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A wedding as philanthropy

Prince William and Catherine

When the Duke and Duchess of Cambridge married in 2011, they joined a trend that is already well-established in the United States —namely, beginning married life with an act of philanthropy.

In place of wedding gifts, they asked for donations to the Prince William and Catherine Middleton Charitable Gift Fund. The fund benefitted 26 nonprofits —all causes that are “close to their hearts and reflect the experiences, passions and values of their lives so far,” according to the fund’s website. Not surprisingly, the fund was a massive success. Buckingham Palace says about $1.7 million dollars were raised.

The couple’s first public engagement after the wedding also benefitted a charity, the U.K.’s Absolute Return for Kids (ARK). The Prince used the occasion to announce that his wife would be joining the foundation he has with his brother, Prince Harry, and that together, they “hope to use our philanthropy as a long-term catalyst for meaningful change.”

What does that mean? Well, in the following passage from a prayer they recited at their wedding at Westminster Abbey, there is an indication that their philanthropy as a couple will be oriented by compassion and service.

“… In the busy-ness of each day keep our eyes fixed on what is real and important in life and help us to be generous with our time and love and energy. Strengthened by our union, help us to serve and comfort those who suffer …”

Prince William and Catherine are no longer accepting donations to their wedding fund. But the idea still holds a beguiling attraction —even for those of us without royal blood. Why not start off a committed relationship as you mean to continue —by giving

The death of a partner and the importance of a giving plan

Mike Schaefer and Ric Weiland

Philanthropy was more than just a shared interest for Mike Schaefer and Ric Weiland, it was “a core value that brought us together,” according to Mike. And when Ric died unexpectedly in 2006 at the age of 53, philanthropy remained something that united them.

Individually, both had committed to give the majority of their wealth away long before they had met, and long before their investment portfolio began showing dramatic gains in the early 1990s. Ric had garnered his wealth as one of the early employees of Microsoft. During his life, Ric donated at least $30 million to carefully researched organizations. When he died, another $180 million dollars was allotted to 20 of these organizations, according to the directions of his estate plan.

Mike sums up their reasoning this way: “Why wait until you’re old and senile—or dead—to give to the causes you believe in? It made sense to have a thoughtful giving plan and spend our time helping to build the capacity of our beneficiaries so that they would be ready to astutely handle a more significant investment in their work whenever the time came.”

More than half of Ric’s estate, $110 million, went as unrestricted gifts directly to low-risk, well-established institutions including Stanford University, the United Way, Children’s Hospital, and the Nature Conservancy.

Another $65 million is being distributed over eight years through a donor advised fund at the Pride Foundation to smaller, higher risk organizations, including ten national LGBT (lesbian, gay, bisexual, transgender) nonprofits that represent a broad cross section of the gay rights movement. “We knew these would be unprecedented bequests and likely a challenging amount of money for many of these organizations. The good news is that Ric was a longtime supporter of these causes and had focused on building their capacity for almost two decades.”

Mike says he, as the surviving spouse, is “doing just fine and dandy without the hassle of receiving any significant portion of my partner’s estate. By agreeing in our estate plans to establish charitable remainder trusts for our loved ones, and give all our assets to specific charities at the death of the first spouse, we sure saved a lot of hassle—and I have been able to move on with my life.”

He admits their approach was unusual, but he recommends it as a very rewarding giving style.

“Our goal was to build community wealth, not personal wealth. We felt the potential for a transformational return on our investment was much greater if we built a strong community than if we just grew our family investment portfolio … While our philanthropic plans were accelerated due to tragic, unexpected circumstances, my hope is our example will help others accelerate their giving.”

Inheritance and finding a power balance

Cassandra, an Irish-American, and Craig, an African- American, described themselves as “just another bi-racial couple from Laramie, Wyoming.” Both 40-something geologists, they worked in the oil business, earning similar paychecks. Then Cassandra inherited a significant sum from her father, who had run a successful hedge-fund. She felt inspired by the gift and wanted to start a charitable giving fund. Craig didn’t agree. He thought they should invest the money and wait to do their major philanthropy later. It also bothered him that many people, he felt, now judged him because of the wealth of his wife. He didn’t talk about it, but he felt threatened by the huge change in the financial balance of their relationship. Cassandra knew he was unhappy and so offered him two options: 1) she would give the money to another foundation to disperse and they could go back to the way things were; or, 2) they would each commit to a 50/50 split of responsibilities and powers in a new foundation they would create themselves. Craig opted for the second option and they sat down with a philanthropic advisor and their lawyer to develop their giving strategy and prepare the groundwork for the new foundation. Over time, they discovered that a 50/50 split in power made things difficult because it meant they often had to negotiate and compromise to move forward. But that difficulty also had a positive side. It deepened their partnership by regularly showing them that they could overcome obstacles as a couple and find unity in the face of initial disagreement.

