The New York Times has published its annual supplement on giving. This includes an article by Matthew called “about leverage”. This explains why philanthrocapitalists should continue to use “leverage” as their favourite buzzword, despite the fact that leverage on Wall Street helped cause the financial crisis, and we are now in a period of aggressive financial “deleveraging”.
The fact remains, philanthropic dollars are small relative to other budgets, such as those of governments and big business. To achieve the massive impact they desire, philanthrocapitalists need to find ways to use their money to influence how those far bigger sums are spent, which is what they mean by leverage. Indeed, the need for philanthropic leverage may be greater than ever in these tough economic times.
The rest of the giving supplement reinforced everything we have been saying about philanthrocapitalism, and the need to be effective and businesslike in philanthropy. A great example, which we wish we had written, was by the excellent New York Times columnist, Joe Nocera, about Michael J Fox. The star of Spin City has Parkinson’s disease and has created a foundation to find a cure.
Among other things, reports Nocera, Fox’s foundation has been supported by Andy Gove, a former boss of Intel, and by the hedge-funder dominated Robin Hood Foundation, whose annual gala convinced him that “if I came up with a plan, I could have access to people” with money to fund it. From the start, Fox “wanted the foundation to be run by someone from the business world.” It demands accountability and information sharing that is almost unheard of in the broader scientific community. It is “unafraid to finance risky ideas.” It has become the “most credible voice on Parkinson’s research in the world.”
Nocera concludes that there is “no doubt that far more progress has been made than if the Michael J Fox Foundation did not exist” – though it has not achieved as much as quickly as Fox had hoped. As for Fox, “I learned that for this to be an effective organisation, it really does have to be run like a business. You can’t be afraid of making mistakes, but you have to have a certain level of efficiency. You need machinery to be in place. And you have to have a bottom line of some sort.” Michael J Fox: true philanthrocapitalist.