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Making Effective Giving Everyone’s Business

By • Oct 14th, 2008 • Category: Roger Hamilton's WOW

The link between effective giving and effective receiving is a link that has been understood by Wealth Creators throughout history. In 1980, Li Ka-shing established the Li Ka Shing Foundation to promote ‘a culture of giving’ in Hong Kong society. Since 1980, the Foundation has given HK$7.7 billion to education and health care projects. Having come from a poor family and gone on to become the richest man in Hong Kong, he wanted to spread the word of the power of effective giving, yet he chose to spread this word in a quiet way, with many people in Asia still not aware of his largesse and philosophy.

“I know what I’m having ‘em put on my tombstone: ‘I have nothing more to say’”
– Ted Turner

Ted Turner Turns Heads

Ted Turner, on the other hand, as the founder of CNN, chose the power of the media to magnify his message. In 1998, he announced a pledge of $1 billion to the United Nations to support world peace and progress. He made his announcement at a press conference to the world media. Since the announcement, the United Nations Foundation (UNF), set up as a result of his pledge, has attracted over $400 million in donations in addition to his ten year, billion dollar pledge, and has already donated $900 million to UN projects in 115 countries.

Turner’s landmark announcement has led to a new era of effective giving, where Wealth Creators have realised that their words can be worth far more than their money alone. The publicity the UN has received since 1998 through the UNF and the UNF’s Better World campaign initiative has led to renewed support from
the public, stronger partnerships and better PR. Today, the UN’s Millennium Declaration is better known to the general public than any other UN initiative in history.

Profiles Leverage Their Profile

In 1998, while Turner was announcing his UN pledge, Oprah Winfrey was setting up Oprah’s Angel Network. Saying to her audience, “You get from the world what you give to the world,” her charity encouraged others to use their lives to help others in need. Over the years, Oprah has given an estimated $250 million to  charity, leveraging on her celebrity status to raise far more through her audiences for causes including AIDS, poverty relief in Africa, education and child protection.

In 1991, long before she became a billionaire, Oprah testified before the US Senate Judiciary Committee on the need to set up a national database of convicted child abusers, as part of the National Child Protection Act. In December 1993, President Clinton signed the “Oprah Bill” into law.

While political leaders build their legacies from within public office, Wealth Creators such as Arnold Schwarzenegger and George Soros, like Oprah, are creating their legacies alongside the policy
makers. Long before becoming the Governor of California, in 1979 Schwarzenegger was part of the coaching team for the Special Olympics. The first Special Olympics for disabled sportspeople was set up by Schwarzenegger’s mother-in-law, Eunice Kennedy Schriver, in 1968. Since his first involvement, Schwarzenegger has become a familiar face supporting the Special Olympics, which now has programmes in 150 countries.

All-Star Power

In America, Schwarzenegger’s first political appointment was on the President’s Council on Physical Fitness and Sports, from 1990 to 1993. During that time, he co-founded the After-School All-Stars, which gives school children after-school sports, life skills and academic support. Today, Schwarzenegger is honorary chair of the programme, which has been supported by the likes of Tiger Woods, Muhammad Ali, Andre Agassi and Shaquille O’Neal. While he is better known for his films, in the realm of making sports and
fitness more accessible, Schwarzenegger has been one of the most influential figures in America over the last fifteen years.

Within an entirely different domain, long before he had built his fortune, George Soros was funding the cause of democracy. In 1979 he funded black students to Cape Town University in apartheid South Africa. In the 1980’s he funded Eastern European dissidents in Poland and Czechoslovakia. By 1984, Soros had set up the Soros Foundation in Hungary, and now the Foundation funds institutions in 50 countries that promote open societies, with $400 million spent annually on education, public health and civil society development.

Soros has invested an estimated $4 billion of his fortune in his philanthropic work, and all of his
time. In 1993, Soros launched the Open Society Institute, to promote open societies by working alongside governments around the world. Soon afterwards, Soros handed over the day-to-day operations of his Quantum Fund, and now travels the world as Chairman of the Open Society Institute, influencing the governments and institutions around the world to support greater democracy and tolerance.

Roddick’s Body Shop

Anita Roddick, founder of the Body Shop, worked for the United Nations before launching her natural cosmetics chain in 1976. The Body Shop became synonymous with environmental and social activism.

