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Why Philanthropy Matters

Why Philanthropy Matters

The secret superpower of a thriving economy

Have you ever wondered why the United States—and specifically Silicon Valley—became the epicenter of the Information Age? Why of all places did this become the home to Google, Intel, HP, Apple, Facebook, and so many others?

I’m sure you have some ideas, but I doubt philanthropy is one of them. And so I strongly recommend you read Why Philanthropy Matters by Zoltan Acs. It’s one of my favorite books. Acs makes the compelling case that philanthropy is the secret superpower of American capitalism.

As for Silicon Valley, the pivotal moment of its destiny takes us back to 1885. Leland and Jane Stanford became incredibly wealthy from Leland’s ownership in multiple railroad companies. (He presided over the famous Golden Spike ceremony that joined the east and west segments of the Transcontinental Railroad.) Their wealth reached a peak of around $50 million, or $1.3 billion in today’s dollars, even if it was earned in the same questionable ways as the other robber barons of his time.

But in 1884, the couple’s only son died from typhoid fever at just 15 years-old. It was in their heartbreak that they made a decision that reverberated for decades to come. Declaring that “the children of California shall be our children,” Leland and Jane dedicated nearly half their wealth and over 8,000 acres to found Stanford University.

In the US, we’re accustomed to seeing huge philanthropic gifts like this, but they are hardly the norm in world history. In fact, the US economy is remarkably unique this way: marked by entrepreneurs of middling origins (Leland’s father was a farmer and Jane’s a merchant) who go on to incredible wealth and then historically large philanthropy. From Carnegie’s libraries to Gates’ health and education funding, this has been a distinctive feature of the American economy.

Nearly every major tech company today—along with their jobs, wealth, and products—traces its origin in whole or in part to that single philanthropic act by the Stanfords. Hewlett and Packard attended there, as did the Google founders, Page and Brin. Of course, this doesn’t even begin to contemplate all of the doctors, researchers, educators, and other professionals who started there.

This story can be told over and over with other schools, too, and extends well beyond the elite universities to state schools, HBCUs, and even community colleges that have opened more doors to opportunity than we can count. Although there are legitimate criticisms of education philanthropy, there’s little doubt that its impact on the whole has been immense.

And this is just one area among many that philanthropy in the US has fueled over the years. Professor Acs makes the case difficult to refute. Libraries, community centers, hospitals, and parks all enjoy philanthropic funding along with tax dollars. But for a history of massive philanthropy, the United States today would be a fraction of its size and vibrancy. And our future will likely depend on it in just the same way, a point that Acs notes with concern.

(Next week we’ll look at the other side of this issue, and the argument that modern philanthropy could threaten the very things that make the US healthy and strong.)


Seeing Good at Work

The more opportunity we can create for everyone, the better off we all are. WeThrive works with low-income youth in grades 7–10 to train them in entrepreneurship and leadership, setting them up with life skills that lead to better futures for themselves and their communities. The program scales by training teachers and administrators in the curriculum.

Beginning with a pilot in 2010, WeThrive has since grown to reach over 2,000 kids per year in cities across the US. The students who participate get experience starting real businesses earning real money. 81% of kids who participate continue with their ventures after completing the program.

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50 Words for Snow

50 Words for Snow

Problems differ more than we say

Winter’s nearing its end, and many parts of the US are getting what might be their last snowstorms. You’ve probably heard that the Inuit have 50 different words for “snow.” As you might guess, though, the truth is more complicated than that.

First, it depends on which language you mean. According to the Alaskan Native Languages Archive, there are two main language groups in this part of the world. One is the Aleut language, otherwise known as Unangan. The other branch is Inuit-Yupik, which has about a dozen varieties still in use today.

Even if you just pick one of those languages, counting the words for snow still gets messy. It depends on what you mean by “word”. You see, these languages have many root words that mean snow, but then they add on extensions to get more specific about the kind of snow involved.

