Visionary acceptance speech

June 6, 2000

Software Development Forum

(words in italics were omitted from the actual speech for time and impact reasons)

This is a great honor.

I'd like to take a few minutes to share with you why I think philanthropy is important.

Slightly more than a year ago, the United Way of Santa Clara County announced an $11M shortfall. This was the biggest charitable emergency situation in the 20 years I’ve lived here. Yet only 15 families gave more than $1,000 to the Emergency Response Fund that went directly to the 100 charities affected by the shortfall. And the largest donor doesn't even live in this state.

Only 3 families stepped up with donations of $1M or more to fill the gap: Steve and Michele Kirsch, Gordon and Betty Moore, and Bill and Melinda Gates. Neither the Moores or the Kirsches have made major gifts to United Way in the past. We gave because it was a community emergency. In our own community. Bill gave and he doesn’t even live here. And if expand the list to people who gave more than $50,000 in a time of need we add only one more name: Pitch Johnson. And even if we lower our threshold further to $1,000, we add less than a dozen families to that list of givers.

Community emergency. Front page headlines. Richest place on the planet. More wealth has been created here in the last few years than at any place in any time ever. Over 65,000 millionaires in Santa Clara County alone. Does anyone care anymore?

The rate of giving has not kept pace with the rate of wealth creation. I think we can do better than that. A lot better.

Many of you are, or soon will be, insanely wealthy. By that I mean you can buy a house here and still have some cash left over.

If you fit in that category, please consider investing some of your wealth now in your own charitable foundation. You can decide later what to spend it on.

I'd like to tell you about two Larrys I know.

- Larry #1: worth $2B at IPO. When I asked him to put 10% aside in a charitable fund, he said he didn’t have time do it because he was 100% focused on his business. Today his business is fine, but he’s worth a small fraction of that sum. He has no charitable fund and he's no longer a billionaire. He had an opportunity to endow a foundation with hundreds of millions of dollars and he could decide what causes to give that money to later. The 30 minutes he didn’t have was an opportunity cost worth hundreds of millions of dollars. How smart was that financial decision?

- Larry #2: Unlike Larry #1, he’s still a billionaire. Like Larry #1, he also spends 100% of his time focused on his business. But a few years ago, Larry #2 asked a prominent medical researcher to help him give away $100M over 5 years. So Larry #2 doesn’t spend anytime on charity, unless he wants to. And our Larry #2 is the world’s largest private medical funder in this particular field. The discoveries will improve the quality of Larry #2’s life as he grows older, as well as the lives of the rest of us. It’s smart giving because Larry has more than enough to live on, he doesn’t need to make any more money, but he knows that as he ages, things aren’t going to get better, so he applies his funds to research today that will make a difference in his life later on.

There are literally millions of terrific causes in need of your funds or your time. One person can make a difference that can impact the quality of your life, the life of your family, or your descendants.

Let me give you three examples of how you can apply your wealth to make a real difference:

Example #1: You might be able to cure a major disease. We made a $2M investment 2 years ago in a startup company working on a drug to cure cancer. They couldn’t get funding because venture capitalists were only funding Internet companies. The scientists we’re funding have made incredible progress and there is an excellent chance that they will succeed within 2 years. I told the company founders my objective, unlike that of typical venture capitalists, was to cure cancer, not return on investment. Would they have been funded without our help? Probably not. Too risky. But, unlike a venture capitalist, we can't lose on this charitable investment. If the company goes bust, we get a better tax deduction than if we donated the money. And if the company is successful, we'll make millions more that we get to donate.

I’m an Internet guy. But I may be partially responsible for helping save the lives of millions of cancer victims. We have a really good shot at it. And it only cost $2M. What a bargain. It may be our best investment ever.

Example #2: You might author some legislation we need. For example, we’ve been involved in getting bills passed to encourage the use of Zero Emission Vehicles. It cost us virtually nothing in cash, just in our time and a few trips to Sacramento and two meetings with Gov Davis. The reason this is important is that 90% of the people in California live in areas that violate both federal and state clean air guidelines. Well, it doesn’t take a rocket scientist to figure out how to fix this. 70% of the pollution comes from motor vehicles. So that’s where you start. And every ZEV we put on the road makes a difference because even considering power plant emissions they are 100 times cleaner than today's gas cars and hybrids. The more ZEVs, the cleaner the air. But if every single new car sold in California was a ZEV, you’d reduce the air pollution by only around 30% after 10 years. So it’s not a question of whether we need ZEVs; it’s a question of how many we need. But our lawmakers only required manufacturers to build these cars and provided little in the way of consumer incentives. What kind of thinking is that? Heck, I’m not a brilliant marketer, but even I can figure that one out. You need to subsidize the costs of these vehicles now and provide other incentives like use of the diamond lanes. It’s worked in Arizona. Demand there for ZEVs far outstrips supply. Our foundation authored the legislation in California to bring the cost of ZEVs to price parity with gas vehicles. Our foundation. Because we got tired of waiting for someone else to do something about this problem that affects my health, and the health of everyone in the state. And it will pass. Gov Davis told me he’d sign it, and it’s supported by the President of the Senate and the Speaker of the Assembly. Because I asked them to. Would this have happened anyway, if we hadn't been involved? Probably not. Look, I’m no politician. I hate politics. I’m just an Internet guy. But I drive a ZEV everyday. And so does my wife. We just want to help clean up the air.

