Silicon Insider: Giving It Up for Good

March 19, 2002 -- If you wanted to change the world for the better, what would you do? What if you had a billion dollars to do it with?

These aren't idle fantasies — well, maybe for you and me — but there are a growing number of high-tech tycoons out there with the wealth, the maturity and the inclination to create some of the biggest charities in the world.

You probably already know about Hewlett and Packard and Gates, each justly celebrated for their considerable contributions. But there are a number of new philanthropists as well — Gordon Moore, Pierre Omidyar, Andy Grove, and others — that rival their older counterparts (not to mention the Rockefellers, Gettys and MacArthurs) in sheer benevolence.

As it happens, I was recently asked to advise just such a foundation, a brand new one, on its giving philosophy. It has proven to be an interesting intellectual, philosophical and even ethical challenge.

Once you get past the initial greed-disguised-as-joke scenarios — i.e., the Mike Malone Ferrari Modena Fund — things get serious pretty fast. After all, it puts you in the rare position (once removed), given to only a rare few, to do something important for mankind.

It isn't long before you realize it all comes down to a series of binary decisions, and none of the choices are obvious.

Picking Your Battles

The biggest of these choices is this: Do you want to have an impact all at once, or over time?

The advantage to doing it all now is that the impact is immediate and tangible. You can see the effects of your work on people's lives.

And equally important, you can manage the process — and not leave it to your kids to screw up. (Think of reactionary old John D. MacArthur spinning in his grave watching his descendents awarding his genius prize exclusively to liberal writers).

But there are big disadvantages to this strategy, too. Solving immediate problems — as Gates is trying to do with AIDs in Africa — is hugely expensive.

And there is the problem of dispensing the money in the face of corrupt politicians, idiot bureaucrats and legions of con men. What's the good of doing good if it goes to the bad guys?

Finally, there is one big problem with this strategy: What if you are wrong? What if you give millions to fight global warming and the world isn't warming after all? Then you're the equivalent of some Victorian robber baron leaving all of his money to advance the ideals of Theosophy, or to support ether therapy or cultivating wood fairies.

Will Your Descendants Screw It Up?

OK, so instead you opt for long-term giving — you know, that perfectly kicked social pebble that turns into a distant cultural landslide. Or that Nobel-like fund that awards prizes or grants to worthy individuals ad infinitum.

The advantage of this strategy is that you can get a pretty big bang for your buck. Moreover, because the process is slow it is also more likely to be permanent — you know, the old chestnut about teaching a man to fish so he can feed himself forever.

It sounds great, but this also proves more complicated in practice. For one thing, there is the degenerate grandson rule, which is that no matter how noble your intentions, one of your descendents will screw it up.

And if you try to lock up the foundation with ironclad rules, the world will change and you're back in that same Theosophy/Fairies trap.

So then how about doing a Nobel. Sounds good, except back to judging the judges again (Sinclair Lewis and not Leo Tolstoy? Pearl Buck and not Virginia Woolf?) And you can also look forward in your old age to having one of your winners denounce you at the awards ceremony.

Also, a lot of people have gotten there before you. The world is full of eponymous prizes that no one has ever heard of, that have no cachet, and are awarded to armies of surprised people. The only hope here is to find a category no other foundation has thought of. Good luck.

Can You Predict the Future?

And what about that magic pebble, that single act that ripples and multiplies across history?Fine. Which one? The beach has a trillion pebbles and you need to find that single skimmer that will, properly thrown, skip across the pond of time.

The past isn't much help here. History has been turned by operas, comets, stirrups, novels, accidental poisonings, new sources of power, delusional maniacs, marriages, hemorrhoids, and mud. Care to put your money behind any of them?

Arguably, modern American life was defined by Marilyn Monroe, the Jetsons, the 1964 Ford Mustang, the Ramones' "Rocket to Russia" and the Intel 8080. Could any sane person have predicted that?

Finally, you can try the John Beresford Tipton technique — i.e., anonymously give a million bucks to deserving everyday folks — and watch it screw up their lives, just like on the old TV series.

Sort of takes all the fun out of philanthropy, don't it? In fact, the more you think about this charity business, the more it seems like the best solution is to just break the endowment into a pile of $100 bills, then go out on the street and hand them away to strangers.

Of course, if you did that, within seconds you'd be mobbed, robbed and killed.

Whew. This is going to be tough. I'm glad it's not my money. …

Michael S. Malone, once called “the Boswell of Silicon Valley,” is editor-at-large of Forbes ASAP magazine. His work as the nation’s first daily high-tech reporter at the San Jose Mercury-News sparked the writing of his critically acclaimed The Big Score: The Billion Dollar Story of Silicon Valley, which went on to become a public TV series. He has written several other highly praised business books and a novel about Silicon Valley, where he was raised. For more, go to Forbes.com. And you can talk back to Silicon Insider via e-mail.