Our Guiding Principles
The job at hand at the I.G.Y. Foundation is to rationally and quietly reallocate capital to where it can do the most good.
We have heard it said that any fool can write a cheque but, if that was so, how come so few people do? Whilst the cheques have to be written, it is much better, it seems to us, to give something of yourself too. The process is harder than it looks, and our thoughts on allocating the Foundation’s capital are as follows:
1. We (the I.G.Y. trustees) do our own work assessing which charities to help. We choose a low profile to filter out the noise of the day and hope to have some real insights. They don’t come very often.
2. We have a strong preference that donations are, as much as is practical, anonymous. (The model that the I.G.Y. Foundation admires the most is that presented by the life of Chuck Feeney who, with some bumps along the road, managed to give away a large portion of his wealth without anyone noticing. Alas, this is almost impossible to achieve today given the public record keeping of the UK’s Charity Commission and Companies House. Even so, going about our business with the least fuss and fanfare is helpful in our ability to do a good job.)
3. Although the relationship between the Foundation and its donation-receiving charities is that of donor to donee, our attitude is as if it were a partnership. We will be open and honest as to our intentions and thoughts and expect the same in return. We value rational, fact based discussions.
4. The Foundation is funded by donations from the business operations of Sleep, Zakaria and Company and I.G.Y. Limited, which means that we may care about the effect of the donations in a way that other Foundations may not. When we make a donation, our attitude is as if we were spending our own money (plus the corporate tax break from charitable donations). We care about how this is done and how the donation is used.
5. Our long term goal is to maximise the effect of the donations we make. We may test the waters with small donations and then scale up if the opportunity arises.
6. Our preference would be to do that (5) via donations to many charities. In reality, however, good ideas are rare and the sides of the donation funnel can be steep. If we find something truly good, we are prepared to do the heavy financial lifting.
7. We look for good inputs recognising that good outputs may take time.
8. Some outputs cannot be empirically measured and subjective outcomes can be important. There is a thought that charity should be treated as if it was a business using return on investment like criteria. Whilst such an approach can be helpful, it may also be misleading. Charity is not business, if it was, it could finance itself. The delusion comes when donors congratulate themselves for making small, short-term grants to existing charities and claim that the return on their donation is high, whilst neatly ignoring the historic and in place spending that is necessary to build the donee charity in the first place. This incremental cost accounting approach risks doing a disservice to those responsible for the initial heavy financial lifting. Run to its logical conclusion, if all donors only funded short-term, high return propositions (if returns could be calculated at all) then many charities would not get off the ground in the first place. I.G.Y. takes a different approach and is prepared to invest in the platform that allows others to claim their high returns.
9. We look for charities that make decisions by starting with a grass roots need and then work backwards. To put it another way, managerial “wish lists” will not be fulfilled at donor’s expense. In a similar vein, we have little interest in intermediate charities, the publicity hungry, advocacy, lobby groups and political agendas (there goes the knighthood).
10. Over the long-term, we will check results against donations, in order to check good words are matched with good deeds, bearing in mind point (8) above.
11. Over the long-term, we will do the same with the performance of the investment portfolio. To date, and without recourse to borrowings, the Foundation’s cumulative outgoing donations have exceeded all incoming donations. In other words, we have more than spent the money we originally put in. The assets of the Foundation (over twice the size of the founding donation) are therefore entirely attributable to investment gains.