London Summit—Strategic Philanthropy: Investing in the Next Generation of Entrepreneurs
To Make a Real Difference, Mind Your Charity’s Business
Active philanthropy helps ensure that a charity becomes self-sustaining, said the panel speakers. They drew from their first-hand experience to share action-oriented advice for philanthropists who want to truly advance causes they care about.
“Roll up your sleeves, seek out best practices and unleash creative activity,” said Mike Milken, chairman of the Milken Institute. Just as finance is about more than making loans, philanthropy involves more than simply writing checks. At its best, each is about recognizing human capital and finding meaningful ways to help others thrive. “If we can get people living longer, healthier, higher-quality lives, we can dramatically change the world,” Milken said.
As Sir Tom Hunter, founder of the Hunter Foundation, put it: “The outcomes of our philanthropic giving are even more important than the outcomes of our for-profit investments.” For this reason, Hunter’s philanthropic support hinges on an agreement of accountability at the onset. “If you don’t measure the outcomes, you’re doing the charity a disservice,” he said.
Igor Tulchinsky, founder and CEO of WorldQuant LLC, already has a metric in mind to measure the efficacy of his own philanthropic venture, WorldQuant University, the world’s first tuition-free online master’s program in quantitative finance. Taking a page from the Sharpe ratio, used for calculating risk-adjusted return, he plans to compare students’ salaries with average salaries in their home regions. “In business you get very direct feedback, but in philanthropy … you have to dig in to see what’s important,” Tulchinsky said.
Milken highlighted the importance of targeted strategies in education and medicine. For example, focusing directly on teachers has a powerful effect in the classroom — a principle that drives the Milken Family Foundation’s Educator Awards, which creates a lot of excitement around excellence in teaching.
It’s a lesson Hunter said he wishes he’d learned earlier. “When we started down the road of looking at education, we wasted a lot of money looking at the wrong things,” he said. “Whereas if I had spoken to Mike [Milken] and Bill Gates, whom I have subsequently spoken to … [about] the teacher as the silver bullet, I could have saved myself millions of dollars.”
Likewise, supporting disease-specific organizations rather than those that cast a wide net yields more significant results, Milken said. He added that research transparency prevents duplication of effort, saving precious time in the search for cures. “We concluded then that if you didn’t share annually what you had done, then we couldn’t fund you,” Milken said, emphasizing the importance of best practices.
Panel moderator Rich Ditizio, chief operating officer of the Milken Institute, highlighted the importance of innovation in philanthropy, from finding ways to optimize funds to recognizing the best tools available to advance philanthropy. “Technology needs to be your friend in philanthropy and you need to leverage it,” he said.
That is certainly what Tulchinsky has done with WorldQuant University, which is opening up new possibilities in far corners of the world. “For example, there is a farmer in China that has signed up for our university. This is a guy who was a brilliant undergraduate student, but in China they had laws you had to go back to the farm or you lose the farm, so before he couldn’t do it so now he can,” said Tulchinksy. “That kind of outcome gives you satisfaction … because you’re reaching people who otherwise couldn’t be reached.”
And at the heart of it all, successful philanthropy — like business — is driven by passion. “This is the best fun you can have,” said Hunter.