Why give?

This document outlines:

  • the reasons why we donate
  • the excuses people have for not donating (and the surprising facts that they aren't aware of)
  • the scoring criteria we use to evaluate donations
  • recent major gifts
  • a case history: the Targesome $2M grant
  • philosophy on giving: people vs. project vs. commecial venture

as well as the current status of funding:

  • list of areas where we are funding now
  • list of areas on deck that we will fund subject to availability of funds
  • list of areas where we are looking for people to fund in the near future

Why we donate

  • Note: this list is a bit redundant and needs to be tightened up
  • Because if we give now, it may result in a discovery that may save our life someday, or significantly impact the quality of our life in the future. Ditto for those that we care about. Or it may positively impact future generations of our family. And the earlier we give, the greater the chance of a benefit accruing from that gift.
  • Because, contrary to popular belief, giving is NOT like going to the dentist: "it hurts, but it is good for you."  In reality, giving is both satisfying and good for you!
  • Because we have more money than we need ourselves, so we might as well put it to good use to help others
  • Since the best things in life are not all that expensive, what else are you going to do with the money?
  • Because it would be selfish to indulge ourselves by spending the money on ourselves; we wouldn't feel good about it
  • Because we already have enough stashed away for a rainy day
  • Because if you evaluate the alternatives (using the money to generate more money or just saving it), the net benefit is just more money and there is no benefit to more money beyond a certain threshold. So there is no return on investment in terms of net incremental value received (unless the objective is to invest the money so you can give substantially more money in the future, but we are already doing that with the funds in the endowment). So by donating to charitable causes, there is can be a personal net benefit, as well as a net benefit for others.
  • Because we admire other people who have been generous with their wealth
  • Because when confronted with making a choice between the two alternatives, we'd rather be seen as people who are proactive about giving, rather than reactive
  • To set an example. Because there are more worthwhile charitable projects in need of funds than funds available. It's up to all of us to do what we can help bridge this gap. We're just doing our part. It works best if we all pitch in and re-distribute the wealth intelligently.
  • Because there are no tax advantages to giving after you are dead
  • Because there is no personal satisfaction or personal benefit to giving after you are dead (or about to die)
  • Because if we give now, we can enjoy the benefits of that giving during our lifetime
  • It's fun
  • Because while we all hate spending our own money, we all love spending someone else's money. The nice thing about a charitable fund is that after the initial "pain" of that first donation, you get to spend someone else's money (namely the charity you just endowed) for the rest of eternity (assuming you only spend 5 to 10% and get a reasonable rate of return, your endowment will last forever)
  • To make a difference in the world
  • To make a positive difference in our life and the lives of people we care about
  • To contribute to society
  • It's interesting; we learn a lot of things you wouldn't normally know about
  • We get to meet a lot of interesting people active in these areas
  • Personal satisfaction and sense of accomplishment in knowing we made a difference
  • To help people we don't know
  • It's a nice break from work
  • It's morally satisfying
  • You can get special perqs (like great seats at the Musical Theater performances, although we still pay for our tickets!)
  • You may get better medical care if you get sick
  • Because it is better to give, than to receive
  • Because there are people who can make more productive use of the money than we can
  • Because a win-win outcome where we win and the world wins is always better than a we win/you get nothing outcome
  • Because people who we admire, and people who are smarter than me do it; so if I'm not doing it too, what do they know that we don't know?
  • Because it is more efficient since the cause needs to spend less/time energy fundraising
  • Because we get nice fanmail, so lots of other people think this is the right thing to do (that's not a reason, but a validation)
  • Because we get a finer level of control over where the money goes; ideally, steering funds towards the most worthwhile projects
  • Because when we read "A Christmas Carol," we both thought that Ebenezer Scrooge made the right move at the end
  • Because we know it must be very satisfying: we know of lots of people who later become philanthropists, but we don't know of any philanthropists who quit giving
  • To set an example for our kids, who we hope will do an even better job of this than we have
  • Because even Larry Ellison, who has never been cited for his philanthropy as far as I know, gives large sums to causes he believes in that will benefit himself and others. Through a foundation he set up, Ellison quietly donates about $20M a year into basic research on aging, according to an article in the Oct 11, 1999 issue of Fortune. We can surmise that Larry basically has correctly figured out that, like King Tut, he's not going to live forever without this type of research and that it makes sense to donate money now, while there is still time to make a difference in his life. After all, it's better to live longer (or at least healthier) and be only worth $24 billion than to be worth $25 billion and live a shorter or less healthy life. That other people will benefit from this research may not be foremost in Larry's mind. I don't know. He's never replied to any e-mail I've ever sent him. I'm not trying to pick on Larry here. The point is that giving to benefit "people you care about" is really the best reason for giving that we all can relate to, no matter who we are. Even for Larry.
  • Because we just barely made the list of the 100 wealthiest people in high tech this year and we probably won't make the list next year. Rather than suffer a bruised ego about it, we picked an area where there is little to no competition that we can be in the top 10. You can do it too.

