It's sad to see so much misplaced cynicism here. If the partners had decided to keep 100% of their carry (as is typical) and used it to buy a bigger house or jet or something, nobody would comment or care. Instead, they've pledged to give half to some of their favorite charities, and some of you are acting as if it's a crime against humanity. Put away your Ayn Rand books (or whatever it is that drives you to such opinions) and go make some money of your own. Perhaps you'll discover that Andreessen and friends aren't as foolish as you imagine.
This is great. Something people often disregard, but which is hugely important, is charity effectiveness. This boils down to measuring the impact that you can make with a given donation: it turns out some charities are literally thousands of times more effective than others.<p>A lot of people don't realise how much good they can do with modest donations to the right charities -- until a year ago I really had no idea myself. There are a couple of groups which I know of which do analysis of charity effectiveness:<p>* Giving What We Can (<a href="http://www.givingwhatwecan.org/" rel="nofollow">http://www.givingwhatwecan.org/</a>) are an Oxford, UK based organisation who estimate that you can save a life for ~£300.<p>* GiveWell (<a href="http://givewell.org/" rel="nofollow">http://givewell.org/</a>) are a US group who do similar research<p>They both publish lists of the most effective charities they've researched, and Giving What We Can have a calculator which shows you how much you can achieve by donating 10% of your income each year:<p><a href="http://www.givingwhatwecan.org/resources/what-you-can-achieve.php" rel="nofollow">http://www.givingwhatwecan.org/resources/what-you-can-achiev...</a><p>I think these stats are astonishing and it's really changed my approach to charity. Worth checking out if you're interested at all in philanthropy!
A stellar example of living your values. I hope this swings more deals their way (it would certainly affect our choice of VC) and creates pressure for the entire industry to adopt similar pledges.
This is why wealthy individuals are better for society than shareholder-owned corporations. If the latter made a move like this, the entire board would be fired immediately.
Giving is great. I wonder if down the road they will consider helping incubate these non-profits to make the return on their charitable investment even greater. They have the expertise of helping companies grow, why not give the money and brain power to help the charities too.<p>A side question, any idea if the contributions are from the firm or the individual partners? I'm curious about the tax break breakdown. If the company is the vehicle for donation, there is a larger ability for a full tax break on the money donated. However, it seems that for an individual, there is a maximum: "Only if you contribute more than 20% of your adjusted gross income to charity is it necessary to be concerned about donation limits. If the contribution is made to a public charity, the deduction is limited to 50% of your contribution base." - <a href="http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=31" rel="nofollow">http://www.charitynavigator.org/index.cfm?bay=content.view&#...</a><p>So, if 100,000 was donated by the company, the tax break would be 100,000. $100,000 goest to the charity and the company has no tax on that income. But for the individual, if the maximum tax break is 50%, then $100,000 goes to the charity but $50,000 was taxed at the individual's income tax bracket (likely 35%+ for these guys) so the 'cost' was really $117,500 to give $100,000. Check my math here, I'm not a tax expert but curious about they are looking at maximizing their contribution at the lowest cost.
It's interesting to note that Sequoia's LPs are themselves largely charities, so money Sequoia makes goes to charitable causes, too. (and I find it unlikely GPs at other top-tier VCs, like Sequoia, don't donate a lot of wealth already...probably not 50% of income, but a lot of famous investors have endowed huge foundations).
This makes me (even more) happy to work for an a16z portfolio company. Though in a long-term and indirect way, more of the product of my work will go toward a great cause.
<i>"... This seems to be the first time that venture capitalists have made such a pledge ..."</i><p>The way Andreessen disrupts continually surprises me.
The emotions of man are stirred more quickly than man’s intelligence; and, as I pointed out some time ago in an article on the function of criticism, it is much more easy to have sympathy with suffering than it is to have sympathy with thought. Accordingly, with admirable, though misdirected intentions, they very seriously and very sentimentally set themselves to the task of remedying the evils that they see. But their remedies do not cure the disease: they merely prolong it. Indeed, their remedies are part of the disease.<p>They try to solve the problem of poverty, for instance, by keeping the poor alive; or, in the case of a very advanced school, by amusing the poor.<p>But this is not a solution: it is an aggravation of the difficulty. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible. And the altruistic virtues have really prevented the carrying out of this aim. Just as the worst slave-owners were those who were kind to their slaves, and so prevented the horror of the system being realised by those who suffered from it, and understood by those who contemplated it, so, in the present state of things in England, the people who do most harm are the people who try to do most good; and at last we have had the spectacle of men who have really studied the problem and know the life – educated men who live in the East End – coming forward and imploring the community to restrain its altruistic impulses of charity, benevolence, and the like. They do so on the ground that such charity degrades and demoralises. They are perfectly right. Charity creates a multitude of sins.<p>There is also this to be said. It is immoral to use private property in order to alleviate the horrible evils that result from the institution of private property. It is both immoral and unfair.<p>~ Oscar Wilde<p>You would think smart men as these would want to cure the disease instead of curing the symptoms.
Though I'm not religious, there's a specific set of bible verses I think of when I see news of someone being publicly charitable:<p>1 Take heed that you do not do your charitable deeds before men, to be seen by them. Otherwise you have no reward from your Father in heaven. 2 Therefore, when you do a charitable deed, do not sound a trumpet before you as the hypocrites do in the synagogues and in the streets, that they may have glory from men. Assuredly, I say to you, they have their reward. 3 But when you do a charitable deed, do not let your left hand know what your right hand is doing, 4 that your charitable deed may be in secret; and your Father who sees in secret will Himself reward you openly.<p>--Matthew 6:1-4<p>I think it means that the spirit of charity is purest when it is anonymous.
I am frankly a bit saddened by this. These guys are some of the best in the world at deploying capital. Humanity would be better served if they continued to invest their own money. Now these guys half-work for some charity, and when the charity doesn't deliver great results, they will feel like they are half-working for little results.<p>It is a mistake for the best capital allocators to pledge future earnings. They should pledge their future wealth, not earnings. This way, the harder they work and the more earnings they successfully redeploy, the greater the contribution to charity.
Bah! Entrepreneurs should reinvest their profits into more businesses. Profits are the reward you get for serving society effectively. Society would probably be better served if Bill Gates, etc. reinvested their cash instead of donating to charities. If charities actually cost-effectively served society than they would be a business instead!