Demand Accountability in Contributions

Asked by journalist Matthew Bishop if he’d someday like to be on a SpaceX ship to Mars, the founder of SpaceX, a 40 year-old Elon Musk, replied, “I’d like to go to Mars. Absolutely. I think it would be great to be born on Earth and die on Mars. Just, hopefully, not at the point of impact.”
     Mr. Musk wants to have a lifetime impact, however, through philanthropy. Mr. Bishop’s interview of Mr. Musk occurred at a Giving Pledge meeting which also included Warren Buffett, Bill and Melinda Gates, Ted Turner, Steve and Jean Case, and Pierre Omidyar. Mr. Buffett reported there that 81 people had so far signed the Giving Pledge, promising to donate at least half their wealth.
     With conditions. According to an article about the meeting in The Economist, those conditions are that there be accountability for how the money is used. A hot topic at the gathering was something Mr. Case called “impact investing,” to refer to philanthropy which does good while making profits. A more general theme was to emphasize the difference a donation truly makes over how much is donated. A more specific theme was the value of private-public partnerships in making a difference.
     I expect that few small to midsize retailers are in a financial position to be invited to the next Giving Pledge confab and asked to learn about contributing half their wealth. Still, I also expect you will be in a position to contribute to your community and beyond. So please think about impact investing. How can your contributions make the most profitable difference? How will you know what difference they’ve made and how profitable that difference is?
      Demand accountability from the programs to which you make contributions. Ask, “In what ways is it working, and how well is it working in each of those ways?” The answers to these questions are more fruitful than the answer to, “Is it working?” That question is too simplistic. The answers to the more complex questions give you an understanding of the “why,” not just the “what.” This allows for the perpetuation and improvement of programs. The spirit of impact investing is sustainability. By making a positive difference in easily identifiable ways, funded programs can persevere.
     All this is more likely when your contributions are to specific programs as proposed by the nonprofits rather than to organizations for use however they choose.

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