Giving with Impact:
Transcript of the podcast:
Michael Gordon Voss: Welcome to Giving with Impact, an original podcast series from Stanford Social Innovation Review developed with the support of Schwab Charitable. I'm your host, Michael Gordon Voss, publisher of SSIR. In this series, we hope to create a collaborative space for leading voices from across the philanthropic ecosystem to engage in both aspirational and practical conversations around relevant topics at the heart of achieving more effective philanthropy.
In recent years, the landscape of modern philanthropy, whether on an individual or corporate level, has changed dramatically. No longer just the domain of social enterprises, large for-profit corporations are embracing a shared value approach to their businesses, in addition to their existing corporate social responsibility efforts, while individual donors still responsible for the largest portion of total US philanthropic dollars, are becoming more sophisticated in their approach to philanthropy, focusing much more on valuation impact and outcomes than in the past. At the same time, a rising chorus is questioning the very nature of philanthropy in democratic society, very much in response to a perceived lack of success in creating real change in crucial issues, as well as a concern that our current approaches to philanthropy are perpetuating many of the inequities they're meant to address.
What is the role of philanthropy today? And what can we as a philanthropic community be doing better to support the nonprofits with whom we work? How is philanthropy and social innovation being redefined in an era of increasing socially responsible business? How can we engage more individuals in the process of effective giving, with an eye toward impact? And perhaps, most importantly, how do we do this with an equity lens that not only celebrates and respects diverse perspective, but empowers those closest to these issues in helping to co-create solutions?
As we explore these topics, we're very fortunate to be joined today by Jeff Raikes, cofounder of the Raikes Foundation, which works towards a just and inclusive society where all young people have the support they need to reach their full potential. Based in Seattle, the foundation focuses on youth-serving systems, seeking to make them work better on behalf of the most marginalized young people in our society. The foundation also supports initiatives aimed at increasing the effectiveness of philanthropic giving.
Jeff is the former CEO of the Bill and Melinda Gates foundation, where he led their efforts to promote equity for all people around the world. Prior to joining the foundation, Jeff was President of Microsoft Business Division and served as a member of the company's senior leadership team. Jeff is the chair of the Stanford University Board of Trustees, and serves on a variety of other corporate nonprofit boards. And in full disclosure, Jeff is part of the advisory board of the Stanford Center on Philanthropy and Civil Society and SSIR.
In addition to Jeff, we're also very fortunate to be joined by Fred Kaynor, Vice President of Business Development and Marketing at Schwab Charitable. Fred brings over 20 years of financial services experience to today's discussion. In addition to his role at Schwab Charitable, Fred has formerly held senior-level positions with MasterCard Worldwide and Visa.
Jeff, Fred, thank you both for joining me today, as we explore the evolving role and activities of philanthropy. Let's get started.
Jeff, I'm going to kick off with you. As I mentioned in my introduction, we seem on the one hand to be experiencing something of a boom in individual philanthropy, wealthy philanthropists making very public commitments to specific issues and the rise of big bet philanthropy, a growth in philanthropic vehicles available to support donors at all levels that include giving circles all the way to donor-advised funds, new online tools to make it easier for donors and philanthropists to identify and evaluate organizations. But we're also seeing some backlash against philanthropy with books like Anand Giridharadas's Winners Take All or our own Stanford colleague Rob Reich's book, Just Giving. What do you think is the source of these criticisms? And what are individuals doing well? Or perhaps more importantly, what could they be doing better?
Jeff Raikes: Well, first, let me say thank you very much, Michael and Fred, for allowing me to join you in this discussion. I appreciate your focus on individual donors, and what they're doing well and what they could do better. The reason is about 80% of all of the philanthropy in our country is directed by individuals. And so this is a very important segment for us to think about.
And in addressing your question, I might start out by providing a bit of a framework. I think that great philanthropy involves both the heart and the mind. First of all, when you think about what philanthropists are doing well today, in my opinion, I think they are drawn by the heart. They find a passion, they see a need in society that they can address. That, I believe, is fundamental to having good philanthropy. I think that individual donors tend to do well in supporting organizations with general operating funds, multi-year funding. They tend to be more connected to their communities. They tend to build relationships and civic leadership. So I think there's a lot of good things going on from the standpoint of individual donors.
