Posts from hacking philanthropy

This is the fourth funding friday blog post in which I’ve suggested good causes to contribute to during this pandemic.

March 20th – restaurant workers

March 27th – health care protective gear

April 3rd – feeding people in need

Today, I would like to highlight The 1k project.

The 1K project was built by Alex from NYC, Minda from Seattle, and a group of over 20 volunteers consisting mostly of tech founders

This is an effort to pair people with means with individuals who have lost their jobs and need some help to get through to the other side. A supporter signs up to support one or more individuals who have recently been laid off and have been nominated by their former employer. The support is standardized at $1k per month for three months. I joined here. You can too.

If you decide to participate, you will be asked who referred you. Please say “Fred Wilson” and use this email address for me – [email protected]. That way they will be able to track the supporters who came via this blog post.

As we continue to make our way through this pandemic, I keep coming back to the question of how do we help those in the most need right now. Last week it was our health care responders on the front lines, the week before it was workers in the hospitality industry who are now out of work.

This week, I’m drawn to this huge GoFundMe campaign that Apple, Laurene Powell Jobs, and Leonardo DiCaprio launched yesterday to raise money for World Central Kitchen and Feeding America, two large charities who run food programs for the poor and dislocated.

When things go wrong, it is always those with the least who suffer the most. So I am helping this campaign get to its $15mm goal. If you want to join me, you can do so here.

This is a week full of philanthropy for The Gotham Gal and me. We are attending two fundraisers for organizations we support and throwing one for an organization we started.

I woke up thinking about giving back and how important it has become to us. Neither of us grew up in environments that were deep in philanthropy but somehow we were drawn to it in our thirties.

The Gotham Gal got involved in MOUSE when it was formed and became the Board Chair a few years later. That was where we learned that we could bring others into things that mattered to us and help make a difference on those things.

We also learned that we could create our own family foundation and contribute stock to it. We have been doing that for almost twenty years now.

That foundation has allowed us to support causes that speak to us and to start philanthropic organizations where we thought there was a need and nobody was filling it.

A big part of doing philanthropy is engaging others in it. Philanthropic organizations need financial support and that need is never-ending. And no matter how generous one can be, it is never enough. So finding ways to introduce causes you care about to others and then convincing them to support them becomes the thing.

At first, I didn’t like making the ask. Then I tolerated it. Only recently have I learned to enjoy it.

I ask readers to support things on AVC all the time. If there is a business model for AVC, that is it. And I appreciate all the generosity that this community has shown over the years.

I hope all of you appreciate and enjoy giving back as much as we do. It is an amazing thing to be able to help others.

First of all, I’d like to say that I have a number of connections to this project that I am highlighting today. The young women who are behind this project are the same ones I mentioned at the tail end of the talk I posted last saturday. I have been inspired by these young women and their teacher since I met them at the Annual CS Fair a few years ago. And in this project, they are “modeling our curriculum and teaching practices on NYC’s Computer Science initiative (CS4ALL)”, which is a project that I helped start and am leading the fundraising effort for. So this project is very close to home and heart for me.

OK, on to the project. This summer six young women will travel to Mendoza Argentina to teach coding curriculum to teachers and students in an effort to get computer science classes into the schools in Mendoza.

Here is a video that explains the project:

This morning I helped launch their GoFundMe campaign with a $5000 donation. Their goal is to raise $15,600 to fund their summer trip to Mendoza. Hopefully some members of the AVC community will join me in backing this project on GoFundMe and help them make this trip a reality.

I’ve been chairing a $40 million capital campaign for NYC’s CS4All effort to bring computer science education to every school and every student in the nation’s largest school district.

We are just into year four of the ten-year CS4All effort and we are also into year four of the capital campaign.

The good news is I can see the light at the end of the tunnel. Depending on whether you count “soft circles” or not, I think we have about $10 million left to raise.

We started out with a bang, announcing $11.5mm in contributions, including those of my wife and me, at the start of the effort.

Year one went well, with another roughly eight million raised.

Year two was a struggle and year three started out similarly. We made some changes to our team and strategy and message and the second half of year three was much better and we are entering year four with great momentum.

I have learned a lot about running a capital campaign or any sort of large and long fundraising effort and I thought I would share some of the big lessons:

1/ You have to be patient. It is a marathon, not a sprint. No matter how much you want it to go quickly, it won’t.

2/ Cultivation is the name of the game. You have to work the top prospects slowly and carefully and patiently. Most eventually come through but you need to invest a lot of time and effort without any certainty of closure. I found this particularly hard as I always want to be investing my time where it is going to pay off.

3/ You need people around you who are experienced fundraisers. There is an art AND a science to qualifying, presenting, and following up that the best people in the fundraising business understand and bring to their work. Without that, you are going to flounder.

