther and Drew Lindsay, “Has the Giving Pledge Changed Giving?,” Chronicle of Philanthropy, June 4, 2019, https://www.philanthropy.com/article/has-the-giving-pledge-changed-giving/.

8. 8. Chuck Collins, Helen Flannery, Omar Ocampo, and Kalena Thomhave, The Giving Pledge at 10: A Case Study in Top Heavy Philanthropy, Institute for Policy Studies, August 2020, https://inequality.org/wp-content/uploads/2020/08/GivingPledge-Brief-Aug3.pdf/.

9. 9. National Philanthropic Trust, “What Is a Donor-Advised Fund?,” https://www.nptrust.org/what-is-a-donor-advised-fund/.

10. 10. Forbes staff, “Enhanced Forbes 400 Philanthropy Score,” Forbes, September 9, 2020, https://www.forbes.com/sites/forbespr/2020/09/09/enhanced-forbes-400-philanthropy-score-produced-with-support-from-global-citizen-measures-billionaire-money-donated-directly-to-charitable-organizations/?sh=5ffdb7433f93.

11. 11. Ford Foundation, “Darren Walker, President,” https://www.fordfoundation.org/about/people/darren-walker/.

12. 12. Rob Fischer quoted on the web page for “Master of Nonprofit Organizations,” Case Western Reserve University, https://case.edu/socialwork/academics/master-nonprofit-organizations.

13. 13. Emmanuel Saez and Gabriel Zucman, “Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Data,” working paper 20625, National Bureau of Economic Research, Cambridge, MA, October 2014, http://www.nber.org.papers/w/20625.

14. 14. CIA, “Ethnic Groups, China, Han Chinese 91.6%,” The World Factbook, https://www.cia.gov/the-world-factbook/countries/china/.

15. 15. Anand Giridharadas, Winners Take All: The Elite Charade of Changing the World (New York: Vintage, 2019).

16. 16. Rob Reich, Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do Better (Princeton, NJ: Princeton University Press, 2018).

17. 17. David Gelles, “Laurene Powell Jobs Is Putting Her Own Dent in the Universe,” New York Times, February 27, 2020, https://www.nytimes.com/2020/02/27/business/laurene-powell-jobs-corner-office.html/.

18. 18. Gates Foundation, “Who We Are: Foundation Trust,” https://www.gatesfoundation.org/Who-We-Are/General-Information/Financials/Foundation-Trust.

19. 19. National Trust for Historic Preservation, “Rosenwald Schools,” https://savingplaces.org/places/rosenwald-schools/.

20. 20. Karen Arensen, “Q&A: A Modest Proposal,” New York Times, August 2, 1998, https://www.nytimes.com/1998/08/02/education/q-a-modest-proposal.html.

21. 21. Steve Bertoni, “Chuck Feeney: The Billionaire Who Is Trying to Go Broke,” Forbes, September 18, 2012, https://www.forbes.com/sites/stevenbertoni/2012/09/18/chuck-feeney-the-billionaire-who-is-trying-to-go-broke/?sh=6471be43291c.

22. 22. Steve Denning, “Forbes 400 Summit on Philanthropy Remarks for Lifetime Achievement Award,” June 17, 2014. Shared with the author in a personal communication.

23. 23. Ibid.

24. 24. Steve Bertoni, “The Billionaire Who Wanted to Die Broke … Is Now Officially Broke,” Forbes, September 15, 2020, https://www.forbes.com/sites/stevenbertoni/2020/09/15/exclusive-the-billionaire-who-wanted-to-die-brokeis-now-officially-broke/?sh=8f60b253a2aa.

25. 25. Gelles, “Laurene Powell Jobs Is Putting Her Own Dent in the Universe.”

26. 26. Royal Swedish Academy of Sciences, “The Prize in Economic Sciences 2019,” press release, https://www.nobelprize.org/prizes/economic-sciences/2019/press-release/.

27. 27. GiveDirectly.org, “Experimental Evaluations,” https://www.givedirectly.org/research-at-give-directly/.

28. 28. GiveDirectly.org, “Project 100+,” https://www.givedirectly.org/covid-19/us/.

29. 29. Kevin Starr (@MulagoStarr), “Trying to go big on cash with philanthropy is a dead end. Philanthropy should be catalytic; governments should do UBIs. Mulago would be happy to point your uncertain Pledgers in useful directions :).” Twitter, October 8, 2020, 6:25 a.m., https://twitter.com/mulagostarr/status/1314557694875897856.

30. 30. Ronald Reagan, Inaugural Address, January 20, 1981, https://www.reaganfoundation.org/media/128614/inaguration.pdf.

31. 31. Joel L. Fleishman, The Foundation: A Great American Secret; How Private Wealth Is Changing the World (New York: Public Affairs, 2009).

32. 32. Edwin Black, War against the Weak: Eugenics and America’s Campaign to Create a Master Race (Washington, DC: Dialog Press, 2012).

33. 33. Wu Tsai Neurosciences Institute, “Human-Centered AI: A Case for Cognitively Inspired Machine Intelligence,” Stanford University, https://neuroscience.stanford.edu/events/title-tbd-fei-fei-li.

34. 34. Joel J. Orosz, The Insider’s Guide to Grantmaking: How Foundations Find, Fund, and Manage Effective Programs (San Francisco: Jossey-Bass, 2000).

35. 35. William F. Meehan III and Kim Starkey, “Team of Teams: An Emerging Organizational Model,” Forbes, May 30, 2018, https://www.forbes.com/sites/meehanjonker/2018/05/30/team-of-teams-an-emerging-organizational-model/?sh=46e1e78e6e79.

36. 36. Ibid.

37. 37. Stanley McChrystal, with Tantum Collins, David Silverman, and Chris Fussell, Team of Teams: New Rules of Engagement for a Complex World (New York: Penguin, 2015).

38. 38. Blue Meridian Partners, “Our Partners,” https://www.bluemeridian.org/our-partners/.

39. 39. The Audacious Project, “About,” https://audaciousproject.org/.

40. 40. MacKenzie Scott, “116 Organizations Driving Social Change,” Medium, July 28, 2020, https://mackenzie-scott.medium.com/116-organizations-driving-change-67354c6d733d.

41. 41. Nicholas Koulish, “Giving Billions Fast, Mackenzie Scott Upends Philanthropy,” New York Times, December 20, 2020, https://www.nytimes.com/2020/12/20/business/mackenzie-scott-philanthropy.html.

42. 42. See https://www.lexico.com/en/definition/plutography.

43. 43. Robert K. Greenleaf, Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness (Mahwah, NJ: Paulist Press, 2002).

44. 44. Peter Senge in Greenleaf, Servant Leadership,” 352.

45. 45. Ibid., 314.

46. 46. Ibid., 27.

47. 47. Celeste DeChryver Mueller, “Servant Leadership: The Way Forward,” Health Progress 92, no. 5 (2011): 20–25 at 21, https://www.chausa.org/publications/health-progress/article/september-october-2011/servant-leadership-the-way-forward-.

48. 48. Mark Gunther, “Giving in the Light of Reason,” Stanford Social Innovation Review 16, no. 3 (Summer 2018), https://ssir.org/articles/entry/giving_in_the_light_of_reason#.

49. 49. Peter Singer, The Most Good You Can Do: How Effective Altruism Is Changing Ideas about Living Ethically (Melbourne, Australia: Text Publishing, 2015).