David Goldberg: Founders Pledge – Maximising Charity Efficiency & Impact. Ep. 534

Transcript

welcome to epicenter the show which talks about the Technologies projects and people driving decentralization and the blockchain revolution I'm Brian Crane and today I'm speaking with David Goldberg he's the co-founder and CEO of Founders pledge going to learn a lot about Founders pledge and you know me I I've been sort of part of that Organization for quite a while actually fredrique is also part of that and I think SE joined as well at some point so uh a few of our hosts are are involved here and this is going to be a little bit of a different episode less cryp so but hopefully still interesting especially for all of the people listening who are founders and who might want to get involved because a great thing to be involved so thanks so much for coming uh coming on David oh thanks

for having me Brian I appreciate it and yeah before we get into our chat with David I would like to tell you a few words about our sponsors this week this episode is brought to you by gsis gsis builds decentralized infrastructure for the ethereum ecosystem with a rich history dating back to 2015 and products like safe cow swap or nosis chain nosus combines needs driven development with deep technical expertise this year marks the launch of gnosis pay the world's first decentralized payment network with theosis card you can spend self- custody crypto at any Visa accepting Merchant around the world if you're an individual

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one so yeah David thanks so much for for coming on I'm excited to speak with you maybe just to get started tell us a little bit like what's your story and how did you end up starting founder spludge yeah sure um it's actually founder spludge is really about my journey as it were um so I'll maybe start at the beginning and sort of quickly whiz through some of the sort of pivotal moments that led to where where I am now um I'm from California originally um born and raised working-class family um I remember thinking as a young person um everything would be better if only my parents had more money and that was of a really driving idea for me as a young person so

I dropped out of high school when I was 17 ended up um trying to find a job and getting one soon after I turned 18 at a at a bank um and I you know sort of got pretty lucky um and uh you know from 18 to 20 almost 22 worked at a private bank uh essentially selling mortgage back Securities um and I certainly sort of hit my income goals as a young person pretty quickly but along the way got really unhappy um as most people do when they work in finance uh and uh and spent you know three and a half years slogging away to make money only to realize that you know uh working you 60 70 hours a week means that you don't really have

much capacity to spend that money on anything at all um I ended up uh quitting that job uh as I approached 22 moving to Europe for the first time uh and ended up in Berlin where I started a business um it wasn't a a sexy technology business or anything it was just a a thing that made money straightaway like a good oldfashioned brick and mortar business business and um I ran it for two and a half years and sold it to a a larger company and found myself you know 25 uh sort of with a lot more than I needed I felt very very lucky like I'd almost won the life Lottery a couple of times yeah I was born um despite

being born into like a a relatively poor family um I was born a white man in California in the 80s and um and and it meant that by nature of sort of time place that I was amongst the wealthiest people ever to have existed even though I didn't realize it or feel it as a young person and I got really lucky in finance and I got really lucky starting a business and it just felt like um if I didn't do something to rebalance the karma scales that I'd um I'd be du a catastrophe or something and um so I figured uh I'd spend a couple of months giving away some money being a philanthropist I'd feel really good about it you know uh and then I'd move on to the next project and I think this was a pretty naive perspective to have

had like that it would just be like a snap of your fingers and you give away a bunch of money well and feel good um in fact my experience was like pretty frustrating I I wanted to give away money and I started to look into nonprofits and what I found was like this ecosystem of in efficiency and waste of uh ill-considered choices and Mis incentives donor preferences trumping sort of charitable objectives and just like you know like a fundamentally broken space that you know if I were to put money into it it would just be like lighting it on fire and so I sort of decided that I I should probably do something about or at least

figure out how to do something about it and that's sort of what started the founders pledge Journey um from this oh man how broken this is to like I should I should do something about it um so yeah I uh I didn't really know what to do or how to do it so I figured I'd figure out how to think about things better so I moved back to the US and finished high school um and then uh went to University and did a double and then came to the UK to do a PhD okay so you went to you went to college really late then and sort of that the mature one surrounded by the young college students that's right um it was a little it was a little awkward

at first to be honest I mean I was 25 amongst you know teenagers really uh but it did provide me with a bit more purpose and Direction and sort of like yeah Focus really um I didn't really need to go out and party and do the college thing in the way that lots of young people do I was there to learn like at had a specific set of goals which was like figure out how the world works and where the sort of levers for power exist and figure out how to move them in the right ways and then how did you end up starting founder Sledge yeah so I ended up in the UK um working on a PhD I dropped out of that

