PLEDGING IT FORWARD
An Edited Transcript of a Conversation with Paul English
August 17, 2017, at Boston Healthcare for the Homeless
for the 2017 Boston Foundation Annual Report:
The Problem Solvers
How a Group of Unusually Creative Philanthropists
Are Helping to Solve Some of Boston’s Big Problems
TBF: It seems that agility or the ability to experiment and try to run the race like a startup would be a good approach for nonprofits. Do you see many nonprofits taking that route?
PE: I can’t think of any off the top of my head. Nonprofits, I think, often have too many bosses because a lot of donors act like bosses when they shouldn’t. When you have multiple bosses it’s hard to innovate. I think it’s pretty obnoxious the way some donors provide funding to nonprofits… I wish that more donors were more hands-off, and saw their jobs as giving money and raising money.
TBF: It’s true that unrestricted gifts are always most welcome at nonprofits, whatever they do. You don’t have a private foundation. How do you do your giving?
PE: Most of my giving right now is through my Fidelity Charitable Gift Fund, which I like. It’s very time efficient. Less paperwork. I like managing it. To me it’s less important which [financial institution] I use but I like going through an existing vehicle. So that’s worked out quite well, but I’m impressed with the people involved in the Boston Foundation. I’ve been to networking events there; I meet Boston Foundation people at different events that I’ve gone to, and it seems like a great organization.
TBF: Can you talk about Pledge 1% Boston, a movement that you have joined?
PE: I think [pledging 1 percent] is good at a minimum. For my personal wealth that I’ll make from my latest company, it’ll be closer to 90 percent that I’ll give away. But the 1 percent is what the company will give away.
TBF: One percent seems like a fairly painless number for most people to get started with.
PE: Yes. And if a company ends up doing well, that can be meaningful.
TBF: I’ve read that you are interested in encouraging new entrepreneurs to get involved and give. How do you do that?
PE: Well, hopefully the Pledge 1% effort itself will be in the news a lot and people will hear stories about it, and I also hope the companies that have already participated will talk about it all the time. When I advise young entrepreneurs, I tell them that they should sign the pledge as well, that it’s easy to do when you’ve incorporated the company because before you have investors you’re the sole owner of the company and at that point you can do whatever you want with it. It gets trickier as you gain more and more investors because you have to get all the investors’ approval to get it done. So I encourage people to get it done on day one. And while one percent of a startup is worth zero, or maybe a negative amount, when a startup is successful—and every now and then one is really successful—it can be pretty meaningful.
TBF: And even just that gesture may be somehow contagious to the community.
PE: Yes, I think so. It also is an example of kindness at a company. And if you have a bunch of things you do that are motivated by kindness, it creates a nice culture at the company. Pledge 1% isn’t all that a company should be doing in terms of nonprofit involvement, but just one thing. It can lead discussion though, around what nonprofits should we give to? Or what else can we do other than the 1 percent? You know, should we have a day off of work where we all get together and work at the Pine Street Inn or other organizations in the city? So to me, it’s one of many steps that a startup founder can take to make sure that compassion and kindness are always on the agenda.
TBF: That’s awesome. Do you have any guidance for organizations in finding their cause?
PE: There are two ways I use employee input for in my companies’ giving. One is I like donating to causes where my employees have prior history. If you have an employee who’s giving not just money but—in some ways more importantly—if they’re giving their time to a particular nonprofit, they’ve already vetted it for you and they have some passion and knowledge and expertise about that given nonprofit. And I think it’s nice for a company to support nonprofits where their employees are involved. The second thing is, sometimes your employees can get together in a committee, either large or small, and decide on general areas they want to invest in. For example, if the company’s in the city and employees encounter a lot of homeless people, they might want to say, “Let’s learn about this and see if there’s something we can do as a company.”
Once you’ve identified an area that resonates with your employees, then it’s a matter of meeting as many people as you can who work in that area; when you meet the person who’s the right one for your company, you’ll know. And then you back that person and bet on them. I’m a big believer—when I invest in startups—in investing primarily based on who the founders are. Do I believe in them? Are they compelling? Can they hire? Are they ethical? Are they good leaders? When I find a tech startup founder who matches my criteria for what a back-able founder looks like, I invest money in them. The same thing goes for nonprofits: If they fit an interest of mine and I’m impressed with their leader, I write them a check and then I go away. I try not to get in their way.
TBF: Was that the case with Jim O’Connell, here?
PE: Yes. Jim’s the chief medical officer here at Boston Healthcare for the Homeless. I met him through a friend, and I’ve been able to go out on the night van with him a few times and it’s quite a remarkable experience.
TBF: So homelessness has struck a chord with you. Do you see other big areas or problems in Boston that entrepreneurs should be considering?
PE: Well, there are probably many but companies have to find what works for them, and there are two questions involved in that. One is how do you find an issue that connects to your team, and the second is when you find an issue, as a leader of a company what do you do on that issue. Well, you give money, you raise money, which is really important. But there are other things you can do in addition to that. On the first question, I would poll your workers and see what they’re involved in. Most likely your workers are already involved in different nonprofits, and I would use their involvement for discussions. I’m kicking off something at my company where we’ll let employees present at a brown-bag lunch to the rest of the team about their particular nonprofit. Just taking turns to educate the company about different nonprofits and to begin the discussion. So I would start with the employees.
I also like doing two types of giving: local and international. Local because it’s connected to your team. And international just because—as an investor in the stock market you learn to diversify and do some small cap, some large cap, some international, some domestic—and as an investor in nonprofits you should be diversified as well. I think everyone should have a local portfolio and an international portfolio. For some people it should be 20/80; for other people it should be 80/20. You just need to pick the number you’re comfortable with; how much you want to give locally and how much internationally. And then find leaders that you trust and throw money at them.
I know I mentioned this earlier but when you find a leader you like, write them checks first and ask questions second. A lot of donors are pretty annoying in terms of how much burden they put on the nonprofit leader. My whole thing is either you trust them or you don’t. If you trust them, you should write them a check. If you don’t trust them, you should go find someone else. When you write them the first check, it could be smaller, you then can see what they do. You might start by giving someone, let’s say, a $10,000 check and see what they do with it. If you like them at the end of the year, then you can write a much bigger check.
TBF: If you don’t mind saying, what’s your balance between local and international?
PE: I’m probably… maybe two thirds international, one third domestic. Or two thirds international, one third Boston, specifically.
TBF: Do you still have a lot of family in the area?
PE: I do. I’m one of seven; six of us live in Boston and one lives in Berkeley, California.
TBF: And your company Lola is here, right? Are there other things you‘ve got in the works now?
PE: Oh yes! I’m always involved in a lot of projects. Most recent is a newly formed nonprofit, the MLK Boston (now Embrace Boston) organization. I’m working closely with the City of Boston, as well as a board of amazing advisors and contributors, to bring a world-class memorial to the city. I want this memorial not only to honor Martin Luther King Jr.’s legacy, but MLK Boston will ultimately also sponsor local events and discussions that will bring his teachings to life.
TBF: That’s wonderful. And great for Boston. So you’ve not been tempted to head off to New York or Silicon Valley....
PE: I love Boston.