Example #3: You could help fund the discovery of asteroids that could destroy most of the life on our planet. These so called "killer asteroids" don't happen that often...only about once every 50 million years or so. The last one hit a long time ago...about 65 million years ago and wiped out all the dinosaurs. That means were about 15 million years overdue for a big hit. I might happen tomorrow, next year, or in a million years from now. Without research, we'll have about 6 seconds notice before impact. With research, we'll find out in plenty of time to deflect it. Will this be funded without your help? Yes, we fund it, NASA funds it, and the Packard Foundation funds it. But the funding is not sufficient to guarantee that the task will be completed before we get hit. Your additional help in helping to fund this area might save the entire planet. For every dollar you give to this cause, you’ll save the lives of 100 people. No other cause has that kind of return on investment. Nothing comes close.

It’s statistically guaranteed, totally measurable, and totally quantifiable. Yet this cause is underfunded. It’s a huge opportunity. You can make a big difference here for every dollar you give. If we get hit, it's game over. No more Silicon Valley, no more Internet, no more politicians. They'll all be wiped out. Only the cockroaches and a few AOL disks will survive. And this time around, Disney and Spielberg won't be around to resurrect us.

The point here is that you too can make a difference outside of your domain of expertise. It’s not that hard. Heck, if I can do it, you can do it!!!

Some causes can involve a lot of your time. But you can also spend very little time and just give large sums to well established organizations in areas that interest you.

Setting up and running the foundation is also very easy if you use resources such as your local community foundation. They have all the people and infrastructure. Leave your name with Nancy Ragey. She's with the Community Foundation Silicon Valley. She’ll set up a meeting at your convenience, and explain how you can get started in 30 minutes.You need to decide only two things.

- the name of your foundation (you can change it at any time at no charge)

- the amount you want to put into it (you can increase at any time at no charge)

They’ll also tell you things like:

- how you can donate even though locked up (even on IPO)

- why you may not want to donate on IPO day even if that’s when the stock price peaks

- why supporting foundations are superior to private foundations on every single metric.

The nice part is you make ONE gift and then you get to give away part of the investment income for the rest of your life (and until the end of time) to causes you believe in.

There are no tax advantages to giving after you are dead. Nor is there any personal satisfaction.

What's more important is seeing the impact of your giving while you are still alive.

My step father died from cancer a year ago.

A friend who worked for me at my last two companies is dying of cancer. He’s 8 years younger than I am.

Another friend, Bob Packard of Alex Brown who took Infoseek public was diagnosed with ALS a few months ago. He now has a few months to live. He’s the same age I am.

I could be next. You could be next.

Looking back, my biggest regret is that I didn’t start my giving program earlier. If I had, maybe I would have made a difference in the lives of my friends and my family.

If you haven’t taken at least 10% of your net worth and put it into a charitable fund, I’d really encourage you to leave you name with Nancy today. The sooner you start a giving program, the sooner you’ll be able to make a difference in your lifetime in causes that are important to you.

You might also want to consider creating a corporate foundation by allocating 1% of your equity now, before you go public. Think of it as giving a stock option to your employees-at-large.

I have found that there are two basic types of givers: there are people who give and there are people who give excuses. Which list would you rather be on? A list of the richest people in Silicon Valley? Or the list of the most generous people in Silicon Valley?

Or you can think about it another way. If you view life as a competition, consider this: there’s a lot less competition to be on the list of the most generous. That creates a huge market opportunity for people who take advantage of the situation. You can take action now, while that market window is still open.

In summary,

Giving, and setting up a mechanism for giving, is quick and easy to do
You can make a difference even though you are just one individual - and with very limited time;
It's fun and rewarding

Charity is not an obligation; it’s an opportunity. The money you have accumulated gives you an opportunity to make a difference. But only if you make use of it. I urge you not to assume that someone else is going to solve our problems. I've tried it. It doesn't work. We are the leaders we have been waiting for. Pick a cause and make a difference. Today is a great day to get started.