um didn't really feel like the right use of time and I joined a um an organization that had this really interesting mission that really appealed to me it was called Founders forum for good and it was an initiative of the founders Forum group here in the UK which was uh is this um annual Gathering of the good and the great of tech so it's like a sort of really high density high quality group of tech Founders that come together came together for one day every June in London for a conference and um it been running for 10 years by the time I joined to um work on this nonprofit initiative and um and my task was to help um social entrepreneurs that

existed in the world somewhere be more commercially viable by leveraging the uh community of the founders for and bringing these sort of exceptionally talented Tech Founders um who had great Commercial Success into the sort of Realm of the social entrepreneur who was using technology to scale their impact sort of in in some way created a bit of a matchmaking and sort of accelerator for for these businesses and it was a really cool idea that just didn't work um mostly because the entrepreneurs that we were trying to support with this initiative weren't particularly good entrepreneurs well-intentioned as they were they just didn't really have the stuff that um makes uh a good executor

um and so Founders pledge was the result of this sort of failure I guess you know I was trying to help these socially minded people be better commercially and the idea was sort of just what if we help great commercial entrepreneurs be more social um and then I was like I should maybe build the thing that I that I wanted when I sold my business like how does one figure out how to allocate capital for maximum social impact when that capital is scarce and data is limited um and so that sort of became the idea for Founders pledge and um started as this initiative to get people to commit to give a percentage of what they make if they ever sell their

business to to charity and expand it from that basic commitment to a a much bigger ecosystem of um of social impact I can get into the details if that's helpful as well yeah let's get into the details totally so um the basic premise is um everyone who becomes a member of Founders pledge makes a pledge as the name suggests and it's not just for Founders although um most people assume it is it's Founders investors VCS and um meaningful shareholders or wealth holders and everyone make some form of pledge uh typically it's a percentage of their personal proceeds on exit so if they ever have liquidity in that business they donate 5 10 25% of what they make

personally to nonprofits of their choice so each each person who pledges can decide the amount that they want to pledge um and it really does range from the low end which is 5% all the way up to 99% in the high end and once someone is is pledged they become a member we have about 1,900 members now from 40 countries and as our job as a nonprofit once someone has joined to really take them on a journey and help them skill up often from naive but well-intentioned philanthropist when they join to really Empower change maker by the time they have liquidity to deploy and what that means in practice is in a normal year we'll host 30 to 40 events all over the world these are typically small dinners in our members home

or in restaurants where we'll bring 10 to 20 people together put them around a table have a thought leader or expert guide a discussion on some topic of relevance where we really dig into the meat and substance of an issue like how do we deal with the Mental Health crisis in America or how do we deal with the Mental Health crisis in Subs Africa where it's just as extreme or how do we Empower women and girls or how do we educate the bottom billion when they're often not well enough to even go to school and so we sort of try to provide context and frame to some of the bigger and more relevant issues of our time and in the process um educate our members help them connect with each other around

shared interests um and you know really sort of level up in terms of their knowledge and um uh and what that what can be done to affect these issues in a positive way and uh this program lasts for as long as it need last you know we've been around for for about 10 years now and so some people joined in year 1 and still haven't had an exit some people joined in year one and had an exit in year 2 um and so the the whole idea of this community and this program is that um we are here to sort of constantly support knowledge um and uh and action for for social impact um so we do these events um we publish a fair bit of

um research on our website and do sort of programming uh both on and offline and then we have uh some infrastructure that we've built to enable impact at real scale so there's two forms here the first is the actual Financial infrastructure um it's not just enough that people commit to give it's that they actually have to give and so sometimes um it's it's really challenging to donate money across the world especially if you live in America or uh or the UK or Germany sometimes it's it's uh the the government doesn't really like you to move you know hundreds of thousands or millions of dollars from the UK to Kenya or South Africa or India uh and so we've built essentially a

foundation as a service that all of our members are able to use that enables them to donate to a single nonprofit entity Founders pledge get a tax receipt for that donation wherever they're a tax resident and then Founders pledge deploys that money on their behalf does all of their Grant making end to end to enable impact to happen wherever it's most necessary so we aren't constrained by the same types of rules and regulations that an individual might be subject to and so our Donor advised fund which is this Foundation as a service is U zero cost it's Global first and the majority of our members who actually end up uh giving to charity use it and then the final piece here is we have a big

research team sort of like a think Tech that does all of the of heavy lifting to figure out where best to give if you care about uh women and girls or helping children more broadly or education or poverty or climate change or fighting inequality or racial Justice um so our team focuses on identifying the most pressing issue areas finding the best interventions within them and then identifying Charities implementing those interventions that are the absolute best in the world of the thing that they do and can productively absorb more Capital such that someone can arrive to us uh you know without any real background and charity just a knowledge that they want