Over time, Roddick’s campaigning on environmental and social issues departed from the work of the Body Shop. Like Soros, she dedicated herself completely to her cause, saying, “The most exciting part of my life is now — I believe the older you get, the more radical you become. There’s a Dorothy Sayers quote I love, ‘A
woman in advancing old age is unstoppable by any earthly force.’”

Are You Keeping Good Company?

While Wealth Creators such as Bill Gates, George Soros and Dame Anita Roddick have followed in the path of Carnegie and Rockefeller, by dedicating the second part of their lives entirely to giving back, other Wealth Creators are using their companies as the vehicles to create flow and contribute flow.

In 1974 Ray Kroc set up his first ‘Ronald McDonald House’ that is a ‘home’ linked to hospitals for families to stay in while their children are in hospital. Each house raises funds from McDonald’s customers at the fast food restaurants. By 2006, 270 homes had been opened in 30 countries, providing 6,000 rooms each night. The charity, now run by 30,000 volunteers, has raised over $400 million and helped over 10 million families.

In 1987, while he was stretching his bank credit, Richard Branson set up the Virgin Healthcare Foundation together with Anita Roddick and Michael Grade. The foundation has lobbied for the campaign Parents Against Tobacco, which raised over £100 million to restrict tobacco advertising in sport. While each Virgin company is run separately, in 2004 Branson launched Virgin Unite, with the plan to connect all the Virgin companies, partners, suppliers and customers with the ‘best of the best’ social entrepreneurial groups and charities: a ‘social dating agency’ identifying the most effective ways to make a difference. In 2006, at the second Clinton Global Initiative, Branson pledged to give 100 percent of the profits of Virgin Atlantic and Virgin Trains over the next ten years to fund renewal fuels technology.

Business Owners Give Back

Sam Walton’s Wal-Mart Foundation gave $197 million in 2005 to support over 100,000 local charities. This came from company and customer donations and mobilised 800,000 volunteer hours of support for projects in areas where a Wal-Mart store operated. The Wal-Mart Foundation is separate from the billion-dollar Walton Family Foundation, set up by Sam Walton and his wife Helen, which gives out over $100 million in grants for progressing education each year.

In 2004, Sergey Brin and Larry Page committed one percent of Google profits and equity to the Google Foundation. The Foundation supports organisations from the Make-a-Wish Foundation to Doctors Without Borders, funding initiatives to reduce inequity and end poverty. By linking the income of the Foundation to the profits of Google, the founders are linking their living legacy with a lasting legacy. When making their announcement, Brin and Page said, “We hope that someday this institution will eclipse Google itself in overall world impact by ambitiously applying innovation and significant resources to the largest of the world’s problems.”

More Today Than Ever Before

There are more billion-dollar charity funds set up by entrepreneurs in existence today than ever existed before. Yet it is not personal wealth that leaves the greatest legacies. It is the power to unlock flow. In December 2005, Time featured Bill and Melinda Gates, and Bono, as the joint Time Persons of the Year.

The way in which Bono and the Gates Foundation have contributed to reducing global inequity could not be more different, but each has leveraged on their own personal flow to unlock global flow in their own way. In 1984, six years after U2 was formed, Bono took part in Live Aid, organised by Bob Geldof to raise awareness
of poverty in Africa. By 2002, Bono had set up his own organisation DATA (Debt, Aids, Trade in Africa) with funding from Bill Gates and George Soros.

Applying Passion & Talent

DATA was set up to hold Western governments accountable for the pledges they had made as part of the 2002 United Nations Millennium Declaration to halve extreme global poverty by 2015 and eradicate it completely by 2025. In 2005, Bono took a leading role in the Make Poverty History campaign, convincing Bob Geldof to back a series of Live 8 concerts prior to the July G8 Summit in Scotland.

Without any billion-dollar fund, Bono applied his passion and talents — campaigning throughout U2’s Vertigo tour that took them across America and Europe. By the end of 2005, Western governments through the combined efforts of discussion, campaigning and public pressure, committed an extra $48 billion a
year in aid to developing countries by 2010, and proposed cancelling up to $55 billion in Third World debt.

