SPEAKER_01 0:12

You're listening to the Philanthropisms podcast with Rodri Davis. Hello, you're listening to the Philanthropisms Podcast. This is the podcast where we try to put philanthropy in context. I'm your host, Rodery Davis, and this week I'm in conversation with Glenn Galitch. Now, Glenn is the CEO of the Stupsky Foundation, a spend down foundation based on the west coast of the US. And someone who I've been meaning to talk to for a long time, because many people over the years have suggested that I should talk to Glenn or that we should get in touch. So it's great to have a chance to sit down and talk to him. And we were talking particularly about a book that he's had recently published, and that book is titled Control: Why Big Giving Falls Short, and is based on his years of experience working both at Stubski Foundation and before that at organizations like The Philanthropist Workshop, and about his kind of change of heart over the years in terms of how he thinks about big giving and some of the challenges, particularly that he sees around it. So we talked about that, about why he'd uh written the book, what the background was to it, what he kind of hopes people get out of it. We talked also about the idea of control, uh, as the title of the book suggests, and this idea that there's a kind of the main problem that Glenn sees at the heart of philanthropy is that too much philanthropy is based on this kind of mindset of control and why that is. Uh, and in part it's about the the ongoing and long-standing problem of kind of conflating wealth with wisdom and thinking that those who have large amounts of money or assets also have the knowledge that will solve social problems. We talked about what it means for donors to reject that mindset and what it means to take more kind of trust-based approaches, uh, and whether some of the trends towards that are ones that we should look on positively. We talked quite a bit about an idea that Glenn comes back to again in the book, um, around the idea that actually it's a mistake to view philanthropic assets, particularly the money that sits in foundation endowments, as private, because to an extent they're kind of publicly subsidized, so they should be seen as public assets. Um, and we probed a bit kind of what the thinking was behind that and and how that applied to the arguments that he's making uh in the book. We talked quite a bit as well about the the broader topic of criticizing philanthropy from within and sort of why it is important to scrutinize or critique philanthropy, but some of the challenges that come from doing that as somebody who is not standing on the outside just kind of shouting uh and throwing brick bats, but as somebody who continues to work in the field. And I was really interested to hear about Glenn's experiences and what he'd learnt, particularly uh through the experience of publishing the book, about uh how to do that critique and that criticism in a in a way that is productive and positive and gets received and it effectively has the um the kind of end result that you want to see in terms of driving change. Um, we also talked a little bit about uh the context around family foundations uh and the questions around perpetuity and spending down, because uh obviously, as I mentioned, the Stubski Foundation where Glenn works is a spend down foundation, and he's been very kind of vocal over the years about why he thinks that we should shift away from a norm of perpetuity towards one where uh organizations with endowments have limited lifetimes, uh lifespans and are seeking to spend down. So we talked quite a bit about why that is. Um let's get into the conversation in a minute. Just a couple of quick notes. One is that you will hear that on the recording I have a pretty horrendous cold, so apologies for sounding quite so congested. Um, luckily, I'm not talking an enormous amount, it's mostly Clen's, so it won't be too offensive to you. Um, the other one is that there's a slight change in audio quality, particularly in terms of my microphone partway through. I don't think it's really made a difference to Glenn, but uh it actually so happened that while I was sitting there with a very um thick head cold, the uh we had an issue with the audio part way through the conversation, which really wasn't what I needed at that point. Uh but Glenn was very gracious and we managed to get the uh issue sorted out. I switched microphones and we recorded the uh the last bit of the podcast. Uh so it all worked out fine, it's edited together okay, but there's just a slight difference in terms of how I sound, which when you hear it, you might think, oh, what's happened there? Somebody opened a door or something like that, but no. Um, so just a peek behind the curtain for you there. So without further ado, let's get into the conversation. Uh I really enjoyed this one. It was great to have a chance to talk to Glenn. Um I hope you'll really enjoy it, and I will be back at the end for the usual bit of housekeeping. Okay, great. Well, I'm here with Glenn Gallich. Hi there, Glenn. Hey, how are you? I'm uh well, very good apart from as I was just saying before we came on the cold, but hopefully that just makes me sound all husky and yes, you've got a radio voice. A voice radio. Nice to go. Well, it's good, it'll it'll encourage me to speak less, which is exactly what this situation requires anyway. Oh, is that how it works? I guess that's it. Yeah, well, I feel like that's my job anyway. Um great. Well, it's brilliant to have you on the show. I've known about your work for for ages, and many people over the years have sort of suggested to me that we should get together and have conversations. It's really great to have a chance to do that on the podcast. I'm very happy to be here. It's very happy to have you. Um and yeah, as I said in the intro, so people should already know, you are the CEO of the Stubski Foundation, but also more importantly, for the purposes of this conversation, uh the author of a new book uh titled Control, Why Big Giving Falls Short. So um that's kind of the sense piece of what I wanted to talk to you about today. Um so maybe the best place to kick off, I think, whenever somebody's written a book is just to ask, what was it that led you to write this book? Uh, who do you hope reads it, and what do you want them to get out of it?