For example, the word qanik means “fallen snow”. But if we add to it, we can get the word qanittak, which means “freshly fallen snow”. This is a simple example, but we can go much further. We could use the word sitilluqaaq for example, which means “a recently formed hard drift of snow after a storm”. “50 words for snow” doesn’t even get us started.

The nature of the Inuit-Yupik-Unangan languages is that you can craft such a vast variety of “words” for snow that we’d never find an end to them. We need a different way of thinking about language itself to get started in the right direction.

This all relates to another quirk in the way we talk about the problems facing the world. We call food insecurity “a problem.” The same goes for human trafficking, illiteracy, and any number of other challenges. Each one is “a problem.” But this language doesn’t reflect reality.

For example, we call access to clean water a “problem,” as though everyone without clean water is in the same situation. But getting clean water to people in Malawi, Darfur, Dhaka, or Flint requires very different solutions. Most notably, the solutions that worked in one place, like Flint, wouldn’t work in any of these other places.

“Problem” lacks nuance and context, and so then does our understanding of things like clean water, human trafficking, illiteracy, an so on. What we could really use is a language like Inuit, where we have a word like “clean-water-for-people-with-dilapidated-municipal-water-systems-in-urban-US-settings”. Or, “clean-water-for-people-where-water-sources-are-targeted-in-armed-conflict.” Absent the language for it, we at least need the clearer thinking that language like this provides.

What problems are you lumping together? How are they different in a way that matters?

(Edit: The previous version of this article used the word “Eskimo” to collectively refer to these languages because the sources I relied on did the same. But a kind reader helped me learn that this term is unacceptable because of its colonial origin. The native people of the region prefer the terms from their own languages, such as “Inuit.”)

Seeing Good at Work

Inuit communities over hundreds of years developed complex expertise that’s enabled them to live in extreme environments. Climate change has made their home one of the fastest-changing parts of the planet, threatening the survival of the Inuit way of life. To make matters worse, Inuit children are one of the fastest growing demographics in Canada yet have the fewest educational resources.

Shelly Elverum is bridging the Inuit and Western worlds through collaborative scientific research projects in a model called ScIQ, where the local youth take key roles in research design and data collection. This gives them an opportunity to grow academically while promoting and preserving centuries of traditional knowledge. Ikaarvik, a leading ScIQ program, has received funding from a wide range of environmental research groups.

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The topic this week is a perfect chance to introduce you to The Ballard Brief, a publication that specializes in just the kind of nuance that’s needed to better understand social problems. Published by BYU’s Ballard Center for Social Impact, The Ballard Brief offers short, but thorough briefings on a wide variety of social issues.

In each briefing, you’ll find explanations about problems around the world and current and emerging practices that we’re using today to try and solve these problems. Each briefing is rigorously researched and offers additional resources where you can learn more. Its library of topics is growing quickly.

Two Kinds of Courage

Two Kinds of Courage

The bravery of Allan McDonald

The morning of January 28, 1986, NASA proceeded through the final launch checklist for the Challenger space shuttle. Only a handful of people fully appreciated the disaster that loomed.

This was the third time they had scheduled the launch that week, the prior launches having been scrapped for unflattering reasons. (The first delay was for predicted bad weather that never materialized and the second for a failed hatch mechanism.) The pressure to launch on the third try was intense. NASA struggled with the perception that it wasted taxpayer funds, and the White House wanted to feature the shuttle in President Reagan’s State of the Union address. So when a coldfront bringing record low temperatures to Florida settled in the night before, NASA called all of its suppliers to ensure that a below-freezing launch would be safe.

The infamous conversation between NASA and Morton Thiokol, maker of the shuttle booster rockets, is rehearsed in ethics classes around the world. The executives overruled their engineers by approving the launch and sealed the tragic fate of the seven Challenger crew members before they ever entered the shuttle.