“The ones who are crazy enough to think that they can change the world, are the ones who do.” – Steve Jobs

While the work to ensure these changes has only just begun, Bono has demonstrated that it does not take billions — or even millions — of dollars of flow to begin unlocking hundreds of billions of dollars of flow. It takes collective momentum towards a worthy cause.

Effective Giving through Social Enterprise

Bono generated momentum by getting his audience to join the ONE campaign from their mobile phones during his Vertigo tour. Other entrepreneurs have leveraged in other ways to magnify and multiply
the effects they can achieve — through other entrepreneurs. Paul Newman, having already become one of America’s leading social entrepreneurs with Newman’s Own, set up the Committee to Encourage Corporate Philanthropy in 1999, appealing for greater corporate giving by America’s largest companies and playing a part in the doubling of corporate giving to $7 billion by 2005.

Jeff Skoll, the first president of eBay and its second largest shareholder, championed the launch of the eBay Foundation, and then went on to support social entrepreneurs. In 2003 he launched the Centre for Social Entrepreneurship at Oxford University, defining a social entrepreneur as ‘Society’s Change Agent — A  pioneer of innovations that benefit humanity’. The Skoll Foundation, launched with $250 million of Skoll’s eBay stock, supports social entrepreneurs through its awards programme and online network,  socialedge.org. eBay founder, Pierre Omidyar, followed a similar route. With his eBay shares currently worth $8 billion, Omidyar left eBay and dedicated himself to giving his money back in the most effective way he could. He set up the Omidyar Network in 2004, with a $400 million fund to invest in social enterprises and promote ‘individual empowerment on a global scale’.

After leaving AOL Time Warner in 2005, Steve Case dedicated himself to his Case Foundation, which he started in 1997. With the aim of fostering entrepreneurship in non-profit organisations Case joins a growing group of Wealth Creators, that includes Gates, Newman, Branson, Skoll and Omidyar, who are applying their
expertise to increase wealth contribution through themselves and more importantly through the support and education of others.

From Passion to Purpose

Choosing a cause is not necessarily about ‘changing the world’. Many of the Wealth Creators I’ve mentioned in my book Your Life Your Legacy have focussed on just one cause that would create a lasting legacy in its own way. Ingvar Kamrad, whose Stichting INGKA Foundation owns the IKEA Group and has assets of $36 billion, is supporting the mapping of the world’s forests through Global Forest Watch, and forest preservation through WWF.

Paul Allen, who launched his foundation in 1986, has given $815 million of his fortune to the advancement of education, science and technology. The foundation funds projects such as the Allen Institute for Brain Studies, which is attempting to create a groundbreaking brain atlas. Allen has also funded the future of public space travel, combining the technology of his ‘SpaceShipOne’ orbital transporter with Richard Branson’s Virgin Galactic space travel company in 2004.

Some projects are even more specific. Walt Disney focussed on funding the California Institute of the Arts (CalArts). Henry Kravis focussed on causes in New York. Peter Lynch focusses on causes in Boston. Some projects are annual awards to encourage the recognition of others, from John Templeton’s annual Templeton Prize, worth $1.4 million, to the Walton’s Teacher-of-the-Year Award, which has recognised over 26,000 school teachers.

A Family Affair

Martha Stewart, Donald Trump and Amitabh Bachchan have all used their media exposure to promote charitable giving, and many of our Wealth Creators from Gates to Buffett to Ford, to Getty, Edison, Jobs
and Walton have seen their giving as a family affair, their contribution as a shared activity with those closest to them.

Even before his July 2006 announcement, Buffett already had four $100 million foundations that were run by his family. Each of these will continue to receive part of his fortune: the Susan Thompson Buffett Foundation, named after his wife who died in 2004, focusses on health and family planning; the Susan A Buffett Foundation, chaired by his 52-year-old daughter, funds education; the Howard G Buffett Foundation, chaired by his 51-year-old son, funds nature conservation projects; and the NoVo Foundation, run by his 48-yearold son, Peter, seeks to reverse environmental degradation and uphold human rights. Wealth Creators soon realise that effective giving does not just bind communities; it binds families.

Roger Hamilton is Chairman of XL Results Foundation. This article is an extract of Roger Hamilton’s book, Your Life, Your Legacy. Learn more about Wealth Dynamics and take the test at: www.wealthdynamics.org

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