SPEAKER_00 6:27

Well, you know, I I've been in this uh well, let me just say we call this world that we work in philanthropy. Your your show title strongly uh suggests that. And what we typically talk about, at least what I typically talk about, is a very small percentage of what is philanthropy in the United States. And that's the foundation sector. It's about 20% of U.S. giving. Overall, Americans will give about $600 plus billion annually, but of that, the bulk giving coming out of these institutions is about $100 billion, a little over $100 billion annually. But they're sitting on uh and investing about 2.2.2 trillion, $2.1 trillion annually and growing. We we expect the next 20 years for it to grow to about $18 trillion in assets. And so the question I've always had and had going into this book uh is why? Um why? Why is it only $100 billion a year? Why is it $100 billion a year in giving and $2 trillion invested in hedge funds, private equity, and equities, which are working in most cases against the mission of a foundation. And so that's what led to writing the book. I ultimately, I believe the destination I think we're all on, but I am checking in on this often. But I think the destination we all seek uh is is is a world where the organizations that actually do the work, what we typically refer to as nonprofit organizations, although foundations are also nonprofit organizations. Terminology gets very confusing. But for organizations that provide services and products and advocacy, I think our objective, the destination we want to get to is a place where they are well funded, well resourced, sustainable, and able to do the work that funders fund. I think that's where we're trying to go. But when you look out at that world, especially today, you find that it's well under-resourced. Leaders of service and product and advocacy organizations are leaving their jobs, they are burning out out there, and the constituencies and communities that we hope they will serve are not being served to the degree that they need. So why then do you end up in this very odd dynamic where there's two trillion dollars in resources intended for those groups and it's not getting there? And in my view, and what I talk about in the book, it has to do with the system we've set up, the people that we've put in charge of giving this money, and how they go about doing it. That ultimately, uh, in an irrational outcome, as there are so many in the world of politics, uh, we underserve the communities we'd hope to support.

SPEAKER_01 9:10

Yeah, absolutely. And and a key part of that in the book is this thing that you identify as the mindset of control. I think we'll dig into that a lot more, but maybe you could just say what what is it you're talking about when you talk about this mindset of control and why is it so prevalent in this world of philanthropy that we're talking about?

SPEAKER_00 9:27

Yeah, so the US operating system for foundation giving goes back to Carnegie. Many people have written about Carnegie. He uh has a very um famous essay called The Origins of Wealth, and out of that you get the layout, which is that according to Carnegie, people who make a lot of money are really special people. People who don't make a lot of money are not as special. And so the people who make the money owe it. It's an obligation to make sure that those who are not as special have resources as well. His reasons for that, I think, vary from like, you know, not wanting suffering to watch out, they're gonna come and get you, which is not wrong. Historically, we've seen that when wealth gets concentrated into the hands of a very few number of people, that's usually a trigger for the end of that society and a new one has started. So he's not wrong in thinking that way. But that viewpoint of like, you know, we're gonna make this money, we're special, and we're gonna give it, and we're gonna give it because we know more. It's great that he had that viewpoint. Today's uh wealthy, uh many of our most wealthy individuals today completely dis disregard any sense of giving. From Mark Andreessen to Peter Thiel to Elon Musk, they see their mere existence on the planet as philanthropic enough. So he at least thought, hey, I can be this way. But what we what he argued for is that he gets to give it, he gets to determine where it goes, he knows what's best. And we as Americans bought into that idea and created a system where not only are we going to say, hey, thanks for giving it, thanks for giving it the way you want to, but we're gonna give you a tax incentive for that, which we're gonna call foundations. Um, it's actually not called that in law, it's a 501c5 structure, but it is still, it is a de a deal we've made with very wealthy people that if you give into this structure, we will give you as much as a 70% tax exemption, which has an enormous impact on the amount of taxes they pay. And that is unique. We only do that for wealthy people. And so, what's the signal we send? The signal is if you give it, you you control it, you decide. And they do, and uh they have every right to. They they they we have told them not necessarily in law that they have this power, they write their own laws. We call them bylaws. Every foundation has a bylaw. Typically, in foundation bylaws, as you would expect from a controlling mindset, they name the foundation after themselves, they govern the foundation with them on the board, written into the bylaws and their kids, and they make it very, very hard to unseat them and to um put other people into positions to make decisions. And uh so what you end up with, which is just a cut to the chase, you end up with a lot of money in the hands of a lot of people that are very, very far away from the communities they are set to support. And that leads to some outcomes that I think are substandard for what we should be able to get out of this interesting charitable structure.

