Big-time philanthropists weigh in on what drives them, and how charity matters globally.

Since the first economic or social barters were made by man, a disconnect has existed between the creation of individual and social wealth. This gap has been filled by giving.

It’s been there at every stage of our species’ development. Whether one sees this phenomenon as evolutionary (based on pro-social behavior) or spiritual (originating from an urge from deep within our souls), the fact remains that giving – in all its forms – has been one of the greatest factors in the success of humanity and spans all the domains of human assets: the intellectual, economic, cultural, social and even biological.

In reality, there are few (if any) beings on our planet who have not been touched in some way by giving, whether it’s a small act of generosity from a stranger, or being lifted out of poverty with a micro-loan. Without some form of giving, many of humankind’s greatest achievements simply would not have occurred. Giving is also one of the few activities humankind often undertakes without the geographic, cultural, social and political prejudices – and it’s everywhere.

“We can scarcely open our mail, answer the telephone, or walk down a city street without encountering opportunities to give,” Robert Bremmer wrote in his 1996 book Giving: Charity and Philanthropy in History. “In addition to tangible things, we give – or withhold – love, trust, friendship, encouragement, sympathy, help and advice. What we give to alleviate the need, suffering and sorrow of others, whether we know them or not, is charity. What we give to prevent and correct social and environmental problems and improve life and living conditions of people and creatures we don’t know and who have no claim on us is philanthropy.”

So what is the role of charity and philanthropy in society?

To discuss the fundamental nature of charity and philanthropy, and their role in society, I have interviewed dozens of philanthropists: Craig Newmark (the founder of Craigslist); Jeff Raikes (founder, Raikes Foundation and former CEO of the Bill & Melinda Gates Foundation); Eli Broad (founder of the Broad Foundations); Anousheh Ansari (trustee of the X Prize Foundation and title sponsor of the Ansari X Prize); John Paul Dejoria (philanthropist and entrepreneur, founder of Paul Mitchell hair products and The Patrón Spirits Company); Jacquelline Fuller (director of Google.org); and Darren Walker (president of the Ford Foundation), among others. An excerpt of those interviews appears below.

Why does philanthropy exist?

Jeff Raikes: Philanthropy plays at least four key roles in society. First, it can help fill the gaps created by market failures. The private sector is an effective mechanism to allocate resources in society and to produce better products, goods and services. But capitalism has its weaknesses. Sometimes markets fail. It’s at those times and in those areas where philanthropy is best suited to step in. In the same way that capitalism is an effective way to produce goods and services for society, I think private philanthropy is a good way to produce social benefit.

Second, philanthropists can take risks that others won’t. The public sector produces goods and services to help improve society, but they do that with tax monies. Taxpayers don’t love it when their governments take significant risk. They want wise stewards of public money and resources. The private sector, on the other hand, is unwilling to take risk without the potential of profit. Philanthropy is not risk-constrained in the same way.

Third, philanthropy can help scale good ideas: With our partners, we can identify innovative solutions to challenging problems, test them out, develop the evidence of their efficacy, and then share what we learn and help demonstrate opportunities that can be scaled up and sustained by the private sector, the public sector, or both. Let me give an example: If we provide the “risk capital” to figure out how to reduce rotavirus vaccine prices dramatically, possibly through new scientific formulations, and then share widely how to achieve the price reductions, organizations can take these innovations and save hundreds of thousands of additional lives.

Finally, philanthropy allows us to connect and share values. I believe that it’s ultimately our hearts and values that draw people to philanthropy, whether that’s working at a foundation or as an individual giver of money or volunteer time. People are moved to help others.

Jacquelline Fuller: It’s important to address the fundamental question of why people who “have” give to those who “have not.” There is clearly a utilitarian or effective-altruism perspective insofar as the next marginal unit of income to me – if I am a high-income privileged person – can have a much higher impact on the life of someone else in the world. This behavior makes a huge amount of moral and rational sense according to a lot of our faiths and codes of conduct.

If we step outside this rational-agent perspective, we see that we’re living in this marvelous era where there is significant research on happiness, all of which shows that giving makes us happy. There are many studies that show that, after a certain level, more income doesn’t increase our well-being. That marginal dollar, given away, makes us happier than if we were to spend it on ourselves!

