Philanthropy for Hackers

Author: Sean Parker · Published: The Wall Street Journal, Saturday Essay, June 26, 2015 (online; weekend print edition June 27–28) · URL: wsj.com (paywalled). The Parker Foundation hosts a reprint PDF.

One-line: Tech’s newly rich “hackers” should bring the habits that made them rich (distrust of the establishment, data, speed, big bets) into a philanthropy world Parker calls antiquated and “the most distorted market in the world.”

Saved to Kyle’s Apple Note “Things To Internet” (c. mid-2015) as “Hackers guide to philanthropy by Sean Parker.”

Summary

The new elite. Parker opens with the shift in wealth: tech pioneers now hold “almost $800 billion of the $7 trillion in assets held by the wealthiest 1,000 people in the world.” He says they “are hackers,” sharing “an antiestablishment bias, a belief in radical transparency, a nose for sniffing out vulnerabilities in systems,” and “an almost religious belief in the power of data.” They got rich young and never joined establishment institutions, so they are “underprepared” for the responsibility. They are also “young, naive and perhaps arrogant enough” to think they can solve the world’s problems.

What’s broken in traditional philanthropy. Private foundations and endowments have been accumulating untouched funds since Carnegie and Rockefeller, and he cites Howard Hughes’s 1953 gift of his Hughes Aircraft equity to a tax-exempt entity. Philanthropy, he writes, “may be the most distorted market in the world, the only one where the buyer of a good or service—the ‘donor’—isn’t the ultimate recipient of the value.” With no tools to measure impact, “the primary currency of exchange is recognition and reputation, not effectiveness,” which is why donors compete to name buildings. Hackers instead look for “hackable” problems, the ones with viable solutions. His examples are Dustin Moskovitz funding GiveDirectly cash transfers to residents of Kibera, and donors who want Mixpanel-style dashboards and direct contact with scientists and field workers.

The lessons:

• Start giving early. “The moment anyone begins to worry about what the establishment thinks, it’s probably an indication that they’ve become a part of it.”
• Deploy capital quickly. Spend down during your lifetime, “without worrying about leaving behind an institutional legacy.” Carnegie built libraries to organize knowledge, and his foundation “carried on funding libraries even after the Internet made them obsolete.” Wikipedia was “one of the first hacker-led nonprofits.”
• Remain small and bet big. Big foundations end up “taking on the worst characteristics of government.”
• Focus on “hackable problems.” Parker cares about refugees and climate change but claims no special insight into them. His own focus is cancer immunotherapy. He tells the story of Carl June at the University of Pennsylvania, whose CAR T-cell work went unfunded by conventional sources until private foundations stepped in after his 2011 trial results. That work led to complete remissions in some leukemia patients.
• Follow market logic. Treat giving “as a series of calculated risks.” Some bets fail and others “ought to generate exponential returns.” “Being wrong is as valuable as being right.”
• Get political. He points to George Soros, the Koch brothers and Michael Bloomberg, and says advocacy can mean backing policies against one’s own interest, such as a higher long-term capital-gains rate or ending the carried-interest loophole.

Close. He announces the Parker Foundation, launched that week with a $600 million gift that he will oversee in his lifetime. His aim is to leave “not an unwieldy institution for others to manage but rather a world better off than I found it.”

Full text

Archived privately against link rot: ../attachments/philanthropy-for-hackers/philanthropy-for-hackers.md, transcribed from the reprint PDF the Parker Foundation hosts and saved alongside as source.pdf. The full essay is legitimately accessible there, so this is the whole text, not an excerpt. WSJ’s own page is paywalled.

Connections

• Philanthropy: Parker’s case for measurable, spend-down, risk-taking giving, set against the “recognition and reputation” economy of naming buildings.
• Philanthropreneurship: philanthropy run as capital allocation with a feedback loop. “Follow market logic” and “being wrong is as valuable as being right” are that argument as Parker puts it.
• Foundations (Philanthropy): the vehicle question. Parker argues against the permanent, tax-exempt, endowment-preserving foundation.
• Sean Parker: the Napster co-founder, Facebook’s founding president, and chairman of the Parker Foundation, per the essay’s author note.
• Andrew Carnegie: Parker’s example of a foundation outliving the problem it was built to solve.
• Dustin Moskovitz: his example of hacker philanthropy through direct cash transfers.