How to spend a billion dollars on charity
More than 20 years ago the Barenaked Ladies released ‘If I had a Million Dollars’, describing how they’d spend their fortune- including buying a house, furniture, cars, fur coat, exotic pet, fancy ketchup, art, and even your love.
In 2010, 40 of the richest billionaires decided rather than spending all on themselves, they’d donate it to charity. This commitment is now shared by more than 120 billionaires in the Giving Pledge.
So how do you spend a billion dollars on charity?
Some may make donations to different charities that have touched their lives but others may take a more strategic approach- focusing on impact.
This approach to giving emphasizes an investment in an area that you’d like to see change (eg. poverty, AIDS, education). But the distinction between a donation and an investment is the return. Traditional thinking about donations is you hope the money will make a difference, but you don’t expect anything back (other than a tax receipt). When you approach giving as an investment, you focus on the return on that investment and in this case- its social or environmental impact (and in many cases its alongside a financial return).
Bill Gates- through the Bill and Melinda Gates Foundation– has spent $32.9 billion in grants since 2000. But their Foundation’s approach to giving is strategic and focused on impact. Take for example how they explain their approach to grant making isn’t merely how we donate, it’s “how we make investments”. And key to an investment, is the focus on measurement and return which the Foundation prides itself on.
Similarly, Canadian billionaire Jeffrey Skoll- of eBay fame- believes in impact investing. Skoll has launched a global foundation in his name and created a media company that produces films about social causes such as Inconvenient Truth and Fast Food Nation. He has also invested in initiatives from water pumps for African farmers to help irrigate their crops to arts-education centers for at-risk Americans. The Skoll Foundation creates change by investing in social entrepreneurs- those that use business to tackle social problems.
While most of us won’t be faced with the question of how to spend a billion dollars, the same principles can be applied when we think about how and where to donate/invest. Whether it’s planning your annual holiday donation or your entire net worth- as Dan Pallotta, a nonprofit advocate, says “don’t ask if a charity has low overhead. Ask if it has big impact.”
Want more curated content delivered straight to your inbox?
Follow us on twitter @b_meaningful and like us on Facebook
Photo credit: 401K