In summary, the main overriding reason we donate to make a positive impact in our lives, and the lives of people we care about. So our giving is pragmatic, in that sense. We do not really donate from a sense of "obligation" or "because it is the right thing to do" because there is much less of a goal or purpose if that is what is motivating you.

Mike Milken told Forbes, "My life has a new passion. I want to fight this disease. Wealth is a very good thing, but it's good mostly because it allows one to follow one's passion and promote change."  Exactly! And the earlier you can make that contribution, the more impact it will have.

Convinced by the list? Want to get started? Here's how.

Excuses for not donating

I had a nice e-mail exchange recently with someone who is interested in philanthropy, and certainly had some excess capital to that he could have easily parted with to have established an endowment fund. In fact, at one point was almost a billionaire! He was under some false impressions that kept him from doing this. Here is the e-mail exchange we had. Don't make the same mistake he did. He certainly regrets it.

Evaluation criteria

There is no "right way" to give. Some people associate themselves primarly with a single cause or with a few causes. That has the advantage that you can really understand what and who you are giving to. Others donate to a variety of causes. This has the advantage that you can make an impact in more areas, but not as much in any single area. We're in the latter category.

Here are the criteria we use now to evaluate grants. Right now, there are 20 different parameters we look at in judging a grant.

The scoring is somewhat ad hoc; you just add up the value of each parameter. I hope to "fine tune" this algorithm in the future, both in adjusting score values as well as making the calculation a bit more sophisticated than a simple sum (for example, multiplying reach by impact is more logical than adding these values). But to first order, it works.

Calculating your score
So for example, if we are considering a grant to the Tech Museum in San Jose, it would get 3 points on scope (local, education, technology), 2 on Fundamental, 4 on Reach, 1 on Impact, 3 on Quality of People, etc. So the final score would be these individual scores all added together.

To simplify the process, we've created an Excel spreadsheet template you can fill out.

Determining if you get funded
The higher the score, the more likely we are to fund the effort (subject of course to availability of funds). Note that most of our annual giving is "pre-allocated" to causes we've given to in the past, so new grants either fill holes created as we increase the size of the fund, or displace an existing cause (if the point score is higher). If your cause scores 60 or higher and is on the list of open areas listed below, please let us know.