to give back if they have success learn about how to do that over the course of time have that exit event donate to charity and then deploy that Capital to the very best things in the world all for free using Founders pledge yeah very cool yeah I mean personally someone introduced me to uh to you guys I guess I was like just around when I started uh course one and then I took that pledge I think in 2018 it was you know right at the beginning and and so it's sort of been part of that organization as well and taking that pledge and uh and and participated in some of the events too which I think were really really great both in terms of you know content people like learning

and and yeah I can sort of attest to the support you guys have provided also in in in terms of giving a little bit right I think for the most part still right we haven't sold course one and no plans for that but you know a little bit already been able to sort of Leverage uh you guys's uh support in that regard yeah and it's it's been our pleasure to help you with it and the funny thing is not everyone who pledges ever you know not everyone has an exit and some people are just going to build really great Revenue positive dividend businesses that never end up going to sell and some people are going to close down their businesses without ever having a a liquidation event or liquidity event because um it's just not viable and others are going to

have IPOs the point is in pledging everyone makes a similar form of a commitment and that commitment is you know uh one that we expect our members to abide by it's legally framed um even though we don't legally enforce it and so this act of signing a contract signing a pledge that says I'm going to do this as in when I have wealth to do so I think is the thing that it really matters and creates the sort of common thread of unity between the 1900 people who are part of Founders pledge um but it also means that once you are a member you can use all of the support that we provide for um for your benefit so some people um give as as part of their uh out of their income every year from

their salary and it's certainly not in the millions of dollars um but um that doesn't make it any less relevant or important and we're happy to provide the same support that we would if there was a liquidity event as if you're giving to to charity from your saler so where a resource the moment someone joins and then I mean we have lots of uh people listening to this podcast right who've been in crypto for a long time and including lots of Founders uh is there like can anyone you know who who's a founder or you mentioned Missi as well can anyone join or is there some sort of um selection you guys have or like how does that work yeah it's a good question so

um we are an invite only Community but practically speaking if someone reaches out to us and says hey I'd like to join Founders pledge and I'm really early on in my business and I'm 10 years away from having any real money but I'd still like to join we're going to we're going to have them join of course we talk to everyone who we invite to join though so U you can't just sort of go to our website and sign up um so if you're interested you're listening um bers pledge.com has a ton more information you can reach out and have a conversation with one of our team you know we have a a pretty strict no asol policy and um and what that means practically is we just want to talk to everyone and make sure there's value alignment um you can imagine that there's people in the world who would

like to be a part of this just for the sort of image boost or signaling benefit that it could create for them and those people um they're pretty easy to spot um they sort of stick out like a like a sore thumb uh so having a conversation is just an easy way to sort of uh get a sense of why people are joining and uh and who they are and what they're working on so typically um we look for people who are growing Venture back technology companies although we work with a number of individuals and families now that you know come from multigenerational wealth and you know they're investors and um and F both funds and and companies uh but really they're uh commitment to philanthropy is

longer rooted and they want some support there as well and so we we we help people in all sorts of capacities the the basic condition is that they have the desire to do good um and uh ideally doing good as much good as possible using data so um there's like everything uh a spectrum uh and on one hand you have someone who just wants to give because the act of giving makes them feel nice and on the other hand you have someone who wants to give because the active giving um affects beneficiaries as as uh as much as possible so like we're more interested in the we want to have as much impact as possible so if someone comes to us and says hey I'm I'm

an early employee at crypto company X and I've you know done well by um putting my money into the right uh protocols early on um and I want to give a bunch of money away we're we're really happy to work with people like that as well and then uh I guess a lot of the uh you know Founders joining you know they have some business that pledge Equity but then of course in crypto often uh you know it's people uh create some protocol and tokens and then that that's fits just as well in that framework where you bedge yeah you can pledge uh coins tokens um any any number of types of instruments uh whatever they are um

the the the thing for us and you know ultimately we're like a bit of consequentialists like we just care that the thing actually happens like if there's people who want to use their resources to give back and affect the world positively then we're happy to help them do that for you like building Founders B what have been your biggest uh your biggest learnings and the things that surprise you the most yeah that's a good question I guess one of the things that I decided really early on about Founders pledge is that it needed to be set up with the right incentives so there's lots of um Good Intentions out in the world and um and I think a lot of sort of poorly designed businesses and nonprofits uh poorly designed in the sense that they um don't

take into account how you're incentivizing good behavior or bad behavior so one of the things that was important to me was that Founders pledge um never have to sell to survive or compromise its Integrity for funding so um everything we do for our members we do for free and this was a a choice that we made and what it means practically is that someone can show up at Founders pledge make a pledge come to 20 dinners over the course of 5 years have an exit donate money into our Donor advised fund um work with our advisers and use our research and then deploy all of their capital and never spend a single penny on Founders pledge like it's free

