Showing posts with label Warren Buffett. Show all posts
Showing posts with label Warren Buffett. Show all posts

Sunday, September 7, 2014

Venture Philanthropy

(Originally appeared in the August 15, 2004 edition of the Century City News)

By Courtney Ryan Fitzgerald

There’s a lot of money in this town.  And money isn’t just about power.  It’s about responsibility. 

“Century City has a higher concentration of financial advisors, attorneys, and CPAs than any other city I can think of,” says Mary Buffett, mother to the heirs of Omaha sage, Warren Buffett.  Ms. Buffett, author of Buffettology, along with Omninet Capital president, Ben Nazarian, and Lathem & Watkins’ Barry Sanders, will speak at the Century City Plaza on September 22nd during a lunch and panel discussion about “Using Wealth to Effect Social Change.” As Ms. Buffett indicates, this town at the summit of the fifth largest economy in the world certainly has the ability to exercise “powerful influence.”  The hundreds projected to attend this power lunch will have plenty on their plates, indeed.

Warren Buffett’s ex-daughter-in-law certainly knows the curious nuances of philanthropy.  When I was married, all of the family would have a chance to review various requests of the foundation each year.  It was an educational experience,” she says. “It was always impressive that the foundation’s gifts were specifically focused on helping abortion rights and other population control groups, universities, teachers, students, and, most recently, hospitals.”

It’s a bit risky for high-profile billionaires to give money to controversial causes like abortion rights.  But business can be risky by definition.  Likewise, sometimes with philanthropy, too: the greater the risk, the greater the reward.  “Using the venture capital model,” explains Brian Weiner, founder of the Law & Business Council and originator of September’s panel discussion, “venture philanthropy breaks away from the traditional charitable giving model in that people are now funding new research and scientific experiments aimed at receiving measurable returns on civic investment.  This leads to much greater breakthroughs in the effort to find a cure or solution to a particular social problem.”

September’s luncheon will focus in part on the future of the next generation of philanthropists and their finding these social solutions.  What risks will Warren Buffett’s granddaughters take with their inheritance? “They are the future leaders of the community,” underscores Weiner, “they are the ones who will be sitting on the boards and making the decisions and having the ability to do a tremendous amount of good for the community with both their wealth and their influence.”

If generations X, Y, and Z are ill-prepared, where will their money go? “Family foundations are only required to give a minimum of 5% of the total assets to charity,” clarifies Weiner, “they can keep it literally sitting in the family foundation forever.  They don’t have to give it.  Knowing this, a lot of community foundations and local charities are very concerned about getting on the radar screen of these next generations.”

According to Ms. Buffett, there’s a certain community accountability that comes with affluence.  No one lives in a vacuum.   The wrong thing would be to ignore our interdependence,” she says. “For a person with privilege, it is his or her responsibility to realize the capacity one has to create change.” 

The same goes for the corporate world, too.  Rather than focusing on the notion of a “supply chain,” corporations should focus on the greater good for the greater number result that the notion of a “value chain” provides environmentally, socially, and in all points between. 

“I believe that people more fortunate than most have a certain responsibility to our planet and other people to create conditions that allow for sustainability,” continues Ms. Buffett. “As the Great Law of The Iroquois Confederacy states: ‘In our every deliberation, we must consider the impact of our decisions on the next seven generations.’”

So, how does this particular Buffett choose to be philanthropic, exactly?  She’s an ambassador for Greenstar, a non-profit providing solar power and e-commerce to developing countries.  She hosts benefit art showings. She purchases products made by responsible companies and teaches her children to care for their neighbors.  Whether that means visiting a local nursing home or gathering trash on the street,” says Buffett, “any small or large task is contributing to a better world.”

In today’s tightfisted governmental climate, philanthropy has even become crucial, if not essential, to society’s conservation.  “It is a sad state of affairs when our health care system fails to meet people’s basic requirements,” says Ms. Buffett.  Where the government gaps, private individuals have to step in to make up the difference, like Warren Buffett recently did by giving $6 million to UCSF for recruiting new faculty and exploring novel therapies in the Department of Otolaryngology - Head and Neck Surgery at the Comprehensive Cancer Center.  “Private support of this kind is critically important to the long term success of this and many other programs,” says Ms. Buffett.

Are people of the next generation in tune enough with today’s social issues and political misgivings to follow the Mary Buffett model?  Or could philanthropy fall by the wayside, while civilization gets Scrooged into regression? September 22nd is about making sure that doesn’t happen.