As an expert in strategic philanthropy, Laura Arrillaga-Andreessen has helped to steer the charitable works of scores of millionaires and billionaires, including Facebook founder Mark Zuckerberg and his partner in giving, his wife Dr. Priscilla Chan; Salesforce cofounder Marc Benioff; Twitter cofounder Jack Dorsey; and Laurene Powell Jobs, who was married to the late Steve Jobs.
Arrillaga-Andreessen avoids telling people exactly where they should focus their charitable efforts; instead she teaches them how to figure that out for themselves, and then shows them how to give in the most effective manner possible — and not just by donating money. “My role,” she says, “is to empower people to make the best decisions they can.”
Arrillaga-Andreessen received an MBA in 1997 from Stanford Graduate School of Business, where she created and has taught a course on strategic philanthropy since 2000. She is also the author of the 2011 New York Times bestselling book Giving 2.0: Transform Your Giving and Our World.
She recently shared her philanthropic advice in a conversation with Insights by Stanford Business.
Let’s imagine that I’ve just come into a large sum of money and want to give some of it away — say, $10,000. It’s December 15, and I need to write some checks before the year ends. I come to you and say, “Laura, what should I do?”
First, let me say that you don’t need to have a particular amount of money to be a serious philanthropist. A philanthropist is anyone who gives anything from their portfolio of resources, be it financial capital, intellectual capital, network capital — whatever form those resources take. The best philanthropy happens when your individual beliefs, values, and passions are married to core public needs. It’s not about what you give; it’s about how you give.
Yet most of the people I know end up writing checks to the same organizations that they’ve always written checks to. Maybe it’s Habitat for Humanity or maybe it’s their local public radio station. Is that a mistake?
It’s every philanthropist’s responsibility to make sure that the investment they make to an organization, whatever form that takes, is actually creating measurable impact. Think of it as moving from transactional to transformational. Or, as I like to call it in my book, moving from Giving 1.0 to Giving 2.0. It’s about evolving your giving from being reactive to proactive, sympathetic to strategic, and isolated to collaborative.
Going back to my example, would you say that’s lazy?
It is not strategic nor is it likely designed for the highest possible impact. You should ask yourself instead, “What is the change I want to create with my gift, and how will I know that that change has been created?” Every decision that we make to invest in one nonprofit is a decision not to invest in countless others, and in philanthropy, accountability is self-imposed.
Compare it to the time we spend thinking about our personal financial portfolios. We invest enormous amounts of time and energy figuring out how to maximize our investment income, because profits are at stake. But with philanthropy, lives are at stake. We have a moral imperative to express our generosity in a way that matters more than just signing our name or clicking on “donate now.”
Forgive me for playing devil’s advocate, but — says who? Who says there’s a moral imperative?
There is a moral imperative. We see it in the news every day — the discrimination and social injustices that pervade society. How can we not seize the opportunity to express our generosity in a way that can actually touch and transform lives, communities, our country, and beyond?
Hard to argue with that.
So, imagine it’s December 15. There are hundreds of thousands of Americans sitting at their kitchen tables, presented with the scenario you just posed. The vast majority of them are making decisions based on limited exposure. It might be a brochure that came in the mail, or it might be an email they received, or it might be an organization that has touched them personally. They’re making decisions in isolation based on one perspective, one set of experiences, or one portfolio of knowledge.
Part of that is because philanthropists have historically not been good at sharing what they’ve learned. That’s one of the biggest failures of philanthropy — the incessant reinvention of the social-change wheel. That’s why part of what I teach is that as philanthropists we all need to share our knowledge. What did we learn from the success or the failure of a particular gift, and how can we share that in an expansive or viral fashion? That question is overlooked by the vast majority of social investors, and if we aren’t sharing that knowledge, philanthropy will never actualize its potential to change society.
You often distinguish between charity and philanthropy. Can you elaborate on that distinction?
Charity, as I see it, provides immediate relief from suffering. Charity would be providing meals for homeless people at a transitional housing facility or medical support for victims of a natural disaster. It’s a social palliative, dealing with the repercussions of a larger problem.
What would be the philanthropic counterpart?
Philanthropy is a proactive attempt to change systems and solve social problems by addressing their root causes. Philanthropy empowers individuals to become self-sufficient — it is a social corrective. So in the example I just provided, the social palliative is providing meals or temporary housing. But it’s just as important to provide job training and education so people can lift themselves up on a more permanent basis. The most strategic philanthropists recognize that we can’t ignore the immediate in service of the future —they practice both simultaneously.
In your book, you provide a lot of examples of philanthropists doing great work in the developing world, but overall your advice is fairly agnostic — you don’t show your political preferences. Which leads me to wonder, are you worried that someone might use your tools for causes that run counter to your own personal beliefs?
You’re correct. I am agnostic when it comes to issues. So my answer to your question is, Godspeed. My role is not to impose my beliefs on people — it’s to empower them to actualize their philanthropic potential in the most meaningful way.
I’ve worked with donors who are fervently pro-choice and donors who are fervently pro-life. I’ve worked with donors who are fervently in favor of gun control and donors who are fervently in favor of an individual’s right to carry firearms. It’s not my place to make judgments on other people’s values. My role is to help them amplify their philanthropy so it can be as deeply impactful as possible.
Do you think philanthropy is going to change, or needs to change, with Donald Trump as president?
Philanthropy will change with this administration, just as it changes with every administration. With every political shift, individuals are inherently activated to want to take social action that expresses their own beliefs, which often includes being philanthropic.
And that perhaps counterbalances the dominant political party.
One of the realities of philanthropy is that there will always be opposing forces or ideas that run counter to your own. Pluralism is part of what makes it beautiful. We all have the ability to express our values through how we invest our resources.
Have you ever tried to steer someone away from making a donation that you considered frivolous or ineffective?
My objective is to give people the intellectual resources they need to make meaningful, high-leverage giving decisions. So, if an individual wants to send money to an organization, and I happen to know of other organizations that are doing the same thing, I will encourage them to ask three basic questions. One, what specific change do you want to create and how will you measure if your generosity has translated into social good? Two, is this gift the best bang for your philanthropic buck? And three, what will you learn from the success or failure of this gift that you can share with others?
Was there a moment of epiphany for you when you realized that philanthropists weren’t adequately sharing information with each other about strategic giving?
It hit me when I was in business school at Stanford. I knew I wanted to be a social-change leader, but I had no idea how to go about doing that. I believe there were three classes offered here at the time, but they focused only on nonprofits, not philanthropy. There were no university classes at Stanford that prepared students to be philanthropists — personally or professionally.
So in my second year at the GSB, when all of my classmates were writing their business plans for internet companies, I was writing a business plan for a philanthropy-education organization. My goal was to create a community of like-minded individuals who wanted to become effective philanthropists by actually doing it. That plan became the Silicon Valley Social Venture Fund (SV2), which is now the second largest venture philanthropy partnership globally.
So from the beginning of your work in this field, someone’s net worth was not a central issue.
Net worth has nothing to do with being a philanthropist. The only thing you need to have to be a philanthropist is generosity. And the only thing you need to have to be a strategic philanthropist is a willingness to marry your heart with your mind, and to give a modicum of time in the service of other human beings.