Allan McDonald—who passed away on Saturday—was one of the good guys. He was Thiokol’s representative in Florida, and was fully aware of the dangers being overlooked. His role in the Challenger story demonstrated the two kinds of ethical courage that everyone needs at some point:

  1. Momentous Courage. This is the courage that movie scenes are made of, the kind that comes in a single moment of decision. Prior to launch, all of the key NASA suppliers had on-site representatives there to give the green light. McDonald refused. It was disruptive and embarrassing to his employer, who instead signed off via fax from a company executive. That one act could easily have cost McDonald his career. He later called it the best decision he ever made.
  2. Enduring Courage. Less dramatic but just as important, enduring courage is the kind that persists in the face of resistance. Twelve days after the disaster, McDonald found himself at the commission hearing investigating the disaster. From the audience, he stood up to contradict a Thiokol engineer’s testimony. McDonald ended up giving his own evidence that ensured huge consequences for his employer, and thus to many friends and loved ones who also worked there. He was demoted for blowing the whistle until members of Congress threatened to ban Thiokol from future contracts.

Professor Mark Maier of Chapman University worked extensively with Allan McDonald in the years that followed. Here’s what he had to say about McDonald:

“There are two ways in which his actions were heroic. One was on the night before the launch, refusing to sign off on the launch authorization and continuing to argue against it. And then afterwards in the aftermath, exposing the cover-up that NASA was engaged in.”

All of us will eventually need both kinds of courage, the momentous and the enduring, to make the right thing happen. We can be grateful for Allan McDonald’s example to show us the way.

(You can read all about McDonald’s experience in his book, Truth, Lies, and O-Rings.)


Seeing Good at Work

STEM fields are still dominated by men, here in the US and around the world. McKinsey released this 2018 report, identifying potential solutions through philanthropy and CSR. There is plenty to do. Girls in Tech works with partners around the globe to get more girls on the path to STEM careers.

One of their partners, Chicas en Tecnología, operates in Argentina and has established over 100 programs in schools around the country. Its founder, Melina Masnatta, was made an Ashoka fellow in 2018.

Finally, a shout-out to my incredibly intelligent niece Isabel, who is a student at Caltech and just the kind of woman we need more of in STEM careers. 😁

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Our ethics training company, Merit Leadership, offers free monthly webinars. One of them is today (March 9) at 10am MT. The speaker, Bill O’Rourke, is a former Alcoa executive and my coauthor on The Business Ethics Field Guide. Visit our events page to see this and upcoming webinars as they are posted.

How to Be Resilient

How to Be Resilient

Helping Others Makes Us Stronger

A lot of science shows that we benefit substantially by helping others. Giving help, even in small acts, reduces stress and anxiety. It makes us more creative in solving our own problems. And multiple studies show that helping makes us more resilient in difficult circumstances.

Strong relationships are one of the secrets in all of this. As I noted in a previous newsletter (Giving Is Glue), the act of giving increases our sense of responsibility for others instead of relieving it. This, in turn, deepens the relationships that make us more resilient.

Why do our relationships have this effect? It appears to be thanks to a whole host of factors. One of them is changing our perspective. People who love us, for example, can reduce rumination—the way we dwell on bad experiences or outcomes.

The added perspective we get in helping and connecting with others is critical. According to Dr. Michael Ungar, professor at the Resilience Research Centre at Dalhousie University:

“Resilience is as much about what we have as what we think.”

Helping changes our thoughts—in real and measurable ways—about our own circumstances. It doesn’t make our problems go away, but it does make them seem much more manageable.

How has helping someone made you see things with a better perspective?

Seeing Good at Work

Hands down, one of the highest impact things we can do is educate girls. Not only are they better off, but heir families end up with higher incomes and improved health, while the benefits resonate throughout generations.

Educate Girls operates in India with community volunteers who rally community members to get more girls attending and staying in school. The community model has proven to be more sustainable and makes the local schools better. Since their founding, they have enrolled over 750,000 girls that weren’t attending school.

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Our ethics work with US Special Operations Forces was recently covered by KSL News. You can watch and read to learn more about the Ethics Field Guide we developed for them. If you’d like to learn about our ethics trainings and programs, visit MeritLeadership.com.

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