The Game of Philanthropy (PDF)

“The Game of Philanthropy”

Jeff Lawrence

game n. 1. an activity providing entertainment or amusement; a pastime: 2. a competitive activity or sport in which players contend with each other according to a set of rules.

philanthropy n. 1. the effort or inclination to increase the well-being of humankind, as by charitable aid or donations.

Tag, Jump Rope, Dodgeball, Kickball, Tetherball, Foursquare, Hopscotch, Marbles, Red Light Green Light, Hide and Seek, Duck Duck Goose, Pickle, Horse, Capture the Flag, Candyland, Barrel of Monkeys, Chutes and Ladders, Operation, Connect Four, Spin the Clue, Scrabble, Mousetrap, Aggravation, Boggle, Battleship, Twister, Bop It,Bottle, Hot Football, Volleyball,Charades, Baseball, Parcheesi, Softball, Monopoly, Hockey, Chess, Basketball, Checkers, Soccer, Backgammon, Potato, Pin the Track and Field, Bowling, Golf, Tennis, Car Racing, Billiards, Lacross, Go, Life,Tail on the Donkey, Pong, Tank, Death Race, Sea Wolf, Space Invaders,Cricket, Skiing, Stratego, Musical Asteroids, Galaxian, Lunar Lander, Asteroids, Battlezone,Swimming Risk, and Yahtzee, Chairs, Red Bezerk, Centipede,diving, SnowPuzzles,- Trivial Gran Turismo 4, Dragon Ball Z Budokai 3, Final Rover, Mother Tag, Jump rope, Dodgeball, Kickball, Tetherball, Foursquare, Hopscotch,boarding, Pursuit, Fantasy XII, Doom 3, MarioMarbles, Kart, Red light greenFinal light, FantasyHide and seek, DuckVII: Defender,duck goose, Pickle, Horse, Capture the flag, Spin the bottle, Hot potato, Pin the tail on the donkey, Musical Dominoes,May I, Simon Says, Red rover, Mother may I, Simon says, King of the hill, Marco polo Badminton, Advent Children, Animal chairs,Crossing, Red rover, Mother Age may of I,Missile Simon Empires says, KingCommand, of the hill, Marco polo Sorry, Twister,Heads Up III, Super Mario 64, World of Warcraft, Star FoxPac Boxing,-Man, Cycling, Taboo, Simon,Seven Up Assault, Star Wars Republic Commando, Yoshi RallyFencing, X, Field Risk, Pictionary,King of the Hill, Touch & Go, Donkey Kong Jungle Beat, The Sims 2,Tempest, Hockey, Martial Mr. PotatoMarco Polo, NBA Street V3, Paper Mario: The Thousand-Donkey Year Kong,Arts, Rowing, Head, Topple,Sardines, Door, The Legend of Zelda, SOCOM 3: U.S. Navy Frogger,Surfing, Polo, Uno, Fish, Limbo, Seals, MVP Baseball 2005, Resident Evil 4, GrandMousetrap, Paintball, War, Hearts,Freeze Tag, Theft Auto, Area 51,Dig Dug,Water Polo, Old Maid, Poker, Shark Madden NFL 2006, Jak 3, WWE SmackDown!Pole vs. Position, Ice Skating, Blackjack, Ghost in RAW, Ratchet and Clank: Up Q*Bert,Gymnastics, Solitaire,The Dark,

Game board End of game

 Fill needs  Fix problems  Change views, values or beliefs

Rules, Constraints, Boundaries

 Non persistent  Context sensitive

Game pieces Strategy People  Competitive and/or cooperative i Data, information, Playing time knowledge, experience  Indeterminate Technology  Intra generational or inter Capital generational

Source: Guidestar , Foundation Center

Individuals

Advisors

Legal

Community Public Private Corporations Government Foundation Foundation Foundation Accounting