SPEAKER_01 12:29

Yeah, absolutely. And in terms of what some of those knock-on effects are, that this this mindset of control that we've we've kind of uh has come about for for various reasons that you identify there, what are some of those things? And does it link to you know what you've already said about the fact that there are an enormous number of assets sitting in the endowments of uh foundations, for instance, and only a relatively small amount of that going out in um uh in grant making each year, or again the fact that those uh endowment assets are invested largely in kind of for-profit enterprises or industries that might run counter to uh to the mission of the organization. Are these things, you know, do these follow on from that starting point of this mindset of control?

SPEAKER_00 13:11

I think the biggest thing that comes of it is uh what I what I really talk about. In the book, I have a spectrum on there that goes from excessive donor control on one side to community engagement on the other. And I've been reframing that a bit more because I I've been thinking about it. And I really think what happens is this mindset of control encourages the system encourages and incentivizes what I would call private stewardship of quasi-public dollars, right? So when when you've got 70 cents on every dollar in a foundation coming from the American people, then you're really talking about a pretty high incentive to do things for the public. I argue it's an obligation. And that means that if you're acting on those funds, you should be, I, in my opinion, you should be coming from a place of public stewardship, asking the question, what does the community need? What is the community telling us that it needs? And making decisions about how that money moves based on that. But what you tend to see now is that it's private mostly. And what types of things do wealthy people seem to want? It's you know, I think Americans are getting a heavy, heavy dose of this from our presidency. They like putting their names on things. Uh, there is something about legacy for people, for wealthy people in particular, that's very, very important. You know, if you just take, for example, I'm not picking on anyone in particular, but you know, we have a company here in the Bay Area that's been well known for decades called Hewlett-Packard. So both of those families, the Hewlett's and the Packards, have very prominent foundations, multi-billion dollar foundations. And to them, what's really important is their legacy. Even though there's a company called Hewlett Packard that you can't avoid if you want to have a printer in your house, which is just reminding you every time you print something, Hewlett Packard. There's the legacy. Their legacy, they want in that foundation, which leads to our biggest challenge, and it's called perpetuity. So most foundations, when they are created, they are created and immediately like without there's no requirement of this, there's no uh law about it, but there's just an instant view that we need to be here forever, forever. And that is the probably the biggest controlling factor. If the minute you sign on to that one, you have entered a world of irrationality when it comes to social finance that I cannot honestly comprehend. I've never been able to get my head around it. And some of the most prominent leaders in the foundation sector, perhaps the most prominent prior to Darren Walker kind of taking the reins at found at Ford, was Larry Kramer at the Hewlett Foundation, who is a major proponent of perpetuity. And his argument was and is that you need to be around the Hewletts of the world, are so important as institutions, and we need to be around to deal with problems in the future. And then I always put a parentheses on that, even though we're not really addressing the problems today. And so, and an example of that actually, he wrote an incredible memo to his board before he left Hewlett. Public memo arguing that neoliberalism, which is the guiding uh paradigm of our economic system globally, has lost its way and it's having a negative impact. And it's just this very, very powerful argument he makes that we need to spend the capital to invent, design, and put forward a new economic system. And this is why, right here, philanthropy comes up short. At the end of the memo, he says, and that's why I need $10 million from the board to do this work. This is a, I think they're up to $12 billion in assets, and this is where the mindset of control just goes wacky. He's in a position to punch to take what six billion. I mean, if each if he were to if the Hewlett Foundation were to be on record for having transformed the economic system, my bet is that if you ran the numbers on that, it ain't $10 million. Be my guess. But when you're dealing with that compressed budget of 5%, which is the minimum you're required to give away in the United States, most of your largest foundations in the country give between five and five point one percent annually. They're sitting right at the minimum. If you're living in that mindset, 10 million probably seems like a lot of money. It's a big chunk out of your 5%. Uh but in the world that we all live in outside of the foundation, it's pocket change. It's not going to get us anywhere. And as a result, you haven't seen a new economic system start, you know, brought to you by the Hewlett Foundation. So, and this is very common. Some of your biggest leaders, biggest names in the foundation sector will write eloquent pieces about the cliff that we're about to fall off of. You know, I remember MacArthur came out and said that if we do not stand up for local journalism, democracy will end as we know it. And that's why of our $9 billion in assets, we're going to give $100 million to launch Press Forward, which today has raised $400 million to save a local journalism which is going off the cliff. So it's always big, big, big uh vision, which is amazing. And I credit all of them for seeing these things and writing incredibly powerful and eloquent arguments. And it's always matched with very little money.

