Giving as working capital

Howard Bilton set out to change the arithmetic of giving. Through the Sovereign Art Foundation, he decided to use the sum he could afford to give as working capital for an operation that would generate more than that sum.

So rather than donating a fixed sum, I wanted to use the sum that I had in mind and could afford to create a business which would generate more than that sum.

— Howard Bilton, Wealth Office

The foundation runs three professional art prizes for established artists who are well known at home but not internationally. Artists receive half of any sale and the foundation takes the gallery's portion, which funds art therapy programmes for vulnerable children. The Sovereign Group contributes people and expertise across 13 countries. Bilton says the foundation aims to double the money and achieves it, before counting wider benefits. He is equally clear that the model only makes sense if it produces more than it costs. Otherwise, he says, it is simpler to write cheques and let others build the infrastructure.

His offer to supporters is unusual. Instead of asking for donations, he offers the opportunity to buy art, so the buyer gains a work that gives pleasure for life while the gallery portion helps disadvantaged children. The ideal, he says, is to buy a piece and donate on top. He persuades reluctant galleries that losing one sale is outweighed by the status and later sales a finalist's profile can bring, and the events also bring volunteers and raise awareness.

The results are concrete in his telling. The first project the foundation supported, in Cambodia, helped children who had suffered abuse. Twenty years on, many have rebuilt their lives and some have returned as teachers, and a three-year Hong Kong University study recorded what he calls dramatic improvement.

Scholars who become funders

William Louey's version of the multiplier works through people. His educational foundation, established in 1995, has funded more than 60 scholars from underprivileged backgrounds at Oxford, Cambridge, Harvard, Stanford and leading British schools. Some now fund scholarships themselves, and Louey has met this second generation of scholars. Michael Macfarlane calls the model regenerative philanthropy, a form of social impact compound interest. Louey is frank that his first motive was partly to build a network for his son, prompted by a 1991 radio interview with an impressive young Hong Kong scholar.

But then after the first year of doing the scholarship, I became so addicted to helping people that I totally forgot about that. It's not personal anymore.

— William Louey, Wealth Office

His scholars now help his son in business in China, which Louey describes as a bonus, and 90% of them returned to build businesses in China.

Shield Xiao Dun describes the same dynamic from the receiving end. William Louey paid for his schooling at Millfield and most of his Cambridge tuition and never asked for anything back. Xiao Dun and fellow scholars now fund a Pay It Forward scholarship, but he accepts that it stops when funding stops. He hopes his company, which charges users just enough to sustain itself, will have the larger impact, and he says many entrepreneurs of his generation now approach impact this way.

Rigour, proximity and humility

Multiplication depends on choosing well. Elaine Chow, who runs a single family office in Hong Kong, co-hosts dinners for eight to ten family offices on issues such as illiteracy, human trafficking, special needs and ageing. The aim is to help families vet the many NGOs seeking support, and the vetted organisations are examined in the way an investor would examine a company.

It's like dissecting a company doing due diligence, but you do it for the philanthropy organisations.

— Elaine Chow, Wealth Office

Kedge Martin and Jamie Webb, who have both worked on philanthropic projects connected to the British Royal family, add caution about distance. Martin recalls a celebrity supporter who paid to ship bundles of clothes from America to Lesotho when giving the money would have done more, and urges new philanthropists to visit before they give. Webb's emphasis is humility. He distinguishes charitable programmes, usually run by one organisation for a specific need in a place, from movements, which are organic and involve many actors pressing for change. He cites Mark Zuckerberg's US$100 million gift to schools in Newark as a well-intended effort that met a backlash. Martin also sees the entrepreneur's distinctive contribution as a willingness to take risk and lose some money without undue worry, and warns that conventional foundation grants can carry requirements that charities bend themselves to meet.

Built to last, or built to finish

The guests differ on time horizons. Louey's scholarships and Bilton's foundation are designed to keep producing. Webb argues that this need not be the only model.

Philanthropy doesn't have to live forever. I think it very much is determined by the cause, the issue that you're working on and its time horizon.

— Jamie Webb, Wealth Office

He notes Bill Gates's wish for his foundation to close 20 years after his death, and sees merit both in perpetual endowments and in accelerating progress while the founder still has the energy to drive it. Both Webb and Martin regard personal connection to a cause as the real driver of lasting commitment, paired with listening, finding the best organisations and staying with them.

Philip Marcovici identifies another multiplier, inside the family. Philanthropy and impact, in his account, can draw family members with no interest in the operating business into stewardship of the wider family's assets.

What these guests share is a view of giving as design. Bilton builds a business around the gift, Louey builds a network of people who give in turn, Chow builds a due diligence process and Webb matches a structure to its cause. In each case the question is how far a sum can travel after it leaves the donor's hands.