(photo credit: WORLD ECONOMIC FORUM/WIKIMEDIA COMMONS)
Several weeks ago I watched the most amazing interview with Warren Buffett and Bill Gates on the CBS news magazine program, 60 Minutes. Many of you may have seen it as well. While watching it I immediately thought of Jewish philanthropists who contribute to and support nonprofit organizations in their local communities and in Israel. In the TV interview, Buffet and Gates delivered two major messages to philanthropists and donors.
The first is that knowing how to earn money and how to use money to make more money does not necessarily mean you know how to use your philanthropic wealth in the most effective and efficient way. If someone is a high-tech innovator or a whiz at investing money to increase assets, it does not mean that person knows how to engineer or manage funds to be used in the nonprofit sector and to fund nonprofit organizations. The skill set that enables one to be successful in the former, is not necessarily transferable to the latter.
Buffett and Gates knew they wanted to use their philanthropic wealth to make meaningful changes in the quality of the lives of people who were confronting challenges that prevented them from achieving more for their families and themselves. They also knew the limits of their expertise in philanthropy and were willing to turn to others who could both advise, and then help them implement their pursuits in improving the lives of others.
They understood that in the same way they are experts in their fields, there are highly skilled philanthropy professionals who could assist them in philanthropic ventures. In the Jewish community those experts can be found in local community foundations that develop a variety of instruments for aiding donors who want to set up family foundations or philanthropic funds, such as donor advised funds or living wills and trusts. Jewish donors in these communities should avail themselves of these kinds of services. By doing so they will be able to explore a variety of options that may meet their philanthropic needs, and that they may not have known existed.
If you are in a community that does not have a community foundation there are often accountants, lawyers, or philanthropic advisers who can provide the same knowledge and expertise. Of course, devising an instrument that responds to the philanthropist’s concerns and interests is only one part of the story.
Once a fund or foundation has been established then the focus is on soliciting proposals from nonprofit organizations, which provide services in the areas congruent with the philanthropist’s interests. There are a variety of approaches, whether having an open request for proposals or soliciting proposals from specific organizations. Once the proposals have been received, then a philanthropic adviser, either one with a community foundation or private consultant, can assist the philanthropist in reviewing the documents and evaluating which program( s) is/are appropriate to fund.
Before funding the projects or programs, a reporting system should be in place that includes a self-evaluation process. It is also not unusual to include a planning process prior to implementation, and all of this should be clear from the grantee’s proposal and work plan.
Funding can be provided on a quarterly or semi-annual basis, and the transfer of money should be based on progress reports detailing the activities related to the project. As these reports, which include both programmatic descriptions and budgetary information, are submitted, then the funder is in a position to ask for further clarification or to authorize the next payment to the agency. Utilizing the services of the community foundation, which can guide you through this process, can be a learning experience for philanthropists and simultaneously enable them to be more effective in their use of their funds.
The second message of the interview with Gates and Buffet was the importance of a mega-donor fund for the Jewish people.
These two men are challenging very wealthy people to follow their example and donate 50 percent of their wealth to philanthropic causes. They have formed an informal group of fellow philanthropists who have made this pledge, and they meet to share their experiences and challenges and to consult with each other. The Jewish community can take a page from their book.
The key questions that very wealthy donors in Jewish communities around the world must ask themselves are, “How much money do I really need and how much money does my family need? At what point do I say I have enough money and I want to give the rest to benefit the Jewish people in my community, around the world, and in Israel?” How is it possible to encourage those fortunate few who have hundreds of millions or billions of dollars, to follow the example of Buffett and Gates and decide to donate everything over a certain amount of their wealth for the benefit of the future of the Jewish people? In these pages I have written about the need for a Foundation for the Jewish People.
Let me suggest that those of our people who have been very fortunate to have been able to amass mega-wealth be approached to ensure the future of the Jewish people through such a fund. Each donor would be able to decide whether he or she wanted to support projects initiated by the Foundation or to fund other initiatives. The Foundation would be in a position to assist them in using their funds effectively and efficiently in whichever way they decided to use their resources.
On 60 Minutes, Buffett said, in a tongue-and- cheek manner, that he is going to write a book on How to Get Along on $500 Million.
We should follow his example and develop a similar approach with mega-wealthy Jews.
We are living in a time when the collective wealth of the Jewish people is greater than it has ever been, and we have an opportunity not only benefit to ourselves but also to secure the future for another 5,000 years of Jewish peoplehood.
Why not think about doing for our people what Buffet and Gates are doing in the general philanthropic world? It would be a shame to miss such a historic opportunity.
Let us hope some Jewish philanthropist will take up the challenge and implement it with his or her colleagues.The author is a lecturer at the Hebrew University’s Rothberg International School’s MA Program in Nonprofit Management and Leadership, runs Stephen G. Donshik Consultants, Ltd. and is the author of Strengthening Organizations and Their Leadership for Tomorrow.