Now, let me address some of the things that I think could be better. As I mentioned, the framework is the heart and the mind. And the research would show that while 85% of philanthropists would say they want to have great impact, only about 32% or doing any substantive research, and only about 9% are doing comparative benchmarking. So I think that is one signal as to what we need to do to improve in order to have greater impact.
You had mentioned the rise of big philanthropy and some of the critiques of big philanthropy, and I think there's some very constructive criticism that are coming from those voices. Let's take the Giving Pledge. That happens to be an example of really big philanthropy. One of the pillars of the Giving Pledge was for those very wealthy people to give big, to make a commitment greater than 50% of their wealth was to go back to society.
If you look at what's happened since many of the giving pledgers have signed on, they likely are accumulating more wealth, rather than getting half of it back into society. In fact, the research would show that they've probably given less than half of the appreciation of their wealth since they've made the commitment. So I think one of the things that I would like to see is for more of the wealth get back into society quicker. Think of it as a complement to give big, a pillar that you might describe as give now. And Tricia and I, cofounders of the Raikes Foundation, we're particularly big believers in giving while living. We think that more and more philanthropists should choose a non-perpetual structure. In our case, we've made a decision that we want to deploy our resources back into society by 2038, roughly 20 years from now. And part of what motivates us to do that is we think about net present value. What's the net present value to society of having these resources deployed now?
So let me add a couple of other pillars that I think should be there. We've talked about give big, we've talked about give now. I mentioned the research showing that we're not doing enough investigation in where our dollars can make a difference, and so I would say a third pillar is to give smart. And then a fourth pillar is to give to address inequity. You know, one of the things that we see in philanthropy is the really big gifts tend to go to big institutions. Those are viewed oftentimes by the philanthropists as the safe bet. And I would like to see more philanthropists think of their philanthropy as society's risk capital, where they can catalyze greater impact for society.
And this is not easy. One of the things that we've done at the Raikes Foundation is funded the creation of givingcompass.org. We did that with the support of Schwab Charitable and other partners. And what givingcompass.org does is it's a web platform to help philanthropists get connected with the resources that will help them achieve their aspirations for greater impact.
Michael: So let me... Fred, let me turn to you for a moment because Jeff just shared some important insights with regards to what donors could be doing, including the idea of giving smart and focusing on impact. How do these ideas align with what you're seeing among Schwab Charitable donors?
Fred Kaynor: Thank you, Michael. And it's also a pleasure to be here with you and Jeff. We are committed to providing resources of varying degrees to our individual donors in a way that enables them, empowers them to give with maximum impact. And what we define as maximum impact is twofold. It's maximum impact in terms of the resources that they donate and its maximum impact, ultimately, with the charities and the causes they choose to support. We are seeing donors today taking a much more deliberate, thoughtful, strategic approach to their philanthropy, much less of a transactional one, where they would simply identify a charity that they like and write a check and be done with it.
What we're doing is providing a tool in the donor-advised fund platform to enable them to give their most tax-advantaged assets in a very, very effective way that enables them to give with maximum impact on the causes and charities that they support overall. So, for example, if... rather than giving cash, many of our donors give highly-appreciated long-held assets such as stock or real estate or private business interests. And in giving it through a donor-advised fund like Schwab Charitable, they avoid capital gains because we liquidate those assets on their behalf, which means the corresponding amount that they would otherwise be subject to paying goes to the charities they choose to support. In addition, we provide access to a variety of different tools and resources to help them be more informed with respect to what to give, when to give, how to give, and the various charities and causes that deliver on their passions most effectively.
Michael: Jeff, I'm going to come back to you for a second, but I want to turn away from individuals, despite the fact that, yes, you're right, 80% of giving is still coming from individuals in the US. But I want to switch over to businesses for a second. How are businesses rising to the call from shareholders, employees, and consumers to integrate a socially conscious approach to their practices?