Financial

Insurance

Non-profit Program

Development

Information Technology

Customer Other

Society Legislature Regulators

 There are a lot of broken things and a lot of people trying to fix them  The battles to fix the broken things are very asymmetric  Foundations, corporations and individuals cannot assume all of the responsibilities government is shedding  The non-profit world (grantors and grantees) is very fragmented  Non-profits have been wounded by scandals and are politically weak  People in the non-profit world are passionate, articulate and generally committed to doing good  Many non-profits (operating and non-operating) seem to be very personality driven and without clear succession plans  Understanding, measuring and comparing the effectiveness, success and return on investment of programs is quite often difficult  Funding and forums to pass on lessons learned seem to be scarce

Volunteer

(public schools)

Trustee

The Lawrence Foundation (private family foundation)

Chief Software and Co-founder, Founder, Recording Technology Unemployed systems President & President & engineer Officer for engineer CEO CEO Comm group

Butterfly Travel Amdahl, Trillium Intel Clivia Systems (spoken word Doelz Networks (communications (chips, software, (technology and systems) business recording) (communications software) Co-founder, consulting) President systems) Student BSEE Common Grant UCLA Application (grantmaking & grantseeking software)

Founder, Individual Individual Student, Individual Individual contributor, Advisor, Unemployed Contributor, Employee contributor contributor, Trustee Trustee Advisor, Manager, Shareholder Trustee, Leader, Director Officer, Director Shareholder

1975 1980 1988 2000 2002 2007 2008

altruism n. 1. unselfish concern for the welfare of others; selflessness.

The theory The reality  Evolutionary biology suggests  People will often act against people should only help genetic their own self interest relatives and not others  People will cooperate with others and punish those who don’t even when they have nothing to gain  People trust others when they should not  True altruism appears to be part Why? of human nature

 Ensures continuation of Why? common genetic material into the future  Anthropologists, biologists and scientists don’t know for sure

Gender Race Social Learned Age Cultural Education Economic Taught Occupation Economic

Individual

Reputation Values Anarchy Moral beliefs Dictatorship Ethical beliefs Christianity (33%) Oligarchy Islam (22%) Theocracy Hinduism (15%) Monarchy Non-religious (14%) Direct Democracy Religious Political Buddhism (6%) Indirect Democracy Chinese Traditional (4%) Plutocracy Primal Indigenous (3%) Aristocracy Other (3%) Meritocracy Stratocracy

 Attended church  Attend some church  Food to mission  Food to mission  Food to mission  Community service  Volunteered at public  Volunteer at public  Family foundation Time schools schools  Volunteered to coach  Letter writing and visits sports to elderly  Volunteered for scouts  Family foundation  Lobbying

 Food to mission  Food to mission  Gave to homeless  Gave to homeless  Gave to church  Gave to church Money  Gave to family  Gave to charities  Gave to public schools  Gave to employees  Family foundation

Generation -1 Generation 0 Generation +1 Parents Ourselves Children

People born Total Wealth Transfer to Transfer Charities August 24, 2000 (1998 – 2052) (1998 – 2052)

1906 - 1925 $3.5 trillion $0.4 trillion 1926 - 1945 $15.6 trillion $2.3 trillion All adults as of 1998 $41.0 trillion

Transfer Accumulation DealDeal closed closed Creation

Based on: http://www.bc.edu/research/swri/

Possible Paths

 Ad-hoc gifts What w e have What w e need  Gift to non-profit  Gift to public foundation  Gift to community foundation  Form private family foundation Considerations

 Self interest (family)  Those we know (business and friends)  Those we don’t know (everybody else)

“When you learn, teach. When you get, give.” - Unknown

 Create legal structure  Fund the foundation  Publicize the foundation  Understand the needs, problems and issues that are out there  Decide what interests us and where we Intel think we can make a difference  Learn how to judge requests and make grants  Meet with people and do site visits Trillium  Learn about non-profit accounting and taxes  Select a financial manager  Establish an investment policy  Manage our assets Family Foundation  Manage and review our grants Trusts  Attend conferences  Let others know about our activities  Plan for succession  Learn how to make socially responsible investments  Governance  Pass on what we’ve learned and keep learning