This composite story combines elements of real experience from a number of donors. Details have been changed to protect privacy.

Think big, take risks and get involved

Laura and John Arnold

Laura and John Arnold never dreamed they would have the wealth to seek lasting change in the world. Still in their 30s, they describe a “middle-class” upbringing, attending public high school and working their way through college. But that was before John found extraordinary success with his hedge fund Centarus Energy, building a net worth in the billions through his natural gas investments.

Laura is an attorney and a former oil company executive. Together with John, she saw a great opportunity in their significant wealth —an opportunity to do good.

In 2008, they formed the Laura and John Arnold Foundation, dedicated to seeking transformational social change through innovation. In 2010, they joined the Giving Pledge (givingpledge.org), promising to “devote the majority of our wealth, time and resources to philanthropy in the coming years.” Their goal: to maximize opportunity and minimize injustice. Their focus areas: criminal justice reform, education reform K–12 and public accountability (in particular, reform of public employee pension benefits).

Their foundation also works in knowledge management, developing interactive databases for major issue areas (beginning with education) so that all the research, policy, organizations, technology, and other data is all in one place and useable. When complete, these will be free to the public.

The Arnolds decided jointly on an entrepreneurial approach to addressing society’s problems, incorporating leveraged giving, collaboration with other philanthropists and investments on a scale calculated to have a large impact. One example of this kind of giving came in 2011. They matched the $25 million gift of philanthropists Eli and Edythe Broad to Teach For America. The Robertson Foundation and Steve and Sue Mandel also gave matching gifts to reach a total of $100 million. The money went to create an endowment for the nonprofit, which recruits recent college graduates to teach in low-income schools. The gift was meant to be transformative — so the nonprofit could be seen not as a movement, but as a lasting institution, with an endowment like a university to fund its ongoing operations and growth.

Most striking, however, is the Arnolds’ joint approach to managing their giving. The co-founders see themselves as part of the working “team” of their foundation —influencing “the organization’s overall direction and daily execution.”

They say it comes from a sense of responsibility: “We are deeply indebted to our community and our country for the many opportunities granted to us, and for a social and economic environment in which we could make the most of those opportunities. We consider it our responsibility to ensure the same opportunities for others.”

Even though they are early in their careers as philanthropists, they have already made significant decisions about funding their philanthropy and setting a time horizon for their giving. On their website, they state: “Philanthropists should seek to create significant change within their own lifetimes and exhaust most or all their financial corpus in pursuit of their goals.”

Narrowing focus for big impact

Marc and Lynne Benioff

I n 2010, Marc and Lynne Benioff decided to radically change their approach to their personal philanthropy by rolling five years of giving into one donation.

The $100 million gift, to be paid over five years, will help fund a new children’s hospital and research facility at the University of California at San Francisco (UCSF) where Lynne gave birth to their child in 2008.

The move represented a huge change of strategy for the couple. Previously, the billionaire chairman and CEO of Salesforce.com and his wife, who is a trustee on the UCSF foundation board, gave mostly anonymously. They spread their support among a wide variety of nonprofits, ranging from endowing chairs at a university to giving money to a monastery in Bhutan.

They decided on a new approach because they felt they had achieved mixed results and in the words of Mr. Benioff: “You should be able to make a gift and see that it was having some kind of impact.”

The impact they sought with their high-profile gift is two-fold. First, they wanted to help create “the most advanced children’s hospital in the world … supporting the translation of medical research into clinical practice.” And second, they wanted to encourage other philanthropists to support the project.

The Benioffs say they will retain a single philanthropic focus on the hospital for an additional five years after the $100 million gift is completed in 2015. Then, “we’ll reassess in 2020 where we are and look for the next target,” said Mr. Benioff.

In the meantime, corporate philanthropy through the Salesforce.com Foundation will continue as normal, supporting nonprofits with technology innovation, volunteer time and annual grants.

What happens to a couple’s philanthropy after a split?

