What Would You Do With $70 Million?

This is the dilemma faced by Michael, a 31-year-old who will soon inherit a large sum of money.

For reasons that the truly wealthy will immediately understand, Michael has been advised to set up a foundation. “I have to donate about $70 million over the next decade,” he laughs. “Or maybe it’s $50 million. I can never remember.”

I occasionally advise young philanthropists, and so Michael asked me for suggestions. But, as an avid reader of this blog, he wanted me to ask the Thugz and you (the general readers). You may recall that I watched season 5 of The Wire with the Thugz a few months ago. Michael enjoyed my discussion with the ex gang members and he wondered what they would do with the money.

He also liked the irreverent, witty humor displayed by the readers of the blog.

I met Michael at Harvard, in the late 1990’s. He was part of a small group of twenty-somethings who came from very privileged social backgrounds.

They were “blue bloods” who fit the classic mold of the upper-class Northeast W.A.S.P.: educated in private schools, raised in Manhattan, summer homes in the Hamptons and French ski resorts, fitted with all the dressings of American aristocracy.

I spent a few years observing their maturation. It was a fascinating experience that I am hoping to write about in my next book.

INSERT DESCRIPTIONPhoto by Alix Smith.

For those who are interested, this American tribe has been captured beautifully by Alix Smith, a photographer raised in this insular world. Her website reveals her peers in sharp, stylized portraits.

If he followed the traditional path, Michael would set up a charity, and then donate about 3 to 10 percent of his endowment each year. But, he says he wants to exercise his charity in a slightly different way:

1) I want to give it all away in ten years.
2) I want to give it away only in the U.S. — I can’t stand these people who give money overseas when we need it at home.
3) I won’t give a penny to schools. I think its unconscionable that Gates is paying for schools; that’s the government’s job.
4) I don’t want to give anything less than $1 million at a time. Meaning, no small grants.

I’m going to ask the Thugz for their comments, but what say you?


Wes H

Tell him to bring his money to the cities with the highest homeless population rates and build affordable, low-income housing on proerty purchased from the government at a discount in order to help them reduce the 'unsightly' population of homeless. He could easily spend every penny of his 50-70M plus interest earned trying to help solve this problem. Plus, he would be given the chance to actually see the people his money went to help, something rare even in the USA, much less abroad.

Seth Levy

I would personally take $1 and put it in a bank account and use it solely for gasoline so I would not have to even think about gas prices for a long time if not forever. After that, I feel that this man should donate a large sum of money to the rebuilding of New Orleans so that people who live there now can actually get paid to rebuild instead of relying on volunteers. This would allow the unemployed to make an honest wage and for the city to be rebuilt properly and swiftly.
For the rest, I would create a scholarship fund in his father's name. Although my Grandmother did not pass down 70 mil when she died, the money she did have was used in this way.
If this counts as giving money to schools, the money should go to R & D grants working towards a goal of weaning the United States off of foreign oil.

Another idea I had is, if the United States Government decides to allow a guest worker program, use the money to help subsidize farmers and construction companies so they can afford to hire legal workers.

Read more...

perry

I think that he should promote entrepreneurship by taking business plan submissions from existing small businesses or ideas for new businesses that could use a 1M infusion of cash. In exchange, the recipients could donate a part of their future earnings into a new fund that could self sustain future entrepreneurship awards.

If he funds 4-7 of them per year, he'd be out of cash in a decade and may help someone out there create the next big thing.

casey

Spend 100k traveling to third world countries. We have very little in the area of unmet Needs.. but many unmet Wants

Matt

"I want to give it away only in the U.S. - I can't stand these people who give money overseas when we need it at home."

I have a very hard time recommending anything that falls in line with this. As Americans we have a very warped sense of what it means to be truly in need. In America, poor means you buy your clothes at the Goodwill and take the bus. In Africa and Southeast Asia, poor means you live your entire life without access to electricity, medical care, or education and die of starvation or disease.

If you really want to help people, send the money to people who are really in need, not just those who are poor by comparison to the affluence around them.

no way

Right, pay off your student debt? Er, how about going to a cheaper "state" university instead.

