In 1999 and 2000, Steve Kirsch outlined his thoughts on a variety of philanthropic and political reform topics. Please select from the list to find those of interest to you.
Kirschs Unique Vision of the New Philanthropy
Read current information about Venture Philanthropy.
Internet entrepreneurs who have struck it rich have finally figured out that they have more money than they need. They already have the vacation homes, private jets, and latest Intel computers. And they STILL have lots of money left over.
Since they are always seeking to maximize their return on their assets, they realize that earning more money doesnt buy them anything that can benefit themselves or their family in any meaningful way.
They realize that instead of sitting on their assets, they can impact causes they care about by investing in Venture Philanthropy, or VP for short.
In fact, many retired entrepreneurs, instead of starting yet another company or going into traditional VC, open their own VP firms.
Instead of bragging about their personal net worth, you see VPs bragging about the size of their charitable partnerships and how many people they helped last year.
And individual entrepreneurs brag about how much money they donated last quarter to charity. And the San Jose Mercury News, instead of publishing a list of who makes the most money, now ONLY publishes a list of those who give away the most money each quarter.
The VPs start competing with each other to see who can build the charitable fund with the most assets the fastest. The VPs who help the most people each year have no trouble attracting funds from wealthy entrepreneurs and are over subscribed. Entrepreneurs are literally throwing money at the VPs because of the incredible social impact that they have achieved.
You start to see VP partnerships that have raised funds ranging from $500M to over $1B. And they are all trying to donate ALL this money to charitable causes in just over a few years so that they can be "fully invested."
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So the VPs are always out knocking on doors of nonprofit agencies asking people if they need money for an idea they have.
When a hot charity walks in their door asking for money, the VPs try to convince them that the charity should take money from them instead of the other 47 VP funds located on Philanthropy Hill Road.
In addition, the VPs try to convince the hot charities to accept a lot more money than they were asking for originally. The VPs try to convince the charities that their problems are really a lot harder than the charity thinks, and that there are people who really could benefit from the charity NOW so time to market and grabbing market share early, before there is lots of competition from other charities, is absolutely critical.
The VPs all make a long-term commitment to the success of each charity. They sit on the board and help build the management team. If the charity continues to do well after the first year of funding, the VPs want to get other VPs involved in a second round of financing and donate even more money to the charity.
Soon, the charity goes public. This allows the charity to accept donations from the public at large, not just the VPs.
On IPO (Initial Philanthropic Offering) day, the charity is flooded with people wanting to donate. Everyone wants to get in on the action because they know that their non-monetary return is the short run and the long run will be huge, much better than putting their savings in the bank or Microsoft stock. There is such incredible demand, that the size of the average donation on the first day of donating rises dramatically. Nobody wants to be left out.
While my wife, Michele, and I dont expect my VP scenario anytime soon, weve found that anyway you look at it, the logic behind giving is compelling. Hopefully well be able to convince a lot more people to step up to the plate and establish big funds and actively manage them. Everyone wins in that scenario.
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