Jeff: Well, this is a very, very important question, because, you know, I'd emphasize that while 80% of philanthropy is by individual donors, the role of the public sector and the private sector is hugely important,
You asked the question what is the role of the business community or how it's evolving. And I addressed this in a recent column that I wrote for Forbes Magazine, where I talked about how our bootstraps narrative is tying us down. And the point that I was making is that the success of individuals, that notion that we bring ourselves up by the bootstraps, is a very important concept, but it has to be placed in the context of the systems and institutions around those individuals that support their healthy development and success.
One of the things that I've been very heartened by is the evolution of the thinking in the business community. And I think this is best represented by the Business Roundtable and their most recent announcement, their statement about the purpose for corporations. they came out and said that all stakeholders---customers, employees, suppliers, communities---and not just shareholders are essential to the success of companies and to the economy as a whole. I think we can kind of look back over the last 20 or 30 years and say that when we've seen just this sole focus on shareholder value that often came at the cost of long-term sustainable value.
I felt that this was best epitomized by one of my former Microsoft colleagues, Kevin Johnson, now the CEO of Starbucks, when he speaks about how the role of Starbucks has to be to have a purpose beyond profit. Purpose beyond profit. And I think that philanthropy and the business and public sectors can work together, so that, in combination, we can shift this mindset, and that this will be key to building a more fair and equitable society.
Michael: I think at SSIR we'd agree strongly with that. Because we always talk about the importance of a cross-sector approach, that it's everyone. It's nonprofits, foundations, but more and more, it's businesses, it's government, and what have you, social enterprises.
Fred, you have some unique perspective on this discussion. How does... how do Charles Schwab and Schwab Charitable embrace giving back?
Fred: It's a great question. Jeff's point is such a well-taken one with respect to how we capitalize and catalyze the energy around philanthropy in the private sector, and Charles Schwab is a perfect example of how we do so. Chuck Schwab, himself, established us in 1999. His passion has always been through the clients' eyes. So what is our obligation as an organization to help ensure that each and every thing that we do as a company aligns with priorities of our clients? Our clients have told us consistently, and for many years have told us that philanthropy is a priority. How do we help them achieve maximum impact in charity, in investments, in savings, in really everything that they do? So he established Schwab Charitable, this donor-advised fund platform, which enables them to give with the same level of efficiency as they can embrace their investments and savings. And that is a perfect example, frankly, of what we, Charles Schwab, have done to make it a priority to allow and enable our donors to achieve maximum impact.
As an organization, Schwab Charitable is entirely focused on increasing philanthropy in the United States. Every single thing that we do on behalf of our donors and the financial advisors that support them enables them to truly give with maximum impact, and achieve the maximum impact on the causes that they choose to support.
From an overall employee perspective, Charles Schwab is recognized among the most charitably-inclined companies within the investment sector. We have community ambassadors, teams of people in all of the markets in which we operate, that allocate certain funds to local nonprofit organizations and CBOs. We have a tremendous volunteer program that enables our employees to give back, not only financially but in terms of their volunteer time, as well. And we endorse and actually promote that significantly as an organization.
Michael: Well, we've focused for the past few minutes on a lot of the positives that we're seeing. Jeff, I'm going to come back to you and these critiques of modern philanthropy. You talked a little bit earlier about pace being one of the issues. But a lot of these critiques are suggesting that philanthropy needs to evolve in some way to better address the challenges we face today. What are some of the ways that you think philanthropy needs to evolve?
Jeff: Yeah, let me first say that I think what Schwab Charitable is doing, the platform that's been established, is a great example of what I mentioned earlier about how philanthropy can be connected to purpose within... within business.
In terms of philanthropic evolution, I think one of the most important things is for philanthropy to have more emphasis on advancing justice. And when I say justice, think of it as societal fairness. I mean, in American society we value things being fair. And when I think about how philanthropy can advance justice, I think of it as advancing societal fairness.
Let me mention another of my colleagues in this sector, Darren Walker, who is President of the Ford Foundation. Darren has recently come out with a book entitled The New Gospel of Wealth: Generosity to Justice. And what Darren did was he went back to the original Gospel of Wealth, which was written by Andrew Carnegie in 1899, it was an important step in philanthropy in our country, where it encouraged more wealthy people to be generous. But what Darren did is look at that historical document and do a very significant pivot to what I would describe as systems change. In other words, don't just fill in the gaps, but address the systems issues that creates the gaps.
