How These Business Mavericks Are Rethinking Philanthropy |
When billionaire investor Bill Ackman gets a pitch asking for a grant from his foundation, he starts with a question that sounds more like a venture fund screening process than a charitable exercise: Is this a problem the market can already solve? For Ackman, the highest-impact philanthropy exists where markets and governments have failed to produce workable solutions.
One category is in what he calls “blue-sky” scientific research, where scientists look for ambitious breakthroughs in problems in healthcare and other areas – like his Pershing Square foundation’s MIND prize, a yearly award of up to $750,000 to six researchers supporting cutting-edge research on neurodegenerative diseases like Alzheimer’s and Dementia. He has also expressed applying artificial intelligence to solve long-standing problems in areas such as housing and K-12 education. This gap-filling approach to philanthropy has guided Pershing Square to distribute more than $930 million in gifts and grants since 2006 to tackle unique issues like cancer research, neuroscience and ovarian health.
“I think there's both good philanthropy and bad philanthropy and I try to do good philanthropy,” Ackman tells Forbes. “There are lots of different ways to have impacts…philanthropy I think is a very useful tool to solve certain problems that there isn't currently a for profit solution for.”
Cari Tuna, the wife of Facebook cofounder Dustin Moskovitz and a leading philanthropist, puts it this way: “Governments need to justify decisions to voters; businesses answer to shareholders. Philanthropy faces fewer of these constraints,” she said at a recent Stanford philanthropy summit. “The freedom to act in the face of uncertainty and take on risk is one of philanthropy’s most underused, structural advantages.” So instead of donating to the causes that the ex-Wall Street Journal reporter and her husband are most passionate about, they give to the riskiest areas where they can have the greatest impact per dollar in hard-to-reach areas.
Gone are the days when the world’s wealthiest just donated to their alma maters and legacy institutions like museums and libraries in exchange for their names on buildings. Now, many of these icons of industry are applying contrarian thinking to........