Parameter Variable
name		 Value
Scope S 1 point for each area impacted from the following list:
  • Education
  • Environment
  • Technology
  • Local community
  • Medicine
Fundamental F
  • 0=treating the symptom (e.g., funding a glucose monitor for diabetics)
  • 2=not applicable (e.g., Musical Theater of San Jose)
  • 4=efficient diagnosis/treatment, just short of a cure (e.g., Targesome)
  • 5=treating the cause (e.g., funding research on the cause of diabetes)
Reach over 1 year RE
  • 1=less than 1,000 people
  • 2=1K to 10K people
  • 3=10K and 100K people
  • 4=100K to 1M people
  • 5=1M to 10M people
  • 7=over 10M people
  • 10=everyone in the whole world (e.g., NEOS identification, ozone layer reversal) or in a class (e.g., species extinction)
Impact IM
  • 1=entertainment or enjoyment or education
  • 2=improves quality of life
  • 3=substantial impact on quality of life (e.g., diabetes cure or macular degeneration cure)
  • 5=major impact on quality of life (e.g., cure for ALS or Muscular Dystrophy or Parkinson's; telomerase research)
  • 9=high potential to save life (e.g., ES cell research)
  • 10=saves life (e.g., cancer diagnostics/therapeutics or NEOS identification)
Quality of people QPE
  • 1=good
  • 2=excellent; people involved have a history of effective research that has made an impact on the field
  • 3=world class people are actively associated with this effort
Quality of plan (objectives) QPL
  • 1=good
  • 2=excellent
  • 5=outstanding; will attract world attention if successful execution (note that the probability of success is an orthogonal measurement; so an outstanding approach may have a 10% chance of success)
Funding impact FU Funding impact is based on the individual situation, not the field in general. So while one researcher in diabetes may be over funded, another promising approach to the problem by another researcher may be underfunded.
  • 1=already adequately funded, but more funds can still make a difference
  • 2=partially funded, but important additional people/projects need funding
  • 4=not yet funded at all (e.g., human ES cell research projects)
Funding availability FA This applies to the field itself, not the particular instance.
  • 1=lots of donors available for funding this type of project and/or our contribution to this project will not make a big difference in the end result (e.g., AIDS, cancer research)
  • 3=few donors available for funding this area and/or our contribution can have a big impact on the end result and/or funding could take a long time (e.g., medical startup companies such as Targesome, FSHD, public library)
  • 5=virtually no donors available and/or our contribution is critical to the project (e.g., asteroid identification; Human ES Stem cell research; brain transplants; ZEVs in carpool lanes; teaching interpersonal skills at MIT)
Time urgency T
  • 0=no time urgency; could be funded anytime, but the sooner, the better
  • 3=extreme time urgency; critical date must be met to be successful, or people are dying
Personal affinity P
  • 1=affects people we don't know
  • 2=affects people we've met
  • 5=affects people who work at Infoseek
  • 6=affects our friends
  • 10=affects our extended family (parents, cousins, etc.)
  • 20=impacts or affects or will be used by (or there is at least a reasonable argument that it may affect) our immediate family (myself, wife and kids)
Righteous RI
  • 0=no righteous impact
  • 4=fixes something that is "broken" (e.g., California requiring ZEVs, but doing nothing to help demand for ZEVs like allowing them in the HOV lanes is really stupid; Congress banning research on human ES cells is really stupid since this can save lives or vision, e.g., John Hopkins University has to fund this research using its own private funds
Innovative IN
  • 0=straightforward activities (e.g., lobbying getting laws changed, supporting the arts in San Jose)
  • 1=innovative twists (e.g., some portions of the approach are unique and/or patentable)
  • 4=unique promising approach (e.g., no one else is approaching the problem this way)
Past results RES
  • 0=no past history
  • 3=promising results (e.g., animal studies look very encouraging)
  • 4=a history of repeated success (e.g., Tech Museum)
  • 5=breakthrough results already (e.g., Targesome was first company to be able to image cancer via nuclear imaging)
Probability of success PR
  • 0=less than 1% chance of success
  • 1=1% to 10% chance
  • 2=10% to 50% chance
  • 3=50 to 90%
  • 4=90 to 99%
  • 5=Slam dunk
Sustainability SU
  • 0=requires continual funding
  • 1=eventually partially self-sustaining because it generates it own revenues (e.g., Tech Museum)
  • 2=eventually completely self-sustaining after initial funding (e.g., Targesome)
Control over use of funds C
  • 0=indirect grant where the end recipients are not known at the time of the grant (e.g., funding NRDC)
  • 1=direct grant (e.g., funding a specific person or set of people or very specific purpose)
Personal Involvement I
  • 0=passive grant where money is the only value provided
  • 2=we have chosen to be somewhat involved in helping (less than a few hours a year)
  • 3=we have chosen to be actively involved in helping the project, such as being on the board, chairing committees, etc. and our involvement can be beneficial to the cause
Source SO
  • 0=charity contacted us
  • 2=we discovered the charity through our own research
Locality L
  • 0=people working on this are located outside of California
  • 4=people are located in California, but more than 1 hour drive
  • 6=people are located within an hour drive of where I live
Credibility CR
  • 0=not funded by a well known source
  • 3=people have grants from credible sources, but not for this project
  • 6=this project is partially funded by a very credible source, e.g., government or well known charity

Did we leave anything out? Have any suggestions for a formula other than a straight sum? Do the score values seem reasonable? Please let us know.