$12,000

10,882 Family Foundation Giving Total US Giving (billions) (2003)

$10,000 (2003) $4,000 $3,500 Individuals $179.36 $3,000 Foundations $2,500 $8,000 $266.40 Bequests $2,000 Corporations $1,500

$26.30 Volunteer time Billions $1,000 $21.60 (millions) Total Giving $6,000 $500 $13.46 $0 $0 - $1M - $5M - $10M - $100M > $1 $1M $5M $10M $100M - $1B billion $4,000 Family Foundation Assets 20000 17,546 18000 GDP of only 14 Foundation Giving 2,156 countries > 507 4% (2002) 16000 $2,000 8% GDP of only 59 14000 countries > 30 GDP of 93 largest 11% Independent 12000 507 coountries Corporate 10000

(????) 30 10 0.00025

$0 8000

Community 6,601 Operating 6000

77% foundations of family Number 4000

US GDP US

2000 1,588 1,846 Foundations 212 11

0 Total VC Investing Total VC

Source: Foundation Center Lawrence Foundation Lawrence

Total Charitable Total Giving Charitable Source: Foundation Center US Federal Federal Expenditures US

Source: Foundation Center, World Bank, PricewaterhouseCoopers MoneyTree

Filling needs -> Solving problems -> Addressing issues

Problems -> Ideas -> Views, values and beliefs

Immediate -> Short term -> Long term

Grants Direct

Unsolicited Solicited

Program Operating

Single year Multi year

Environment, Environment, Education, Education, Human Human Services Services

Time

Learning Understanding “Knowing”

What we hope for What we get  To help others make the world  Plaques, articles, a better place acknowledgements  To pass on some of our  Honorary / advisory boards and knowledge and experience committees  To learn  Knowledge and experience  An occasional thank you  Good feeling

Right way Wrong way

 Make it real  Get greedy  Be honest and tell us the good and the bad  Get impatient  Don’t respond or answer  Teach us if we want to learn our questions  Push back if we go too far  Be unrealistic  Take some risks  Don’t do your homework  Understand our frames and and know our guidelines language

Business Non-profit People Strong, transparent, predictable, and Strong, transparent, predictable, and ethical management team. Team gives a ethical management team. Team voice to the vision, gives purpose to the gives a voice to the vision, gives organization and serves the purpose to the organization and stakeholders. serves the stakeholders. Vision Addresses a real problem or need for Addresses a real problem or need for change. Is realizable, easy to change. Is realizable, easy to communicate and has good timing. communicate and has good timing. Opportunity Large and identifiable addressable Identifiable need, problem or issue. market. Value Real and understandable. Good product Real and understandable. or service value and strong, defensible market position. Execution Strong, growing and consistent revenue Strong, effective and consistent and earnings performance. performance. Exit Understandable story and strategy Understandable story and strategy to leading to a future liquidity event. fill the need, solve the problem or change views, values or beliefs about an issue.

A Home Away from Homelessness, American Friends Service Committee, American Lung Association, Bright Beginnings, Amity RegionalJune School 2005 District Grant No Cycle. 5, Anchorage (one of two Waterways cycles Council,per year) Arts and Curriculum Institute at Skidmore, Association House of Chicago, Classroom Central, Clean Air Council, Clean Water Network, Clinton Community Nature Center, California Nursing Students' Association, Cockroach Bay Users Group, Council for Educational Opportunity, Braille Institute, Crafts for Economic Empowerment, Delancey Street, Denver Kids, Denver Zoological Foundation, Deputy Educating Among the Facts of Life, Desert Area Resources & Training, Destination Conservation, Developer Earthership Concept, Dogwood Alliance, Edison Wetlands Association, Elyria Schools, Enersol, Engineers Without Borders - UC Santa Barbara Chapter, Environmental Advocates,