Fund the education system itself, now thats another story.

Michail Kalman

I would consider investing into a relatively new start up company in the US that has developed a technology for the creation of hybridoma cells that cuts the current production time of Monoclonal Antibodies (MAB) from 6 months to 6 weeks while increasing the library size by a factor of ten.

Most importantly,this company is the FIRST and ONLY company to have created MABs that are cancer specific to a degree heretofore not achieved, opening unprecedented opportunities in cancer therapy and diagnostics.

So far the company has created MABs that recognize Tumor Specific Antigens (TSA) for melanoma, ovarian and prostate cancer.

In the case of ovarian cancer, their MAbs have been able to identify cancer in the blood of ALL patients tested, including patients that have been declared in remission by the current FDA approved gold standard, CA125 marker and clinical evaluations.

The company is within striking distance (two to three years) from launching an FDA approved blood test for the 10 million women who are at high risk for developing ovarian cancer.

Read more...

Mat

Start a program geared toward teaching blue bloods how to work for a living. It's a real and persistent social dilemma.

No, raise the hourly wage of 17,500 randomly drawn, full-time, year-round working parents by $2/hr and track their outcomes. What a great experiment.

Jason

Give it to me to administer your foundation.

sourcreamus

Give it all to research hospitals who specialize in children's diseases. Any other needs pale in comparison.

Jenna

Not schools, but what about early childhood education (pre-K programs)? This guy has a crazy amount of money! Need a board member for your foundation?
I would buy a great camp with cabins and a lake, and pay for inner city kids, special needs children, or other poor children to attend for a few weeks in the summer. Teach them leadership skills, arts & crafts, self confidence, and give them a chance to forget about the world they come from.

Amy

Has Michael been to an American high school recently? I don't know where he gets the idea that the government is paying near enough.

FI

Pay for programs that encourage the amercians to go abroad and study/work like Fulbright, Peacecorp etc. A lot of the world's problem would go away if we just meet and talk to others and realize that we have more in common than differences.

jthyron

Make the world pretty. Build parks and such. Also scholarships are always popular (don't know if that's a no-no like schools). Or you could make a contribution to a Presidential campaign.
Obama '08.

Alex Sims

The requirement that it stays in the US because "we need it at home" seems a bit of an uneducated view. The poor in county have nothing on the squatter villages you see in the third world. Has his only international experience been France? That being said, as a libertarian I'm not going to coerce him with anything more than guilt.

Elizabeth

How about providing financial help to the uninsured or underinsured who have had devastating illnesses or accidents in their families.

Mike B

I don't get the aversion to small grants. Throwing large sums of money around to fund good intentions is a good way to see it evapourate without any real effect.

I think one of the best charitable investments are otherwise well run/motivated non-profits that have an immediate capital expense need. All too often established charities are forced to close up shop because their rent it raised or they need a vehicle or have to upgrade their facilities.

I volunteer for a free book place that narrowly avoided such a fate 3 years ago, but is still struggling to buy its new location. I benefactor plunking down 100-200k would safeguard its future and allow it to become a real institution.

Investing in community infrastructure can provide a lasting resource as opposed to a handout which is gone tomorrow.

howard u

Well, the requirements are: 1) In the US, and 2) not school-related.

WHY?

The first thing you should do is fund studies to makes sure that's reall what you want.

You could fund studies that 1) compare the merits of donaing in the US vs. Abroad (different causes in the US vs. abroad, and how far a donated dollar goes in the US vs. abroad), and 2) figure out if there's a way to get the government to pay more for schools. I agree with you that it's the government's job to pay for schools. However, if the gov't is unwilling to do so, you are only contributing to the problem by refusing to help.

david

Does he not have any causes he is passionate about? Has he given to charity previously or been personally involved in any causes? Were I to come into a large sum of money to disburse to charity, I would start with those that I have been investing in for years; I know those charities and have relationships with them. But then, I guess that is once of the differences between charity and philanthropy.

Gonenuts

How about Public Television (PBS and the like), Public Radio (NPR) or Public Libraries ?