free and this is important because it enables us to focus on the main thing which is impact you can imagine a world in which you know we charge for each piece of what we do where it creates barriers for entry on one hand for the people to join and on another hand for us to actually try to sort of scrape cash off the top so that we can fund ourselves um by focusing on just impact and only impact and enabling our members to um work with us in a way that there's never any question about what we care about um it means that our uh sort of Integrity is above reproach um and uh and and the main thing is is impact um

the flip side of that coin is I have to go out every year and fundraise to keep the lights on and my team paid and um you know as a team of 65 it's not inexpensive and so Founders pledges funded through donations as a nonprofit ourselves that um come to us through existing philanthropists foundations nonprofits a couple of corporates give us money because they like who we are and what we do um and only if someone has derived value from working with Founders pledge having used our support and our services um they can choose to support us if they want so um by providing this for free and focusing on impact Above All Else our members who have gotten this free service still

choose to support us as a nonprofit of their own accord and so this this means that only when we provide value do people end up uh funding us so it does keep this nice alignment in uh in both donor interests impact and our our own Focus so um I guess the learning is like do the right thing even if it's the hard one um and it certainly has been hard right like um I have a little bit of an existential crisis every year about sort of September October when I look at our fundraising numbers for the year and I see you know we are off by some number of millions of dollars and there's like

three months left in the year and if we don't raise enough money um then I have to reduce the headcount next year or reduce cost in some other way um so it makes it really challenging but it also makes it um yeah impact first I guess that's one of my my big learnings the other is focusing on people like so Founders pledges it's is is it is its team or the are our employees and um it's really hard managing a team of 65 people well um I figured that because we were an impact company nonprofit that it would be somehow easier to maintain

company culture but it turns out it's it's actually not it's maybe even more challenging because not only do you have a social purpose like people join because of the mission but also you have the same sort of Human Condition issues that you know every business faces and so you have people who really care and have joined Founders pledge in instead of Google or wherever else any number of like interesting places that would have paid them more money because of the social purpose and the the impact that we create and that just sort of heightens the stakes and it and it means that like focus on culture for us is become increasingly increasingly

important um and ensuring that we are being the best we can as um as a company and as um leaders of that company is what have you learned about building a great company culture that your values are everything you live or die by your values and um uh and that like a great head of people is like a crucial part of maintaining company culture and embedding that in all that we do uh one of the one of the great things that I learned from a coach a couple of years ago was like if you aren't hiring firing promoting and rewarding based on your values then you

don't really have values like our values should enable us to make decisions uh that we otherwise wouldn't be able to make absent a set of values like ours are maximize impact uh take action energize others and follow the data and we do that in all that we do so whenever there's a question about what's the right course of action we look to our values to say what what should we be doing what does the data say is this going to maximize impact or minimize impact like is doing this going to be good in the short term but actually really um kill the momentum of this team or this project um and uh yeah and so you know I think company culture is the product of of good

leaders uh like strong values that you live and breathe um and like a clear purpose are there some mistakes that you made uh in this in sort of with regards to Building Company culture that you know you feel like really shaped you and like ended up being something like okay I have to do we have to do this differently later or some things that you know you only realize later I mean hiring well is really important and also really hard so like um we've made a ton of mistakes with hiring like assuming that um you know what seems to be surface level value alignment but isn't

really tested well coupled with just you know um smarts cleverness brute IQ will lead to good results so what uh to be more specific we had a much less rigorous hiring process in the early days of Founders pledge it was like oh cool you have a pulse you say you like what we do you're happy to work hard um great you've got a job like we need people compared to now where I think we have seven or eight different interviews which seems like a bit over the top but when you think about what's required to um hire an employ like we we like spend a huge amount of time once someone has been offered a job Skilling them up getting

them fed into our systems it takes sort two months before they're really net positive on the system so if you hire poorly then you're basically wasting two months of valuable time not just of that employee but of the people that train that employee so um we have a much more um s intentional and substantive hiring process with lots of different interviews values interviews and um now at the end of every stage once someone is sort of passed every other hurdle they have an interview with two people of our team and it's selected at random who do sort of culture fit interviews so they can actually understand what it's like to work with us because if we hire someone

poly and uh then we it takes us months to undo the damage and real cost um so that's one piece of it so just uh asking I'm I'm curious about this I think that's interesting topic like how how do you go from you know sort of you know hearing someone say okay you know I share those values to like understanding if they actually do and and sort of digging deeper there like what are the what are the methods that you use for that yeah I mean we have a set of questions that we ask about sort of like how would you make a decision about X like talk to us about how you

