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Andreessen Horowitz to give half their earnings to charity

finance.fortune.cnn.com

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Re: Andreessen Horowitz to give half their earnings to charity

#151

Post by zmitri »

pmarca wrote: post #146
hprhpr wrote: post #37

Earlier quoted context omitted.

Agreed about the importance of making sure you donate to the right charities, which is why I was disappointed to read this: "And, to begin, they have sprinkled $1 million on Silicon Valley nonprofits that focus on everything from urban forestry to homeless families." Another good essay about this stuff is here: http://lesswrong.com/lw/3gj/efficient_charity_do_unto_others...

For what it's worth, those six nonprofits weren't just chosen randomly. Each GP picked one he and his family had direct experience with. For my part, I don't know as much about this as some people, but my wife teaches philanthropy at Stanford and has studied, written about, and taught the topic of effective giving for her whole career, so that works out nicely for me. (Can't resist plugging her recent book "Giving 2.…

Hey Marc, speaking of giving 2.0, do you think there's some value in making it easier for companies to promote positive initiatives like this? Or do you think the action is more of a means in itself?

For example, if a16z said "Hey users of instagram (or users of a16z product that just sold), we're going to let you decide which cause some of this money goes to," would that create a delta in value from the original proposition?

Re: Andreessen Horowitz to give half their earnings to charity

#152

Post by pmarca »

jcampbell1 wrote: post #28
danilocampos wrote: post #20

Earlier quoted context omitted.

> when the charity doesn't deliver great results, they will feel like they are half-working for little results. What information do you have about their decision making process that makes you believe that they will select charities that don't deliver great results? What about success in venture capital, in your view, would prevent these individuals from successfully selecting/starting/advising philanthropic endeavors…

Getting results from charities is hard. Bill Gates quit his job to solely focus on this. Warren Buffet pledged all his money to Gates because he doesn't think he would be particularly good at it. My point is, why pledge earnings rather than wealth? I think pledging earnings is risky, and the world is better off because Warren Buffet did not do it.

Sorry, we did not intend to draw that distinction. I described this in detail in another comment, but we made a commitment of half of lifetime earnings/wealth/whatever you want to call it from venture capital to nonprofits, over our lifetimes. So there's no presumption that each year we give half, as opposed to at some later date.

Re: Andreessen Horowitz to give half their earnings to charity

#153

Post by pmarca »

zmitri wrote: post #151
pmarca wrote: post #146

Earlier quoted context omitted.

For what it's worth, those six nonprofits weren't just chosen randomly. Each GP picked one he and his family had direct experience with. For my part, I don't know as much about this as some people, but my wife teaches philanthropy at Stanford and has studied, written about, and taught the topic of effective giving for her whole career, so that works out nicely for me. (Can't resist plugging her recent book "Giving 2.…

Hey Marc, speaking of giving 2.0, do you think there's some value in making it easier for companies to promote positive initiatives like this? Or do you think the action is more of a means in itself? For example, if a16z said "Hey users of instagram (or users of a16z product that just sold), we're going to let you decide which cause some of this money goes to," would that create a delta in value from the original pro…

I'm not an expert (and don't want to comment on any particular company or product), but it's an intriguing idea. I think Marc Benioff was an early innovator in this area. It will be interesting to see what new ideas entrepreneurs -- or their investors -- come up with along these lines.

Re: Andreessen Horowitz to give half their earnings to charity

#154

Post by jimmyvanhalen »

pmarca wrote: post #140
jimmyvanhalen wrote: post #130

Earlier quoted context omitted.

Having capital to invest in more start-ups reduces risks and increases the chances of the VC earning bigger returns. In order to invest in more start-ups, the firm needs top-notch people (partners, associates, etc.). 1. The best people are not going to join a firm that's giving away 50% of their management fees and carried interest income. 2. Not enough people & capital means -Less investments, therefore more risks a…

> Having capital to invest in more start-ups reduces risks and increases the chances of the VC earning bigger returns. That's true up to a point, but only up to a point. You hit the point of diminishing returns pretty early. I wish it were otherwise but there's 40+ years of history that support that theory. It's not even that there aren't enough potentially great startups. It's that the venture business is a business…

>It's that the venture business is a business that scales mostly with people.

I agree which is why I brought up the topic of management fees and carry. You need them both to pay for additional people in order to scale your business. (which you addressed in your other comment).

Re: Andreessen Horowitz to give half their earnings to charity

#155

Post by [deleted] »

pmarca wrote: post #153
zmitri wrote: post #151

Earlier quoted context omitted.

Hey Marc, speaking of giving 2.0, do you think there's some value in making it easier for companies to promote positive initiatives like this? Or do you think the action is more of a means in itself? For example, if a16z said "Hey users of instagram (or users of a16z product that just sold), we're going to let you decide which cause some of this money goes to," would that create a delta in value from the original pro…

I'm not an expert (and don't want to comment on any particular company or product), but it's an intriguing idea. I think Marc Benioff was an early innovator in this area. It will be interesting to see what new ideas entrepreneurs -- or their investors -- come up with along these lines.