4/ Communicating and engaging your donors is critical. I thought a donor would write one check and be done. It turns out many donors like to start small and grow their committment over time as they see progress and get comfortable with the effort.

It turns out that raising a big sum of money is like a lot of other things in business and life. Slow and steady is a virtue, great people make all of the difference, your best prospects are the people you have already closed, and frequent communication fixes a lot of problems.

I think all of these lessons I have learned in the last three years are applicable to raising capital for your business. Fundraising is a process not a campaign and it needs to be part of a CEO’s daily cadence and calendar.

You are never not raising money when you are running a company or any sort of business endeavor that requires capital, which is basically everything.

I am excited by the potential of cryptocurrencies and cryptogoods to change, and hopefully improve, the way we raise funds for charity.

Cryptogoods are particularly interesting as they are scarce and unique digital goods.

AVC community member Arnold Waldstein tipped me off to a really good example of this:

Little Honu (Hawaiian for turtle) is part kitten, part sea turtle. Honu is the first of a lineage of CryptoKittens ‘hatched’ to both raise funds and be ambassadors for their causes and to be bought, sold, and bred within the game itself.

Honu will be auctioned to raise funds for charity. The auction starts today, on Monday the 9^th, ends Sunday the 15^th.

Auction proceeds go directly to two sea turtle conservation projects in the Caribbean: Operation Jairo and Unite BVI.

Previous CryptoKitty charity auctions have raised in excess of $140K.  Donations are tax exempt for the winner if a US citizen.

This is part of a pilot for CryptoKitties, tied to their KittyVerse partner program and their Kitties-for-Good initiative.

CryptoKitties teamed up with Bill Tai and his ACTAI community of activists, athletes and investors, and Ocean Elders, a conservation group headed up by Sir Richard Branson, Jane Goodall and others to make this happen.

And Arnold is the quarterback of this initiative, creating and orchestrating a mashup of traditional, web, crypto and event-based grassroots marketing and partnerships.  It’s a first step in a broader project he is developing with Bill Tai to bring together incentivized communities through unique cryptoassets into a larger framework for non-profit projects everywhere.

I just bid on Honu and am currently the leading bidder, which I expect won’t last for long.

As I mentioned yesterday, GiveCrypto.org is a non-profit that allows anyone to make a charitable donation of cryptoassets and get a charitable tax deduction (in the US).

If you want to join me in doing that, you can do so here.

Yesterday, Brian Armstrong, the founder and CEO of our portfolio company Coinbase, announced the formation of a new non-profit called GiveCrypto.org.

Joanne and I are donating some of our Bitcoin to this charitable effort. Here is a list of the donors who have committed to give away some of their crypto assets to this effort.

So what is GiveCrypto.org all about?

Well it is basically an effort to take some of the crypto assets that folks like me bought a long time ago, that have appreciated a lot, and use them to address poverty around the world.

As Brian wrote in the announcement:

GiveCrypto.org is a nonprofit that will both hold and distribute crypto to those in need. It’s an evergreen structure, meaning it gives away less than the amount that the fund grows each year.

and

Cryptocurrency is unique in that it can be used to send small amounts of money anywhere in the world, in real-time directly to an individual in need — they just need a mobile device with an internet connection. With distribution of aid to foreign countries, high fees and corruption are unfortunately common; cryptocurrency is a way of circumventing both.

If you would like to learn more about this effort, you can do that here.

If you would like to give some of your crypto to this organization, you can do so here.

One of the best things about having highly appreciated publicly traded stock is that it is the most attractive way to make charitable gifts.

The Gotham Gal and I do this all of the time and I encourage others (founders, early employees, investors, angels, etc) to do it.

Here’s how it works:

Let’s say you have shares of Facebook that you got when you joined back in 2006.

Let’s say that your exercise price was $3/share and that is your cost basis.

Let’s say you want to make a $100,000 gift to a great cause that you are deeply involved with.

Instead of taking out your checkbook (who does that anymore?) and writing a $100,000 check, consider gifting some Facebook shares.

At $175/share, a $100,000 gift would be 571 shares.

So you ask the charity if you can gift shares. Almost every time I do that, the answer is yes. They give you a brokerage account that you can “DTC” the shares to.

And you instruct your brokerage firm to move the 571 shares to the charity’s brokerage account and you have made a $100,000 gift.

But, because you no longer have to pay the capital gains taxes on those shares when you sell them, and neither does the charity, you have a much more tax efficient gift.

I figure that a stock gift costs about 10-20% of the dollar value of the gift if you live in a high tax location like NYC.

Here is how I get to that math, using NYC tax rates:

$100,000 gift

less $50,000 for the tax benefit of the charitable gift deduction

less $38,000 for the capital gains taxes that do not have to be paid on the stock

equals $12,000

So if you have highly appreciated publicly traded stock and are interested in giving to good causes, consider gifting stock instead of cash.

It is a great way to be generous.