think about this process like what are the steps that you'd go through in order to go from a to z um and we you know it's sort of like how I've I've heard consulting firms like interview like big five consulting firms interview like how many you know tubes of toothpaste are sold in the UK each year like obviously you're you know your average person even your average clever person isn't going to be able to come up with the correct answer even with wide aor bars but how they think about it is the more important but like what's the process that you go through to determine how many tubes of toothpaste are sold in the UK so we do a similar sort of thing but like um you have a member you know create a fictional scenario um how would you how

would you address their concern or their issue how would you deal with a time-sensitive request on a Friday night that was needed to go out by Monday morning and so we ask people to walk through it and there aren't right or wrong answers there's just how people think about it and and how what the the path they suggest says about their value set and their alignment with our and it doesn't necessarily need to be the case that like people arrive with you know fully formed values that are our values it's just they need to demon also demonstrate a willingness to absorb them and sort of operate with them I think part I think part of it is having a great uh sort of head of people or HR team that designed this process for each

company like what our process is is going to be different than what another company's processes that has a different culture not better or worse just different let's talk a little bit about like impact so maybe first of all what do you think in in your personal view like what are the biggest areas where you know you feel impact can be had or you know the most urgent things that you feel need to be addressed there's a lot right um so it's first worth saying that the world has been getting increasingly better year on year since to the 80s like there's less poverty there's less suffering there's

less death there's less disease overall we're getting better um even though dayto day it can often feel like things have never been worse there's war there's conflicts there's um famine there's pandemics there's just like a Spate of bad news that sort of pours at us um non-stop so it's first we're saying that things are getting better they have been getting better and this this has been the result of like really dedicated and directed hard work at UH addressing some of our biggest problems like extreme poverty um and uh and malnutrition and economic impoverishment um but the areas that I'm

most interested in today are sort a combination of um sort of what you might expect and some uh interesting new stuff so um the despite our gains in global health and well well-being there is still like a lot of work left to do around um poverty especially in loow Middle income countries so I think this is an area that continues to be um like exceptionally valuable and high impact um and I'm speaking about you know the bottom billion living on less than $3 a day um I'm speaking about uh uh you know empowering women and girls I'm speaking about education um in low-income contexts uh about malnutrition about

displaced peoples I think these are all big areas where thoughtful philanthropist can have outsized impact alongside more topical uh things like the climate crisis which um you know in the last couple of years has seen amount of money flowing Into Climate philanthropy just Skyrocket so it's a very well-funded space now and despite that there still a huge amount of work left to do and really interesting areas from more where more funding is needed that are just being ignored by many of the larger funders out there and this is typically around um preventing carbon lock and a

Lancome economies and um uh and sort of changing the Innovation environment in high- inome countries to enable um Technologies to progress at a at a much faster Pace such that we can um transition out of uh dirty power into sort of cleaner power and and in the process deal with a a huge amount of necessary carbon sequestration and then uh the other big issue I'd say is um while things have been getting better generally uh and for the majority of people out there we we are still um uh sort of playing roulette with a with a bunch of other big issues like

Global catastrophic risks so um I think it's not an exaggeration to say that this pandemic that we had in 2020 which seems to be mostly behind us was predictable and predicted and expected and we will have more of this this is not the last pandemic that we will experience that our generation will experience for sure and we were caught unawares last time uh mostly um and the result was lots of people died um and uh we should expect pandemics to continue um uh and maybe won't be as lucky as the last time because we had this sort of naturally occurring zootropic pandemic

that um didn't kill anywhere near the number of people that um it could have like small pox killed uh a vastly large number of people vastly larger number of people um so there's these Global catastrophic risks like um uh pandemics and other bioc threats as well as um you know potential for nuclear war and autonomous weapon systems and Military AI there's a whole bunch of scary things happening that uh Phil philanthropists can be focusing their energy on to make better I mean one thing that comes to mind here that just seems to be sort of an inherent challenge with uh you know

nonprofits and philanthropy is you know if he start like a a for-profit company then there's the sort of obvious way that you can uh you know measure success right which is okay you know do you generate profits right like how much revenues do you have what do you cost like how is that developing and you know you have this real like feedback system where you know if you do a crappy job like well you're probably going to go out of business and it's going to be over and uh you know and and so you have that kind of regulatory mechanism that the market provides but of course with with uh with nonprofits but you're getting money from some donors and then

you know you do something and whether that something works or not I imagine is a lot harder to assess absolutely it's one of the big conundrums and one of the reasons that the nonprofit ecosystem is so inefficient is because there is no feedback loop because the donor isn't the person who receives the good or the service and the person who does because the beneficiary has no mechanism to feed back to that donor that the thing was good or bad or that they are better off as a result of it um which is why much of the work that we do is really important because it provides the transparency the feedback loop the the check on input to say that the outcome was worth the actual cost um so like

