The Emerging Role of Entrepreneurial

Philanthropy

The Emerging Role of Entrepreneurial

Philanthropy

Steve KirschKirsch Foundation

AgendaAgenda

• About the Kirsch Foundation

• Kirsch Foundation programs

• Principles of entrepreneurial philanthropy

About Kirsch FoundationAbout Kirsch Foundation

• Supporting organization of local community foundation• $50M endowment• Gave out $8M last year, 135 grants• 6 full time staff people• Goals

-Ensure world safety-Cure all major diseases-Restore the environment-Reform politics-Reform education-Support the local community

Why give?Why give?

• “Enlightened self interest”- To benefit everyone (including ourselves)

• Results oriented- Grants are made to achieve goals, not pure ROI optimization (asteroids)

• Our motivation is not:- Noblesse oblige/“payback” or “proper”- Increased social status- Public recognition/image- Fun

Why give publicly?Why give publicly?

• Those who give anonymously because it proves they are altruistic are focusing on the wrong benefit

• There is no benefit to giving anonymously

• Two exceptions- A controversial cause that may cause more questions than answers,

Example: if I donate to gay rights, will people spend all their time wondering whether there is a hidden agenda?

- You are totally proactive in your giving, have no staff, and find that you are spending too much time responding to requests for money

Our enemiesOur enemies

• Mother nature (disease)

• US government- Seems to make decisions that result in fewer lives being saved

Abortion fundingStem cell funding

…

• BBC TV shows: The Weakest Link, …

Kirsch InvestigatorsKirsch Investigators

• Invest in people like HHMI

• Unique target: mid-career scientists

• $540K grants over 3 years (includes overhead)

• Individuals proposed by 10 institutions

• 8 member Scientific Advisory Board evaluates applications

Collaborative Funding Model (CFM)

Collaborative Funding Model (CFM)

• Example: Our partnership with Glaucoma Research Foundation (GRF)

• Based on success achieved in spinal cord research and Huntingdon’s Disease (our innovation is partnering with another foundation)

• Goal: Applicable to areas where progress has stalled (e.g., glaucoma) but where breakthroughs in other areas (e.g., neuroscience) may be applicable

• Narrow majority of people on panel and researchers are from outside the field

• 5 member panel picks 3-5 researchers who agree to work together and meet 2x/yr

• Min 3 year, min $1M grants

TargesomeTargesome

• Objective: diagnose and cure cancers as small as 1mm

• Approach: attach ligands or antibodies for angiogenisis to a large molecule along with In (imaging) or Yt (therapy)

• For-profit startup; $3.5M invested in equity

• Couldn’t get funding because VC’s were all investing in Internet startups

• Astonishing results in animals

• I sit on the board; I bring a sense of urgency

Key principlesKey principles

• Adopt best practices• Experiment• Encourage collaboration• Make a long term commitment• Expand your options• Be proactive• Bet on people• Be flexible• Capitalize on market opportunities• Get personally involved

Adopt best practicesAdopt best practices

• See what works best and copy it

• It’s so simple, but ignored so often, e.g., US education

• Examples:- KI program was inspired by HHMI- CFM program is an incremental improvement on existing successful programs

ExperimentExperiment

• Insanity is doing the same thing over and over and expecting different results

• Take risks/try a new approach

• Example:- CFM has collaboration both between foundations and researchers- Most of the people are from outside the field to bring a new perspective

Encourage collaborationEncourage collaboration

• Scientists tend to be “competitive” rather than “collaborative”

• Solution- Be careful choosing research groups- Interdisciplinary collaboration is much easier- Reward/require collaboration

• Example: - CFM fosters collaborations between foundations as well as between researchers

Make a long term commitment

Make a long term commitment

• Medical research doesn’t respect a 12 month cycle

• 3 to 5 years is a more practical timeframe

• Examples:- KI and CFM are both at least 3 year programs

Expand your optionsExpand your options

• Explore all options available• Example: Consider PRIs• PRIs are “have your cake and eat it too”,

especially for individual investors- Worst case: superior tax deduction- Best case: cure a disease AND make a lot of money to use for next disease

• Example:- Targesome wouldn’t have been funded if I hadn’t stepped up

Be proactiveBe proactive

• Set ambitious long-term goals

• Develop annual strategies and tactics

• Example:- Our goals and strategies are posted on our website- Staff pay is tied to achievement of goals

Bet on peopleBet on people

• If we were smarter than the people we fund, we’d fund ourselves

• Given that they are smarter than we are, why not trust them to do the right thing?

• Hold them accountable; if they don’t do what they said they would, they must renegotiate

• Example: - CFM, KI bet on people, not specific projects

Be flexibleBe flexible

• Don’t always play by your own rules

• Example:- United Way of Santa Clara County Emergency Fund

Capitalize on market opportunities

Capitalize on market opportunities

• Look for “funding gaps”

• Example:- Stem cell research- KI program focuses on mid-career researchers- Targesome got caught in the Internet bubble

Get personally involved Get personally involved

• It’s more than writing checks.

• Take a trip out to visit the people you fund

• Do some research yourself!

• Examples:- EV1 car- ZEV stickers- Education reform- Dan Case

SummarySummary

• Adopt best practices• Experiment• Encourage collaboration• Make a long term commitment• Expand your options• Be proactive• Bet on people• Be flexible• Capitalize on market opportunities• Get personally involved