Giving history

Past large grants in 1998 include:

  • $2.5M MIT
  • $2M Targesome Corp (Cancer research)
  • $500K Tech Museum
  • $200K Santa Clara county libraries for Internet terminals (largest gift in their history)
  • $100K Silicon Valley Arts Fund
  • $100K restart of Technology Review magazine at MIT
  • $100K American Musical Theater of San Jose (largest gift in their history)
  • $100K Jon Postel Chair at UCLA

A case history

By a long shot, my most exciting grant was the $2M that I invested in Targesome which appears to be a silver bullet in the effort to find a cancer cure. They scored a 79 out of a possible 96 points. For details, see the Targesome $2M grant.

Philosophy on giving: people vs. project vs. commecial venture

This section applies to our large medical charitable grants.

Most people give to big charitable foundations like the American Cancer Society, for example.

These big foundations screen grant applications and award grants for research and treatment programs. They typically do not identify promising researchers, and allow them to use their judgement on where to best apply the funds.

When funding medical research, we do things differently, and I think more effectively. Time will tell.

We basically figure out what the end result we'd like to achieve, then find someone to make it happen. Here's the  process

  • First we identify the cause, e.g., a disease we'd like to find a cure for.
  • Next we identify prominent individuals in the field and look at the projects that they are working on now, and have worked on in the past, and how they are approaching the problems.
  • If we like what we see, we will ask the scientist to propose and commit to specific deliverables within a 1 to 3 year time horizon. The more aggressive the deliverables and the higher our belief that the deliverables can be accomplished (relative to other scientists in the same area), the greater the likelihood of funding. While we believe that truly world-class scientists don't need to be pushed any harder with sets of specific goals and milestones--they just need to be enabled, having a set of deliverables provides us with an objective framework in which to evaluate our grants.
  • We will fund the individual with an unrestricted grant that they can depend on year after year, subject to our satisifaction with the progress that has been achieved. This means we can arbitrarily choose not to renew the grant at the end of the year. And we are flexible about the objectives. So if you commit to curing cancer and you end up curing AIDS instead, that's just fine with us.
  • The funds can be used for any purpose that furthers the objectives; build a building, hire a postdoc, buying some equipment. We don't have the time or experience to determine which specific projects will be the most successful. So it makes no sense for us to fund specific projects. Instead, we fund specific people with specific objectives.

Almost always, the individual is working for a university research lab. In one instance, the basic research had already been done, and the challenge was to bring the technology to the market and it appeared the most expedient way to do that was to start a company. See the Targesome $2M grant for more information. So far, it's our only "commercial" donation.

List of areas we will be funding in 1999

All the recipients below will get a minimum of $50K annually

Cancer cure

Recipient: Targesome

Neurology

Diseases: Stroke, MS, spinal cord injuries, Parkinson’s Disease, ALS, Alzheimer’s, macular degeneration, glaucoma, muscular dystrophy

Recipient: Ben Barres

Eye

Diseases: age-related macular degeneration (ARMD), retinitus pigmentosa

Recipient: Mark S. Blumenkranz, M.D., clinical professor of ophthalmology, co-director of the Retina Service and Chief of Ophthalmology, Stanford Health Services

Diabetes

Diseases: Type I diabetes

Recipient: Lois Jovanovic

NEOS identification

Reason: Cheap collision insurance for planet earth. The only donation we are giving that might save the whole world.

Recipient: Jim Scotti and the Spacewatch program funded by the University of Arizona Foundation

Teaching students at MIT interpersonal skills

Reason: Universities need to do a better job helping students develop their interpersonal skills. The earlier poor behaviors are identified, the easier it is to correct them.

Recipient: Rosalind Williams

Community Foundation of Silicon Valley

Reason: There are a large number of worthy local community projects that I don't have the time to personally identify and prioritize. That's why the community foundation exists.

American Musical Theater of San Jose

Reason: My wife and I enjoy supporting a specific local arts organization where we also enjoy the productions.

List of areas where we are looking to fund a project/person/organization

Please see our List of Available Projects

 

Links
Kirsch home page
Kirsch charitable giving home page
How to Apply for Funding
List of Available Projects
Should you have a private foundation?
Fanmail
Targesome donation page

Charity projects submitted to us to consider