most of the work that our our research team does is around understanding the interaction between inputs and outcomes and building cost Effectiveness models to assess whether an input into charity X or charity y or charity Z is the most effective on a dollar per dooll basis and and it's like are the out is the outcome in terms of a sort a unified metric around quality of life or reduction of disability burden or um income doubling better at one of these three Charities and if so which one and by how much and then also sort of helping um donors and so we can analogize them to investors to understand like where am I going to get

the most return to what point so there's another interesting sort of uh Quirk to the nonprofit sector which is um there's a a room for funding that most Charities have most nonprofits have which is to say that like um in a given year they can use x amount of dollars to do their work after which more dollars actually don't change anything it goes into sort of uh their Reserve budget and they can't spend it because they don't have the capacity to so assessing how much a charity can productively use in a specific period of time is also like a crucial point because you know ostensively we we don't want to overfund a nonprofit to have our money that has

value in in the time that we're giving it to just go and sit in a someone's bank account to not actually be used not be implemented so understanding your it is is really crucial so like funding Charities at the right amount so when we do an analysis we understand the cost effectiv this of dollars pound zeros or hundreds of thousands or millions and then we provide sort of funding recommendations to U the world and our members to say like we think this charity can productively absorb $4 million more dollars this year after which the uh their funding uh their efficiency just falls off a cliff because they are going to have to you

know hire up a new team scale into a new region um and uh we we have much less clarity about whether they can do that well and so we often are making recommendations that say but $4 million here $2 million there half a million there because that's the actual amounts that nonprofits can productively use and and and in a sense we have this feedback loop through the founders pledge um modeling and Analysis that we do to say that it's the best use of that next dollar and you know that's where um you know some of the secret sauce comes in I guess yeah I mean I I guess there's sort of another maybe slightly uh perverse incentive right where the nonprofit

itself maybe doesn't have really the incentive I mean of course they have the incentive to uh sort of showcase what they're doing as highly effective and they're you know probably not incentivized to be like oh actually does you know to to to do that kind of data analysis and that kind of reflection on the effectiveness of what they're doing in in like an unbiased way do you think it's necessary to have or like to what extent do you see uh nonprofits themselves do that kind of analysis effectively or do you think it's crucial to have a sort of some you know like neutral third party like you guys do this I think it's really important to

have uh a someone to come in and do the analysis I mean you can rely on a nonprofit's own internal analysis to a point but it's like having a student check their own homework right like um they're all they're almost always going to give themselves thought marks right if left to their own devices um one of the things that we look for is um like real data transparency and transparency and operations so if a charity never talks about the mistakes that they made then they're hiding something from you right like universally this is the case like Founders pledge makes mistakes and we write about them on a Blog um and um you know our mistakes are as important as

our successes and I think that it's it's it's probably pretty important to have someone aside from the implementing organization itself or the donor's you know family office do some analysis it's the reason why most wealthy successful people work with um like external wealth advisers for well there's a couple of reasons why they do the first is obviously like there's the opportunity cost of doing it yourself the lack of brain chare just you know the number of things that any successful um wealthy person has to do is U often more than they have the capacity to do um and then there's like the expertise that comes with that um specialization and like you know um certainly couldn't

tell you the first thing about where to invest your money uh in public markets but I could talk for days about how to deploy philanthropic Capital to affect poverty in subser Africa and that specialization um coupled with the sort of uh remove from the self like uh bringing someone in to help you think about it I think is like a really crucial part of success and I I don't know many philanthropists who do it all themselves one thing I'm curious about so I mean I guess the you know there's this um maybe sort of philosophy or brand of you know effective

altruism which you know I guess it sort of falls under and and that at least with uh you know of course uh the most famous effective altruist uh or you know at least on the surface looked like it you know Sam bankman freed has sort of maybe gotten a bit of bad reputation I'm curious has that affected you do you feel like there are some lessons to draw from from that yeah I mean I I think it's a good question um I think there's a lot of good thinking that has happened within the the effective altruist community and um and I think that uh there have also been a lot of

bad apples in the EA community that have um almost certainly For Worse um tarnished the the what is you know good thinking um through their bad behavior so i' I'd say that we are sort of influenced by EA in some way um we've uh sort of learned a lot from how effective altruists think about the world um but have developed our own sort of thesis our own Viewpoint that is I would say maybe a bit more humanistic than your you know strongly utilitarian ea uh person and yeah we care about data we care about measurement we try to take

sort of rational approaches to things we try to maximize impact where we can and where different methodologies can help us we learn from those methodologies and incorporate that into our own um but to to paint everyone who's a part of EA with the same brush that SPF has used I think would is like intellectually sloppy and ridiculous so you said uh you bit more humanistic in your approach what does that mean so it means that we take um like we are not working in an artificial construct in the sense that like these are the only things that you should