Environmental Association for Great Lakes Education, Environmental Defense Center, Children’s Organ Transplant Association, Epiphany Development Office, Espanola Valley High School, Eton Academy, Fredericksburg Counseling Services, Friends of Living Oregon Waters, Friends of the Sea Otter, Gads Hill Center, GOALS, Green Corps, Good Shepherd Housing and Family Services,

Great Old Broads for Wilderness, Guildhaus,feet ½ 1 Hampton Roads Youth Center, Hampton Roads Youth Center, Hancock County Soil & Water Conservation District, Harvard Medical School CCCEC, Improve Lower Scott Lake Foundation, Providence St. Josephs Foundation, Indiana Council for Economic Education, Internal Insights, International Fund for China's Environment, Iowa CCI, Island Alliance, J.C. Hispaniola, Joe DiMaggio Children's Foundation, John Barrett Middle School, Center for Rural Affairs, Kau AgroForestry Association, Louisiana Bucket Brigade, Kearney Performing Arts Center, Louisiana Bucket Brigade, Los Angeles Free Clinic, Maharishi School of the Age of Enlightenment, Maharishi School, Maine Audubon, Mediation Center of North Carolina, Mentor St. Louis, RequestsMentoring Associates, (over 200) Ohio Literacy ResourceGrants (aboutCenter, 10)Orangutan Foundation International, Olive View-UCLA Medical Center Foundation, Operation U Turn, Orange County Rescue Mission, Orange County Therapeutic Children's Arts Center, Pancreatic Cancer Action Network, PKD of Virginia Foundation, Planet Drum Foundation, Portland Impact, Progressive Economics of Environmental Protection, PRBO Conservation Science, Precious Gems SupportiveInstitution Services, Project Parents,Acceptance Refinery Rate Reform Campaign, Resource Conservation Information Institute, Resources for Child Caring, Riveredge Nature Center, Sacred Art Rain Forrest Action Network, SAE Foundation, Saint Mary's College,Venture Salvation Capital Army , TheSan Diego Teen Court, San ?Francisco River Association, Save the Whales, Save the Wild Chinchillas, SayThe No, Lawrence Stop Now!, Foundation School of Aquatic and Fishery Sciences,5% Seacology, Search Dog Foundation, Search Out Another Road (SOAR), Seeing Eye, Springfield-Greene County Park Board, Foundation for Osceola Education, Stone Soup, Baykeeper, Friends of RookeryHarvard Bay, Jewish Federation, Los Angeles Mission, Stanford10% University, Mental Health Association of Licking County, Urban League of USthe MilitaryPikes Peak Academy Region, Volunteer Center, Wellness Community,11% Turing Point Enterprises, Vantage Point Charter School, Venice Family Clinic, Virginia Living Museum, Venice Free Clinic, Volunteers of America, Wantilan Teja Samudragiri, Washington AssociationStanford of School University Business Official, Washington Toxics 13%Coalition, UCLA, Watermark Project, Tulane Environmental Law Clinic, WatersMassachusetts Edge Community Institute Elementary of Technology School, Salvation Army16%, Woods Hole Research Center, Word Xeriscape Council, YES! To Youth, Youths Initiative Development Foundation, Women at Work Source: US News and World Report GameOfPhilanthropy 1.6 © 2008 Common Grant Application. All Rights Reserved. 19 What has been the good and the bad?

