Yesterday, I wrote an article about the difficulties associated with giving away $1 billion in a 12-month period. I said that I would deal today with how I would do it. Here’s how I would do it.
In giving away money, I want to get the most bang for my buck. That phrase comes out of the Vietnam War, and it has become part of the colloquial language of Americans ever since.
I begin with this question: “What could this money due to promote positive long-term change among the largest number of people?”
THE #1 HISTORICAL MODEL
Let me provide a model. It is probably the classic model in the history of philanthropy.
The richest man in the world on January 1, 1901, was Andrew Carnegie. He had just sold Carnegie Steel to United States Steel for about $460 million. This was not cash, but it was in the form of long-term bonds. He got about $300 million of this personally. There was no income tax in 1901.
Carnegie did what he said he was going to do, namely, to give away this money. Over the next 18 years, he almost achieved his goal. He gave away almost all of it. There has never been this richer man in history who gave away most of his money in his lifetime. Wikipedia says: “Carnegie died on August 11, 1919, in Lenox, Massachusetts, of bronchial pneumonia. He had already given away $350,695,653 (approximately $4.8 billion, adjusted to 2010 figures) of his wealth. At his death, his last $30,000,000 was given to foundations, charities, and to pensioners.”
His various Carnegie foundations were taken over by the American Establishment. Here, his money achieved a lot of bang for the buck, but it was mostly for evil. He had been a far greater benefactor to the American people by his massive cost-cutting in steel production, price competition in steel sales, and the creation of all new world, a world of skyscrapers, railroads, and everything else that used steel.
The same thing happened to the Rockefeller foundations. The same thing happened to the Ford Foundation.
His most famous charity category was to money to build free libraries. He knew what he was doing. He built the original library in a particular town, and he made certain that there was money to fill it with books. Then he walked away. That forced the local town councils to start funding the libraries on a permanent basis. In effect, he addicted the public to the idea of free libraries, and then he handed over the now-addicted public to local politicians. This was called pump-priming in later years. It remains the model of how to get politicians to pony up money forever to promote a particular project.
I want to do the opposite. I want to take something that the government already funds on a permanent basis, and persuade voters not to fund it by as much any longer. I want to do a “reverse Carnegie.”
Then there is the question of maximum impact. How can I change the lives of the largest number of people?
(For the rest of my article, click the link.)