focus on because this is the truth and it's objective truth and anyone else who thinks differently is wrong like that's a sort of an approach that discounts The Human Experience so our our perspective is that like people have lived experiences and those lived experiences shape who we are and what we care about and rather than saying You must ignore them to focus on impact like we lean into how does one's personal story um constrain them or expand their capacity to do good or bad like as an example um my father died of cancer 5 years ago my aunt died of cancer a couple of years after that cancer has affected me in a really profound way and to pretend that it hasn't would be sort of doing a

disservice to my family and my own perspective about the world but rather than saying I focus my energy on cancer because I've experienced it in my personal life um I focus on how can we use data to best affect things related to cancer maybe not as a first order impact but as a second order impact so one of the things that I've funded myself is um uh micro and macronutrient fortification which tends to result in in a couple of countries across Subs Africa a much higher incident than stomach cancer so by following data and trying to understand like where we can affect cancer I've sort of uncovered that micro and macronutrient

fortification which leads to the healthy de development of the gut um is a a thing that needs support in subser Africa and uh because this is so prevalent stomach cancer is higher in the areas where the these uh uh micr macronutrients are are less available so I fund that now and the first order impact is people live healthier happier lives and the second order impact is that they have less incidence of stomach cancer now it's not lung cancer that killed my father or multim Myoma that killed my aunt but it's still focusing on the things that have shaped my journey and guide me into to giving in areas that might be unexpected do you find it sometimes

challenging that you know people come in and yeah they have sort of their personal preferences with regards to you know yeah some I don't know I really like dogs and my favorite thing is the dog and so I want to like put my money there even though like maybe it's sort of questionable well I guess depends what you care about right but so we asked a question like why why do you like like dogs so like we try to get to the so what of what people say what they care about and do I find it challenging sometimes of course but it's part of what we do is help people to find their sort of intrinsic and core values well

uncover them like they they're there somewhere but often people care about animals but without a real sense of necessarily why it's like what is it about animals that you care about um and maybe uh and maybe it's that they just like love the companionship of dogs and don't like to see dogs suffer um and so you know we can then sort of try to understand animal suffering and what does that actually mean so if you don't want to see dogs suffer but what do you care about pigs as well do you care about cows you care about chickens and so like we can sort of go from this narrow space of I care about dogs specifically and dogs in my neighborhood to like how do animals experience suffering and can we do anything to affect that um and so we try to on one

hand understand where someone starts and what they care about and on the other sort of expand their moral circle from the thing that they've said very specifically to what else could be included in that in the time you've been interested in philanthropy what are the biggest things that have changed that's a good question I think there's been um a real proliferation of organizations focused on data I mean um when I had my exit back in 2008 um there was just like nothing you know there was no there was no real data that I could find the

internet was still in its infancy in a sense right um or at least there there was certainly much less available information about this about philanthropy about impact about rcts and sort of the types of studies that um often our work relies upon but there's been like a real proliferation of organizations doing analysis of sort of philanthropic groups um Jer advised funds have become a far more uh common structure uh alongside lots of other types of um s of group related giving like giving circles and Affinity groups and um and evaluators like us and give well and and

others you guys recently launched a venture capital fund as well can you talk a little bit about that and the role of of that sure uh so Founders pledge um launched and then spun out a venture fund so we're technically no longer connected um but the basic premise was um you know because Founders pledges a nonprofit and we don't charge for what we do um I spend most of my time fundraising to keep the lights on every year um and in 2021 as I was crossing the street in London I nearly got hit by a bus I was I looked the wrong direction as I sometimes do when I when I'm at here and uh and I had this

very near mess and I uh sort of step back from the curb um thinking like what what would have happened if that had been it like if I had been hit by this bus and I'm I'm not here anymore like would Founders pledge have survived would it would it have thrived and I sort of came to the pretty clear conclusion that there would be you know a real problem not because Founders PL isn't well run I mean I don't run it like I have a great coo who does most of the work very thankfully um but because I I keep the the nonprofit funded and so I started to think to myself like how could Founders pledge fund itself if not with donations like what

are the other mechanisms for you know income that we could create without changing the incentives and without sort of um you know compromising on impact and I sort of came to this idea that instead of relying on our members to eventually give to us having received value what if we could participate in their success alongside them on the on the cap table as investors and it was just like a a sort of small jump from that to we should start a venture fund and invest in Founders pledge members companies at really consequential moments in time and see the success of those Investments benefit primarily Founders pledge and so we've built a venture fund called pledge Ventures that's pretty unique in the world as far