Good Bad

 Saying yes  Saying no  The people  Not having enough to go around  The passion  The pace  The learning  The odds  The hope and faith  The clueless and those who  What unites us should know better

Newspaper reports published between 1995 and 2002 of incidents involving criminal and civil wrongdoing by officers and directors of charitable organizations

Activity Incidents Criminal activity 104 Breaches of the duties of loyalty and 54 prudence––self-dealing, failing to carry out the mission of the charity, and negligent management of assets Both 6 Source: Hauser Center for Nonprofit Organizations

Some short parables

 “The swing set” – what unites and divides us  “The Sav-on parking lot” – don’t assume or underestimate  “Parauresis” – don’t judge  “Treasury regs” – sometimes, no one really knows  “But, its my money” – no its not  “The Seed Lady” – the power of personality  “The California Grey’s”– the universe breathing  “Remix” – the repackaging of a story

 The game is too slow  The religion of the market requires more business people in non-profits as players  Winning is going out of business, some non-profits are too interested in staying in the game  Many non-profits are fighting to win the battles, not the war  Government is changing the rules with more unfunded mandates and shifting services, non-profits should become more active with policy makers and media (i.e. get more political)  New metaphors are needed (e.g. music, art)  Grantseekers and grantmakers are spending inordinate amounts of time and energy finding each other, applying for grants and managing grants  Non-profits should be using more technology pieces (e.g. social networking, online applications)

“Whoever decides what the game is about also decides who gets into the game.” - E.E. Schattschneider

Background Reasons

 Technology  Save time  Software  Save money  Open standards and  Decrease opportunity cost technology  Improve transparency  Family foundation  Improve visibility  1000’s of applications  1000’s of grantseekers  College aged children  Common App

“Intuition is linear; our imaginations are weak. Even the brightest of us only extrapolate from what we know now; for the most part, we're afraid to really stretch.” - Rafe Needleman and Ray Kurzweil

Grantseekers Grantmakers

 No software to purchase or  No software to purchase or install, Web-browser based install, Web-browser based  Review the background and  Review the background and interests of grantmakers activities of grantseekers  Manage contact, organization  Specify funding interests background, program, and  Receive, track, and manage background information applications and supporting  Upload documents materials  Submit, track, and manage  Collaborate with one another applications to grantmakers  Export applications and other  Collaborate with one another reports into business information systems  Small per application fee (unless waived by grantmaker)  Small asset based monthly subscription fee

 It’s all about people  People will surprise you  You can’t do it all by yourself  Never stop listening and learning  Understand the frames and languages of others  Communicate, communicate, communicate  Look forward and think backward  Pick a direction, stay focused and keep at it  Stay flexible and adaptable  Stay true to your values and principles  Learn from the differences  Embrace the surprises  Some luck is important

“Anyone who has never made a mistake has never tried anything new.” - Albert Einstein

Walk to the edge. Listen hard. Practice wellness. Play with abandon. Laugh. Choose with no regret. Continue to learn. Appreciate your friends. Do what you love. Live as if this is all there is.

- Maryanne Radmacher-Hershey

 Web-based service  www.commongrantapplication.com  Opened to users  October 2007 for grantseekers, summer 2008 for grantmakers  Current number of users  4000+ users (grantseekers and grantmakers)  Founders  Jeff Lawrence and Lori Mitchell

 Private family foundation (non-operating)  Grant themes  Environment, education, human services  Grant geography  Primarily in the U.S., secondarily - International  Initial funding  Funded in 2000 with Intel stock resulting from the sale of Jeff’s Los Angeles based company to Intel Corporation in August 2000  Grants made  Grants and commitments worth over $3 million made since inception in 2000  Trustees  Jeff Lawrence and Diane Troth (husband and wife) in Santa Monica, CA  Executive Director  Lori Mitchell in Steamboat Springs, CO

Jeff Lawrence President Common Grant Application 530 Wilshire Blvd Suite 207 Santa Monica, CA 90401 Main Phone: +1 (310) 490-1277 Email: [email protected] Web: www.commongrantapplication.com

Lori Mitchell Executive Director The Lawrence Foundation 530 Wilshire Blvd Suite 207 Santa Monica, CA 90401 Main Phone: +1 (310) 451-1567 Email: [email protected] Web: www.thelawrencefoundation.org

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