And research shows us that it’s not necessarily that happy people give but rather, that giving makes us happy. Research shows us that giving with empathy is what makes us happier. If we give out of a sense of duty or peer-pressure, you won’t get the benefit, but if you give with empathy, you actually have a longer life and better health. Philanthropy is part of our human behavior, it’s part of who we are.

It’s an investment where the return you get may not be monetary, but rather the satisfaction of change or success.

What does philanthropy mean to you?

Eli Broad: This city and country have been very good to me, and my family, and because of this we have a desire to give back through philanthropy. We do this in a number of areas: education reform; scientific and medical research; and the arts.

Andrew Carnegie said, “He who dies with wealth, dies with shame.” I think you have an obligation to give back, to make things better and to create institutions that didn’t exist before.

Everyone can contribute something. If people don’t have the financial resources, they can certainly commit their expertise and time.

Jeff Raikes: We believe that our success, and the opportunities we’ve been able to provide for our family, have been supported by societal institutions – schools, communities, health institutions, and more. Philanthropy is an opportunity to invest our resources back into society to build the social, spiritual and material wealth that can help the lives of others. Our passion for humanity leads us to philanthropic choices and investments to share our wealth for others.

Anousheh Ansari: I feel that I’ve been fortunate in so many different ways. I was born and raised in Iran, and lived there during the early part of the revolution and war. I come from a middle-class family, and we were never very wealthy and when we moved to the U.S., we faced many difficulties. I know how it feels to be on the other side of the table, and understand how some of the programs and projects that were available to me – such as scholarships, student loans and so on – helped me and my family establish a new life in a new country. We didn’t just establish, but we were able to reach out for our dreams and really succeed. All this tells me that with a little help and support, things can change, not just on an individual level, but at a global level too.

I look at philanthropy as an investment. I don’t do it to gain brownie points with God. I do it because I believe in investing within the community and world I live in. It may be an investment in an individual, or an idea that can change the world.

The terminology I prefer is social investment, but many people use charity and philanthropy interchangeably. Ultimately it’s an investment – a high-risk one – where the return you get may not be monetary, but rather the satisfaction of change or success.

Craig Newmark: I’m a nerd, old-school, and have learned to know when enough is enough. Specifically, once I have enough for my family and myself to live well enough, then it’s more satisfying to make a difference.

Philanthropy, for me, involves giving back to others so that they might live the best lives they feel possible. That’s not noble, or altruistic, it’s just that a nerd in this sense has different aspect than normal people, and I don’t need much.

Seriously, it’s not altruistic, I just feel that a nerd’s gotta do what a nerd’s gotta do.

It’s not necessarily that happy people give but rather, that giving makes us happy.

How did you choose the areas and methods of philanthropy you engage in?

Craig Newmark: Ultimately, it’d be fun to have civilization-wide impact, and that motivates my interest in a trustworthy press, one where you don’t always have to worry about news lying to you. I like to say that “the press is the immune system of democracy.”

Other areas resonate with me personally, like veterans and military families. I can only guess that, while growing up, I saw a lot of returning Vietnam veterans being treated badly, and felt that was wrong. Now, I help.

Jacquelline Fuller: I lead Google’s philanthropy, and we give fairly generously. We’ve committed a high percentage of our net profits each year to philanthropy, which works out at north of $100 million. When you look at the challenges that philanthropy takes on, however – like ending poverty or improving education – this can seem like a drop in the ocean.

We think about our core strengths as Google and think of where our dollars could be differential. We ask ourselves where we could achieve the most leverage by combining our grant dollars with the rest of the assets we have available as Google.

For example, one approach we take is our tendency to fund technology and innovation; that’s an area that Google knows best, and is really aligned with our core strengths.

How do you approach the big-game opportunities in philanthropy?

Eli Broad: In education, our aim was to improve student achievement and close the gaps that existed because of income and ethnicity. That’s how it all started. We really like to see change and therefore we support change agents – people who sometimes are disruptive.

In the arts, we want to see arts enjoyed by a broader part of our population. It stimulates creativity and society.

In scientific and medical research, whether genomics or stem cell research, we want to see solutions to a lot of the physical problems that mankind has.

We’re probably more aggressive than any other foundation in America, especially in education reform. The things we’ve done in science and medicine didn’t exist before. We were the first ones to get Harvard and MIT to do something together! That project now has over 1,800 people, a $280 million research budget and we’re number-one in the world now in genomics.