Doug and Molly worked together to create a very successful business building homes across the Midwest. In 2008, they sold the business and formed a family foundation dedicated to supporting sweat-equity organizations like Habitat for Humanity. Two years later, in spite of —or perhaps because of —their increased time together, Doug and Molly’s relationship disintegrated. He moved out. There was a new girlfriend. Then, finally, a divorce was granted. Doug assumed that Molly would continue to support the foundation, but instead she wanted to break it in two. He was incensed. He had earned the money, he reasoned. She had supported the foundation and its goals. Now, he felt she was doing this to spite him. On the contrary, she said, she just didn’t want to have that shared responsibility any more. Besides, her philanthropic goals had changed. She now wanted to support entrepreneurial businesswomen in the Midwest with small grants and training. The couple was at an impasse for an entire month. And then Molly offered a suggestion: why not ask their twins, who were both college-aged, if they would sit on both boards. This would introduce them to philanthropy, but also give some family cohesion at a difficult time. Doug felt splitting the foundation was still inefficient. But his consideration for his children made him re-think his position. When he called them each on the phone, he found that they were enthusiastic about the plan and positive about working with him on his nonprofit housing projects. That made all the difference. Doug agreed to the split and both foundations have made a successful transition.

This composite story combines elements of real experience from a number of donors. Details have been changed to protect privacy.

Who sits at the philanthropic table?

One couple from Arizona, Samantha and Travis, decided they wanted to encourage an ongoing family legacy of giving. They worked hard to include their three adult children in key family foundation decisions and allowed them to allot some grants on their own. But when the children wanted to involve their spouses, Samantha stoutly rejected the idea. After a few months of wrangling, her children refused to sit on the family foundation’s board. And Samantha and Travis were left as the only trustees of their family philanthropy.

This composite story combines elements of real experience from a number of donors. Details have been changed to protect privacy.

eBay fortune funds hybrid philanthropy

Pierre and Pam Omidyar

Pierre and Pam Omidyar stand out for their strategic, hybrid approach to giving as a couple, but their style has undergone a huge evolution since September 1998 when eBay went public. (Pierre was the founder of eBay and remains chairman of the board.)

“We had priced the initial public offering at $18 a share,” Mr. Omidyar wrote in a 2011 article for the Harvard Business Review. “During the course of the day the stock rose to nearly $54 … On paper my stake was more than $1 billion. It was shocking and completely unexpected. Soon afterward I began having conversations with my fiancée, Pam —now my wife —about what we were going to do with all that wealth … Within a few months we’d created a nonprofit family foundation, which is what new philanthropists typically do. We took an informal approach … We gave money to this charity or that charity. It was a responsive thing —we would read about something in the newspaper and it’d be ‘Let’s give money.’ After a couple of years we realized we needed to professionalize the foundation and become strategically driven. We recruited some executives to help us think about how to take lessons from eBay and apply them to philanthropy.”

The Omidyar Network, a philanthropic hybrid which funds for-profit social enterprise projects as well as nonprofit organizations, was one result of this approach. It was co-founded by the Omidyars as what they call “a philanthropic investment firm.” Through this unique giving vehicle, the Omidyars have committed $442 million since 2004 —$239 million in nonprofit grants and $203 million in for-profit investments. More than $100 million has been committed in the area of microfinance.

In addition, Ms. Omidyar founded two nonprofits on her own — Hopelab, harnessing technology to help young people with chronic illness, and Humanity United, dedicated to building peace and advancing human freedom. After moving to Hawaii in 2006, the couple decided together to begin new philanthropic efforts in the Islands. They gave $50 million to the Hawaii Community Foundation and have started the Ulupono Initiative to support both nonprofit and for-profit efforts for Hawaiian sustainability. “We don’t just write checks,” they say, “we engage deeply with the organizations we support.”

The couple says the eBay community taught them a valuable lesson: “people respond to opportunity in inspiring ways.” This insight is a major influence on their giving strategy. “The organizations we’ve created and the time and energy we spend on various causes is rooted in our belief that people are inherently capable but frequently lack opportunity.”

For the Omidyars, the key is how they define their work. “Philanthropy is a desire to improve the state of humanity and the world,” Mr. Omidyar writes. “It requires thinking about the root causes of issues so that we can prevent tomorrow’s suffering. And if we want to make sustainable change, we have to put all the tools at our disposal to their best possible use.” And that means using the techniques of venture capitalists as well as the traditionally more risk-averse approaches of nonprofit organizations.

For their philanthropy, it also means a determination to “give away the vast majority of our wealth in our lifetime,” as they wrote in their Giving Pledge letter to Warren Buffet and Melinda and Bill Gates. “We have more money than our family will ever need. There’s no need to hold onto it when it can be put to use today to help solve some of the world’s most intractable problems.”