The view from out there
Steve Kirsch is the founder of four high-tech companies, including Infoseek and now Propel, an E-commerce software-and-services business that will donate 1% of its initial equity to charity. He's also, with his wife, the cofounder of a $90-million philanthropic foundation. We asked him about his campaign to bring other Internet millionaires into philanthropy.
It's only within the past year that I've started to press people to give. Prior to that, my attitude was that it's a personal thing, and you don't want to pry into other people's affairs. But seeing the disparity between the number of people who have wealth and the number of givers changed me.
There was a crisis not too long ago in our community. The United Way of Santa Clara County had an $11-million shortfall and was unable to fund agencies that it had supported in the past. When I read about it in the paper, I thought, "For sure, somebody's going to just write an $11-million check." I mean, there are a lot of billionaires around who could write that check and never even know the money was gone. And so I waited a week. Nothing happened. So I called up the Community Foundation Silicon Valley (CFSV) and asked if there was any way to donate to the United Way without endorsing the way the fund was managed. And the people there said, "Sure, you can set up a separate fund, and the money will go directly to the charities." I said, "Great. Here's my million dollars."
EBay followed my lead, but the interesting thing was, there was only one other individual in Silicon Valley who also put in a million dollars: [Intel chairman emeritus] Gordon Moore. In this whole area, where you have all these guys -- what is it, like one in 10 people is a millionaire? It's like driving down the street in your neighborhood and seeing a house on fire. Do you report it and do something about it? Or do you drive right by? Everyone was driving right by.
It was an incredible test of the amount of philanthropy in the area. Here you have the wealthiest region on the planet, and you have a social crisis, and a guy who doesn't even live in the area -- Bill Gates -- contributes almost half of the needed funds. That made no sense. It showed that the level of philanthropy in this area is ridiculously low. According to a survey done by CFSV, 45% of the area's top earners give $2,000 or less a year to charity. And some relatively high percentage -- like 6% -- give nothing.
I think part of the reason for the low numbers is that people have been working their butts off to make a lot of money, and now that they have a lot of money, it's like, "Well, gee, if I just worked my butt off to make a lot of money, then why would I give it away the next day and have to start all over? I want to enjoy the fruits of my labor." I think another part is ego: "Gee, if I'm not worth $100 million, I'm not as good as the guy next door who's worth $200 million. So if I donate any money to charity, then I'm going to be reducing my net worth, and the way that I personally value myself is by my net worth."
My argument to them is: A lot of people are worth a lot more than you are, and it's a lot less competitive to be on the list of biggest givers in Silicon Valley than on the list of the wealthiest people in Silicon Valley. So why not compete where you can be in the top 10?
My grand vision is that maybe someday people will invest in charities the way they invest in Internet companies: when they see a charity that's really effective, they'll throw more money at the charity than the charity is asking for. For example, the charity will say, "Gee, would you give us $10,000?" And people will say, "Well, how about $50,000? The problems you have are a lot bigger than you think, and you need to grab market share faster."
Wouldn't it be fun if we treated charities the same way we treat start-ups? Wouldn't it be nice if charities were oversubscribed the same way a hot dot-com company is when it's trying to raise money? I'm not too optimistic, however, about that happening anytime soon. -- From an interview with Thea Singer
For more insight on the current state of small business, see The View From Out There.
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