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January 17, 2007


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Group Philanthropy...group anything never works! Evil will always come in a group setting....especially when involving fortune 500 monies. Surround yourself with the very few people you will come to trust and make your gifts work or do it on your own...that's a guaranteed distribution of your good heart and gift wealth in any form.
You are the one who answers to God and yourself...no one else.


Right, but the question is whether it is evil to own evil companies in a portfolio, like that of the Gates Foundation. And, then the question is who rates the evilness, and whether such ratings can be objective, or whether they are inherently political, in the sense of reflecting the religious and moral views of a particular group. Also, even if "values" were absolute and shared across the globe, it is hard to measure the good or evil a company does since consequences flow in all directions, and ramify in ways that are hard to assess, likewise motives are always mixed. I am just trying to get people to discuss these issues, and confront the conceptual tangles.

Sean Stannard-Stockton

Values certainly are not universal. How boring would that be?! Owning a company that you personally despise makes no sense unless you use the rights of ownership to attempt to change the way the company conducts itself. But companies are no more "evil" than people are. They are, after all, nothing more than groups of people.

What the Gates Foundation said was that trying to analyze each company from a social impact standpoint was not their expertise. They don't have to try and take on each and every issue they face. Martin Luther King was not an active advocate for saving the environment, but he shouldn't be criticized for that. Even the best among us can not take on each and every issue.

However, I think that foundations that want to invest with a "social screen" should be encouraged to do so. Consciously choosing to not screen your investment portfolio is fine, simply ignoring your options is not.


Is that first link supposed to go to a post on his blog?


It's pretty lame to say that it isn't their specialty. They have enough bucks to hire whatever specialists or consultants are necessary, if it were important to them. As Lucy points out, they already spend a lot on the investmant managers, it's just a matter of what you make a priority. Obviously their only priority is making money. There isn't much giving or social responsibility in that no matter how many millions you put into your pet projects to save the unwashed millions.

Sean Stannard-Stockton

"Their only priority is making money"... All of which they give to nonprofits. Sucking the profits out of their investment holdings and redirecting it to nonprofit entities does make rational sense. I'm not saying that they should not engage in SRI, but it is a rational decision on their part (not rational as it I agree, rational as in their argument makes logical sense).

I think suggesting that the Gates (and Buffett) are not "really" giving is not a defendable statement. They have foregone the opportunity to use a huge amount of money for their personal life and instead dedicated to giving it away to nonprofits. You may not agree with the procedures they are using, but they are absolutely "giving". If making money was their priority, it would not be logical for them to have put so much of their wealth into a foundation.

Phil has pointed out that donors get something back from giving (prestige, political connections, etc), but The Gates and Buffett have put far more of their wealth into the foundation than would have made sense if they were striving for personal benefit.

Lucy Bernholz

OK guys, I'll be back with comments (I have a day job, as I know you do too).

In the meantime, vote your opinion on this issue at the poll at www.philanthropy.blogspot.com. And then pass the poll onto others and let's get this conversation out there.


What a silly word EVIL has become. The absurdity of a nation fighting wars against EVIL is being followed by the nonprofit sector fighting a similar vague battle of 'morals'.
I am a stranger to you all, a simple person who knows little about the sector. However, it seems to me that educating donors- empowering them to make informed decisions couldn't be a bad place to start. You are all touching on that with these blogs. As a librarian I would encourage everyone to consider using the local library as a space to engage and educate the public in matters of philanthropy. The media is one fine way to increase knowledge (see Craver & Belford's blog today) but do not forget your educational opportunities like schools, libraries and community centers.


Oh for cripes sake!

Thats why you have to do it on your own.

Secret Santa died a few days ago, I just found out.

Follow him


What makes sense to me is Program Related Investments - the foundation lends money or invests seed capital in a forprofit venture that serves to advance the foundation's mission. Such venture capital could create an explosion of new social ventures, everything from companies to develop pharmaceuticals to new media companies to social software development. The foundation could serve (and can serve legally)as banker and venture capitalist to startups that advance the causes the foundation supports. How exciting it would be to see such investments become the norm rather than the exception for large foundations.


I admit I ha$ve a demanding standard for a gift. If 20,000,000 is invested, yielding average 10% return and 5% is distributed to the foundations social purpose (and 1% or $200,000 to overhead for the financial managers), then what are the most significant impacts of the foundations activities? The 1,000,000 (5%) is significant to the grant recipients, but the 20,000,000 investment may have more impact, positive or negative, on the lives of the very people the purpose driven spending.

In my view, the damage to the commons by intellectual property law as best exploited by the likes of Microsoft, the content empires and the drug companies is far more significant than the Gates foundations spending often for artificially expensive drugs (supporting the price) in addressing health crisis in the third world. Gates himself admits that if IP law were what it is today, Microsoft could never have gotten started.

And that is just one dimension of value. Yes it is up to each of us to act out these values. It doesn't matter how big a foundation's endowment is, if the values enacted throughout the organization, from the investment to the program wings have to pull in a positive direction. I'm encouraged by the impulse to give, but not yet by the demonstrated purposes of the Gates Foundation. Time will tell, and I certainly have no influence over what they do.

I think suggesting that the Gates (and Buffett) are not "really" giving is not a defendable statement.

Without presenting the full defense, I have demonstrated that there is one. I don't want to derail Phil's forum with polemics of IP law and the commons, but it is a very important value for me, and so I weight it very highly in making an evaluation. You are not required to do the same, but only respect my right to decide differently.

I claim that it is at best random and likely biased towards negative outcomes when the Foundation's social purpose does not pervade the entire organization. A more aggressive foundation might even spend down the endowment to make community investments. To invest in projects that increase the commons space that is available to the entire community without financial restriction. Once community assets are in place, the operations can be turned over to the community and other funding sources that are derived from the increased productive activity generated around the new assets. Investing in this context means building common assets and turning the assets over to the community.

The idea is that the foundation trusts the community to respect the gift and give back to maintain it. Why won't foundations let the funds go this way? I suggests it relates to the 1%, the salaries and benefits earned for assets under management. If you spent the money building something, you spend yourself out of a job. Of course that is short sighted thinking, since the assets need to be managed just as much in the commons as before. Maybe their wouldn't be as many six and seven digit salaries, but the work would be more hands on, directly caring for the real asset whether it is a community wireless network or community software and systems and economic development programs built on these free and open platforms.

how to get six pack

OK, nice question but before answering that, can you separate the "Good" and "bad" in what a corporation do? In many cases, one action can be good at this point and bad at another.

Phil Cubeta

Yes, you look at profit and stock value, minus the present value of pending legal liabilities, that is how you get an accurate number. You manage to that. If people or planet gets hurt in the process that is a necessary through regrettable evil.By talking a good game about a triple bottom line you can increase stock value and limit class actions and government regulatory intervention, and you can boost sales, and you can hire more idealistic new employees at lower wages. Any further questions?

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