as I can tell that's a commercial Venture fund for its investors the the people who put money into it as LPS but the GP the The Entity that actually makes investment decisions and is entitled to 20% of the returns the GP donates back the vast majority of its return 85% of that 20% back to to Founders pledge such that the primary beneficiary of the success of this Venture fund would be Founders pledge the nonprofit um and so that was the basic idea I'm not an investor unlike most Founders I've never really wanted to be an investor it doesn't really excite me but I found I found myself as one um as it were and uh and rather than trying to

like pick the best companies you know with my finger in the air like sometimes uh I've led to believe that VCS do uh we are uh making we're making Investments based on a set of rules that we've built that the data suggests um are the right rules to focus on and so pledge Ventures um invests um in every company that passes our three criteria and those criteria are one one of the founders of of the company's a member of Founders pledge and that they've pledged the second is that the company's raising $20 million or more in a series be year later and the third is that one of their investors um is a top tier investor so they are one of the VCS

that's participating is in the top quartel of investment performance um in VC and so these three criteria mean that we invest um really only in the very very best companies and growth stage rounds alongside the most stored investors of all time and we can do this because we've built 10 years of Goodwill amongst our members we never asked for anything in return and we say hey you're raising a $40 million series C and SEO is leading the round we'd love for you to make a small allocation of that uh investment available for us by and large people say yes and so we have this Venture fund we've raised about $45 million for it now we've made Seven

Investments um and uh and if we're successful over the course of the next couple of years then Founders pledge will be sustainable from the returns of this Venture fund it's not certainly not sustainable yet it's going to take years until we know if this will work or not um but it's looking good so far cool yeah and then I guess in the future if it works you you can create more funds with the same structure and yeah yeah so I mean we're we're um yeah we're we're going to close fundraising on our first Fund in April um if if fund one is successful will certainly raise fun two probably similar sort of thesis but who knows um it's

exciting um and uh and different and uh you know you ultimately no one really gets Rich from this um but the founders pledge benefits for you what are the biggest challenges that you feel like founder pledge needs to tackle sort of in the next decade of its life I think part of it is funding right like hence pledge Ventures it needs to be able to um survive and thrive absence the constraints of my ability to fundraise so I think funding is one of the big challenges the second is um figuring out how to scale what is a very human Centric business to a

larger number of people um so like what we do is very personto person it's High touch and as we continue to grow and we add about 120 members per year we can't just throw more people at it so there we need to figure out how to build some efficiencies with technology I think staying ahead of the curve in terms of where funding is necessary is going to be really crucial we've built a pretty amazing we built a pretty amazing climate team that do um really great work around climate philanthropy um and and staying um great is is hard right um ensuring that the

quality of our thought remains high is I think crucial I think it's basically it like it's just about continuing to execute like our model works we just need to continue to deliver it probably should have asked this earlier but can you talk a little bit about sort of the numbers in terms of you know the impact that final sped has had so far yeah so we have 1900 seg atories from 40 countries they pledged $10.5 billion or so to charity philanthropy and uh our members have donated now a bit more than a billion of that um about bit more than half has actually gone to end user Charities uh

and the rest is in various foundations and um sort of nonprofits endowments awaiting and user deployment cool so if if one were to apply your method to look at you know Founders pledge as a charry itself and like the effectiveness of Founders pledge like how would you sort of assess or rate that yeah we're really effective it turns out we actually did this assessment um internally and then the person who did the assessment left Founders pledge and joined another nonprofit and has just redone it and um yeah work quite effective uh as it turns out so um I believe last year um for every dollar of Opex we

spent we moved it or $10 counterfactually to a high impact funding opportunity and what that means is that this wouldn't have happened otherwise and it is as a direct result of our work so um like a 9x multiplier on in your spend to high impack funding opportunities is very very good um the year before I think it was seven um and our multiplier against all money moved in year I think it's 20 20 some odd times our our spend per year um so it puts us pretty nicely in high impact range cool oh anything else you want to you want to share of people

listening uh basically like I think it's I think it's really easy to like punt giving back to the future when you have more or when there's more security or things feel less he hectic or crazy but um I think now is the best time to do anything right so um later is always easier now is always harder but the world certainly does need our support so we should probably be giving it even if it's not very large sums and I assume that the people who listen to your podcast are people who've done well in crypto and Beyond and um the people who do well should give back cool well thanks so much for for

coming on David uh it I think really great to you know talk a bit about final pled and learn more about it uh and and yeah I hope some of the people have listened feel uh feel inspired and feel like maybe this is something for them and if so yeah go go to final.com and check it out and maybe get in touch with with David and and the organization and yeah you can get R thanks Brian I appreciate it cool and thanks so much for listening I appreciate you tuning in and we look forward to being back next week