Steven McCormick: Philanthropy Needs Entrepreneurial Zeal

I continue to believe very, very unequivocally that the not for profit sector, and I would say even more so, the philanthropic sector, is in a position to drive major social change, more so than any other sector in society. But I don't see it stepping up to that just yet. Now, why do I say it can and why do I say that it's not yet it can? Now I'm going to talk about the foundation community. Our foundation has $6 billion in assets. By law, we are required to give out 5% of our asset wealth. Every year we can give more, but by law, we're required to give out at least 5%. So that's Stanford students. 5% of 6 billion is $300 million every year. So we turn a spigot on every year and $300 million comes gushing out. And we can do anything we want with that, as long as it's devoted to a philanthropic enterprise. Unbelievable. And we could burn it. And next year I turn that spigot on and another $300 million comes out. So I think, wow, if that's the case, if I could burn that and I still have $300 million, and if I want legally, I could go into the $6 billion and use that, why don't we shoot for the moon? Only a foundation, or only, I'll say private charity, has the wherewithal and actually the legal ability to think about lasting forever. So we're set up in perpetuity. I mean, maybe the Catholic Church is the only other. It's like they can think in perpetuity. So you think, wow, that's incredible. We can last in perpetuity. We could live forever. With $300 million coming out in today's valuation every year to do something great, why wouldn't we reach for the stars? Interestingly, and I would say quite candidly, I think foundations are among the most conservative actors in society. Why is that? I would assert because frankly, not enough people with entrepreneurial zeal, a passion for moving fast, for experimentation, for rapid prototyping, for taking risks and being willing to learn from it. Not enough of those kind of people are going to work for foundations. It would be a huge, contributory contribution to society if all of you with your entrepreneurial backgrounds went to work. Foundation, you could change the world. And I don't mean to cast aspersion on the people who work in foundations, but typically foundations have hired people from academia or from NGOs, wonderful people. The people who work at our foundation are fantastic people. Our foundation was built on Gordon Moore's belief that philanthropy should have a strong business orientation to it, meaning keep your eye on the ball, take risks. He build intel, reach for the fences. That's Gordon's phrase, reach for the fences. We're the biggest funder of environmental conservation, which is why I came to the foundation, which is why I knew the foundation biggest funder of environmental conservation. Gordon said at the inception of the foundation he wants to win in the environment rather than lose slowly. I love that. So here's an extraordinarily generous man comes out of a business background, says, okay, I want to do philanthropy, but I want it to be imbued with the best principles of an entrepreneurial enterprise. And in that combination would be, I believe, the key to solving or at least addressing major social problems. Because I also think that today's social problems, you don't solve them. They're so complex, we're going to manage them.