For example, generous people fund more shelter beds, beds for homeless people or people who are in need. And shelter beds are important. They're valuable. They're good. But that is not enough. Justice, societal fairness, is really about changing the system that requires us to have thousands of shelter beds in the first place. In other words, it's about challenging bad or ineffective systems, and about working to change the attitudes and beliefs that perpetuate those ineffective systems.
Michael: So let's keep building upon that for a moment, Jeff. We've spoken a bit about justice, but I want to look at the other side of it, which is also equity that's part of the equation. So what does equity mean to you? And why do you feel it's crucial that philanthropy do more to address equity, as well as justice?
Jeff: Well, this is a very important question because people throw out these terms, but maybe not with a sense of shared understanding or definition. So let me try and weigh in on that and make a constructive contribution. You can think of equality as everyone having the same thing. Equity is about giving people what they need to be successful. And then justice or societal fairness is really about striving for equity. Striving for equity is justice in action.
So let me make this very personal. I'll... I'll...I'll take kids. You know, you... you know, as a parent, you want to treat all of your children equally. But they're different people. They have different needs. What Tricia and I discovered around 2000, right before we started the foundation, is that our oldest daughter in middle school was really experiencing a great deal of... of bullying. She was being bullied. And it was really taking a toll on her. Now, if we wanted to treat all of our three children equally, then she, our oldest daughter, may not have gotten the support that she needed from us in order to be able to weather those issues and then have the healthy development that has now led her to be a very healthy and successful person in society. And so there's an example of where at any given point in time, you have to understand what somebody may need to be successful and treat them in an equitable way, as opposed to just in an equal way. And if you expand that broadly across society, you begin to understand that the ideal of equality doesn't work very well.
And if you look at the statistics, you see that race and class are the most reliable indicators of outcomes in life, like academic achievement, income, wealth, life expectancy, physical and mental health, and maternal mortality. And so if you come to understand those systemic barriers that we have in society, you began to understand that treating everyone the same is not very successful.
So I think it's important to draw the distinction between equality and equity. It's hugely important. We need more systems that are more responsive to the people who are most marginalized. We have to collectively aspire to a society in our country where race and other... and... and expressions of othering are not predictors of these life outcomes. We want equity to be an animating force where all people have what they need to be successful, and that wealth and prosperity can be more equally shared.
So I think philanthropy plays a very important role in this whole dialogue and this initiative to build a more equitable society. We think that the future of philanthropy is tied to the ability to come together as a sector in combination with the business sector and government sector to tackle inequity from all sides, all angles.
Michael: Oh, I love how you framed the idea that striving for equity is justice in action, Jeff. And you've already given us some great advice and perspective as to what donors are doing well, what they could be doing better, and what you would like to see as the evolving role of philanthropy. As we start winding up our discussion today, any final advice for donors or recommendations?
Jeff: Well, I would simplify my advice or recommendations for donors into three relatively important concepts. The first one I talked about at the very beginning of our conversation. It's important to have your heart drawn to the issues that you care about because you're more likely, then, to have a sustained focus, and to really dig in and learn and understand how to make a difference. And you want to pair that with the mind. You want to have very thoughtful understanding of the landscape of which you want to work.
The second thing, and I think this one is really important and doesn't get enough attention, and that is humility. You know, many of us were very, very successful in business and so it's very easy for us to think that, “Oh, you know, we were successful in our life and our career, so we kind of know how to do things. And if people in philanthropy or the nonprofit sector would just do things the way we think, then things will be great.' You have to suspend that sense that you have the answers, and really work for proximity. And by proximity, I mean work with the people who are closest to the issue that you wish to address. Understand that their lived experience, which is very different from your own lived experience, is something that really needs to inform those solutions. And if you go at your philanthropy with that form of humility, you're much more likely to have great impact.
And then, the final thing I want to emphasize is that you can find joy. If you are supporting organizations and work that has positive impact, that is deeply gratifying.
So I would summarize my advice to donors as to dive in with your heart and your mind. Do it with humility, and find the joy in giving back and investing in building a better society for our country.