It all gets down to people. You need to find great leaders, people you can identify with, who have a plan, that have the ability to make it happen, and who can present you their plans and ideas. If you like their plan, you give them resources: We don’t then walk away, we make sure they’re following the plan and that things happen. It’s not simply writing checks.

What are the key lessons you’ve learned in your journey in philanthropy?

Eli Broad: Philanthropy has given us the opportunity to meet great people outside the world of business and so on. Secondly, it has given us many ideas, and it’s been very educational.

There are also big challenges every day. What we’re doing in education reform gets a lot of pushback and criticism from the established old interests, whether that be teachers unions or others. They want to maintain the status quo and are uncomfortable with change. That is not so in science.

Craig Newmark: I’ve found that there are a lot of really effective charitable groups whose success is limited because they don’t know how to tell a good story. Unfortunately, I’ve found that a lot of bogus charities succeed by virtue of telling a good story, but accomplish no more than enough to provide a good cover story. As a result, my team and I are a lot more careful.

I really haven’t had much of an “entrepreneurial journey.” Mostly, I treat people like I want to be treated. In my world that means listening to people, acting on that, and repeating that process.

Is philanthropy everyone’s responsibility, or do you see it as something which society believes only to come from those who have achieved large successes?

John Paul Dejoria: I feel it is the duty for every human and company to do something to either make their community, their city, their state, their country or the world a better place to live. You don’t have to contribute financially, but rather your time, smile and good wishes to start the ball rolling. Time is a very valuable thing, when you contribute your time to others, you’ve contributed something of great value.

When you contribute your time 
to others, you’ve contributed something of great value.

What are the greatest challenges to philanthropy, and for philanthropists?

Darren Walker: One of the biggest challenges, and one of the drivers of inequality, has been a failure to invest in public goods. Throughout history, philanthropy has always complemented the efforts of the public sector. For example, the Ford Foundation funded the research that would lead to Head Start, and also funded the Children’s Television Workshop, which went on to create Sesame Street.

Increasingly, the public sector is not investing in these kinds of goods, and foundations have been left with the impossible task of filling the gap. Given the comparatively small resources of the philanthropic sector, this causes us to either spread ourselves too thin or to lose vital programming.

What are the greatest challenges and opportunities you see facing society over the next decade?

Craig Newmark: Getting good, honest information from which to make good decisions about really big issues like climate change and also economic stability.

What are the biggest challenges faced by our society that philanthropy could impact?

Anousheh Ansari: The most pressing issues that face us can all benefit from philanthropy.

X Prize not only inspired people to go after the dream of building spacecraft but also it changed a whole paradigm of policies around space flight, and changed how policy-makers looked at private space exploration. That accomplishment is perhaps even more valuable than winning the prize itself. We had to educate the FAA (who now have a division dedicated to space flight) and even change the way that NASA thought about public-private partnerships.

There are many challenges in terms of energy, water, food, education and more. Every aspect of these problems can seriously benefit from prizes. They are complex problems that don’t have a simple solution. Through publicity and paradigm changes, they can benefit. With prizes, we can make leaps in efficiency not just with technology but with visibility about the problem.

We can become the link between innovators and policymakers. This is not a short process, it takes years.

A lot of problems that have not been solved are problems that somehow get stuck with politicians and policymakers. It’s not that we don’t have the answers, but policymaking has created an environment where solutions cannot be implemented.

Has your visit to space influenced your philanthropy and attitude?

Anousheh Ansari: On a personal level, having that experience [going to space] really changes you at your core. It really gives you a new way of looking at your life, your relationship with the environment and even with other people. It gives you a global perspective – you cannot look at Earth and your own city, town and country in the same way again. You really do feel like a citizen of the world.

I think the first group of people we should send to space are politicians. I watch and listen to what’s happening around the world, and see the laws and policies that are passed, and sometimes feel like saying, “If you’ve seen what I’ve seen, you would not be sitting there arguing about these things.” If someone has the physical capability to have this experience, they should be able to do it. Over time I hope it becomes as inexpensive as taking a normal plane trip.

VIKAS S. SHAH is an entrepreneur, investor and the founder of the U.K.-based web journal thoughteconomics.com, where a longer version of this story first appeared.