[deleted]

Re: Andreessen Horowitz to give half their earnings to charity

#156

Post by lukifer »

gwern wrote: post #113
lukifer wrote: post #70

This is why wealthy individuals are better for society than shareholder-owned corporations. If the latter made a move like this, the entire board would be fired immediately.

If 90+% of the shareholders voted to distribute that quarter's profits to charity - the equivalent scenario to the general partners so voting, no? - who would be firing the board?

Has this ever happened, ever? On the scale of 50% of a very large sum?

Altruism is a kind of positive irrationality; the more stake-holders are involved, the more exponentially unlikely such irrationality becomes.

Re: Andreessen Horowitz to give half their earnings to charity

#157

Post by irahul »

daenz wrote: post #114
paul wrote: post #96

Earlier quoted context omitted.

Typically the fact that someone has more money would not be relevant, except in this case it's a discussion of capital allocation and a person (Andreessen) who is making a lot of money by being very good at capital allocation. It's like claiming that Michael Phelps's 14 gold medals should carry no weight in a discussion of whether or not he's a good swimmer.

> It's like claiming that Michael Phelps's 14 gold medals should carry no weight in a discussion of whether or not he's a good swimmer. Not really. It's like Michael Phelp's 14 gold medals should carry no weight in a discussion of whether or not his butterfly stroke has room for improvement. No one is arguing that Andreessan is not good at making money. If people were, then your analogy would be correct. People are a…

> Having 14 gold medals does not prove to anyone that your butterfly stoke technique could not be better.

Having 14 gold medals means that though his butterfly stroke might or might not need improvement, a random punk on the internet doesn't have the authority to make a judgement call.

> Nor does earning a lot of money prove that you always make good decisions with money. Take my $100 toilet paper example. Earning a lot of money through good investments does not make using $100 for toilet paper suddenly unassailable to criticism. Does this make sense?

No it doesn't make sense. Your $100 for toilet paper example is pushing the boundaries of ridiculous which doesn't have anything to with the topic under discussion.

People who haven't earned through investment preaching people who have made a fortune about efficient use of money, money which happens to be their personal money, is just sad.

Re: Andreessen Horowitz to give half their earnings to charity

#158

Post by rooshdi »

larrys wrote: post #128
alwaysdoit wrote: post #75

Earlier quoted context omitted.

Did you miss the last two centuries where philanthropists built universities named after themselves (or their family members)? "Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community." - Andrew Carnegie

I have no idea how your comment relates to what I've said. I said "Seems that over the last several years or so there has been an uptick in wealthy people using peer pressure to get other wealthy people to give away their money" Did you miss this? http://givingpledge.org/#enter

Is there peer pressure? Sure, but at the end of the day, everyone of them made a personal decision to make that pledge. Could they have redistributed their resources to more businesses? Ok, but they chose the charitable route. Are there people that need these resources more than businesses? Absolutely: http://en.wikipedia.org/wiki/Millennium_Development_Goals#Go...

Sadly, we do not live in a perfect world. The resources and opportunities we take for granted are the same ones others do not have. Giving others a chance at the life and opportunities that were given to us is probably the wisest investment of all. The returns are deeper than dollars.

Re: Andreessen Horowitz to give half their earnings to charity

#159

Post by [deleted] »

irahul wrote: post #157
daenz wrote: post #114

Earlier quoted context omitted.

> It's like claiming that Michael Phelps's 14 gold medals should carry no weight in a discussion of whether or not he's a good swimmer. Not really. It's like Michael Phelp's 14 gold medals should carry no weight in a discussion of whether or not his butterfly stroke has room for improvement. No one is arguing that Andreessan is not good at making money. If people were, then your analogy would be correct. People are a…

> Having 14 gold medals does not prove to anyone that your butterfly stoke technique could not be better. Having 14 gold medals means that though his butterfly stroke might or might not need improvement, a random punk on the internet doesn't have the authority to make a judgement call. > Nor does earning a lot of money prove that you always make good decisions with money. Take my $100 toilet paper example. Earning a…

[deleted]

Re: Andreessen Horowitz to give half their earnings to charity

#160

Post by daenz »

irahul wrote: post #157
daenz wrote: post #114

Earlier quoted context omitted.

> It's like claiming that Michael Phelps's 14 gold medals should carry no weight in a discussion of whether or not he's a good swimmer. Not really. It's like Michael Phelp's 14 gold medals should carry no weight in a discussion of whether or not his butterfly stroke has room for improvement. No one is arguing that Andreessan is not good at making money. If people were, then your analogy would be correct. People are a…

> Having 14 gold medals does not prove to anyone that your butterfly stoke technique could not be better. Having 14 gold medals means that though his butterfly stroke might or might not need improvement, a random punk on the internet doesn't have the authority to make a judgement call. > Nor does earning a lot of money prove that you always make good decisions with money. Take my $100 toilet paper example. Earning a…

Way to miss the point :)
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