Michael: So, Fred, part of the goal of this series is to imagine the future. With Schwab Charitable celebrating its 20th anniversary, any thoughts on what that future is?
Fred: You know, building upon what Jeff just said, heart, mind, humility and joy. Those four words, bringing them to a new level of engagement, and finding ways to be truly as effective as possible with your philanthropic endeavors by using those as the foundation for everything that you do is really a source of inspiration to me. I have found... you pointed out that it's our 20th anniversary this year. I found an extraordinary level of growth and engagement among all of the donors that embrace Schwab Charitable as a solution for their philanthropic giving. They're so much more thoughtful, they're so much more joyful, they're so much more engaged that it inspires me on a daily basis. So I see the future as being extraordinarily bright. I see it as a future of individuals and families that are recognizing the impact that their philanthropy can have on the broader society.
I'm reminded of a quote from a well-known philanthropist, Eli Broad, which is, “Charity is not just about writing checks and not being engaged. Philanthropy, to me, is being engaged not only with your resources, but getting people and yourself really involved and doing things that haven't been done before. And that really sums it up beautifully. It's leveraging every single tool and asset and resource at your disposal to ensure that you have the maximum impact on society that you can possibly have.
Michael: Where you would like to see philanthropy in the next 10, 20 or 30 years?
Jeff: Well, I think Fred stated it very well. What I would do is hearken back to Darren Walker and the New Gospel of Wealth. I think we're in the midst of moving from a 20th century model of philanthropy to a 21st century model of philanthropy. So in the next 10, 20, 30 years, I'd like to see us really develop that model, a model that is focused in on systems change, not just filling in the gaps but addressing the systems issues that create those gaps in society. Thinking of philanthropy as being catalytic, as being social risk capital, where we can identify the approaches where if they can be proven to have efficacy for society they can be scaled up and sustained by the public sector and/or the private sector, where collectively, then, with catalytic philanthropy and systems change, we're then addressing the issues of justice, societal fairness. And I think if we see that kind of construct, that 21st century model for philanthropy, I think we'll see really meaningful progress.
Michael: What a perfect way for us to end today's discussion. We could keep going, but, unfortunately, we're out of time. Fred, Jeff, thank you, both, for joining me today.
Fred: Thank you very much, Michael. Thank you Jeff.
Jeff: Thank you.
Michael: Thank you for listening. We hope you've enjoyed this episode. Please consider leaving us a review on Apple Podcast or your favorite listening app, as it helps others discover the show. We encourage you to listen to other episodes in this series. This podcast series is made possible with the support of Schwab Charitable, who played an important role in the selection of topics and speakers. For important disclosures and a transcript of this episode, visit schwabcharitable.org/impactpodcast.
The landscape of modern philanthropy has changed dramatically in recent years, affecting the approach to charitable giving by corporations, foundations and individuals. In this episode, our guests discuss how shifts in charitable giving are re-defining America's approach to philanthropy and how individuals can increase the effectiveness with which they give.
Moderator: Michael Gordon Voss, publisher of Stanford Social Innovation Review
Jeff Raikes, Co-Founder of the Raikes Foundation
Fred Kaynor, Vice President, Marketing and Business Development, Schwab Charitable
After you listen
- Looking for impactful charities to support the causes that mean the most to you? Find helpful resources at schwabcharitable.org/explore_charities.
- If you would like to read or listen to stories from donors as they recount their approach to philanthropy and how they are maximizing the impact of their charitable giving, we have twenty to choose from at schwabcharitable.org/20stories.
- To learn more about how to fund your philanthropy with tax-smart contributions of complex assets, read our series of helpful white papers at schwabcharitable.org/noncash.
The interconnected concepts of equity and justice are taking center stage across the philanthropic landscape. Individual donors can engage in effective philanthropy with an equity lens that not only celebrates and respects diverse perspectives but empowers those closest to the issues in helping to co-create solutions.
You can find out more about advancing equity and justice in Jeff's recent article published in Forbes.
Check out Giving Compass, a project sponsored by Raikes Foundation as a central source for relevant articles.
Subscribe to Giving with Impact for free on Apple Podcasts or wherever you listen.
If you enjoy the show, please leave us a rating or review on Apple Podcasts.