SPEAKER_01 18:37

It's really interesting. Um, and I definitely want to come onto this question, particularly around perpetuity um and why that is such a sort of dominant mindset and what the alternatives are. Because I know the organization that you work for, Stopsky Foundation, is one that has kind of gone in the other direction and taken a spend down approach. Um but I really want to just kind of pick up first on this idea that um the assets in philanthropy, particularly in foundations, are not uh private assets, and maybe that's the kind of starting point for making the mistakes that we do and getting into this mindset. Does that argument sort of is it specific to uh foundations or to the situation in which those assets are tax advantaged? So there is some element of public subsidy in them? Because I just I'm interested in the sort of the counterfactual of if you assume that a donor was was just giving in a way that didn't take advantage of of uh tax incentives, um, you know, perhaps through an LLC or just just as a kind of straightforward donation and chose not to, would the argument would that be fine and the arguments wouldn't apply, or is there also an element of it that is about the idea of of uh assets that are supposed to be directed towards the public goods, separate to the question of tax subsidy?

SPEAKER_00 19:46

I love this question. I typically don't get into it because we can immediately get very confusing very quickly, but let me be really clear. And my friends at the philanthropy roundtable always slap my hand on LinkedIn and other places when I refer to them as public assets, and they're not wrong when I when they do that. So I always have to say, I'm sorry, here's what I really mean. They are not public assets, they are private. My argument is when you are taking in 70%, when the bank account holds 70% of what would have been public money, in my mind, that's public. Now, absolutely, if the governing board of a foundation can do whatever they want within the laws, which are very limited, with that money. Um, so uh, but my view is that you know the counterargument to me is, well, and you know, what about mortgage incentives, for example? Like the government gives people a tax benefit when they take a mortgage to encourage people to buy homes. Well, what do people typically do when they take that tax benefit? They take a mortgage, and what do they do with it? They buy a home. Why is it when foundations get a tax incentive, they put it into hedge funds and private equity? That's not the intention. The intention is to move the money to charity. The thing I think, you know, just to take a big step back, the part that is is hard to get I I mean, I work, I've worked in this stuff, and I still find myself spinning on the weirdness of how this all works. But at the end of the day, and this will get to your other question, what we're talking about here is a donation or a series of donations that if there was not an intermediary player getting in the way, the money, I mean, watch what Mackenzie Scott is doing. McKenzie Scott, who is the ex-wife of Jeff Bezos, big settlement when she divorced him, she's got billions of dollars, and she's moving it directly to organizations. There's no intermediary in between. There's no donor-advised fund, there's no intermediary group, there's no foundation grabbing the money before like the money's floating on its way to an organization that's going to use it to do something in the world. And these foundations come up and grab it like a like that creature from Empire Strikes Back out of the grab the money and it holds it and then trickles out in 5%. Amounts and then worse is invested in hedge funds and private equity and worse. And so that structure, to me, it says, look, if we're doing this right, and I'm obviously putting a right wrong on this, but if you're doing it, I think in the best way possible to meet the destination, the money actually makes it to the destination in total. It doesn't get grabbed in between. So that's why I think there's an obligation to take a public approach. Now, to your question about private, let's take a Mackenzie Scott. I actually feel that if it is your private money, I think there's a lot, there's a lot of writing and a lot of theories and a lot of um perspectives in the state of California, we're about to potentially pass a significant one-time wealth tax on billionaires because they're not returning, they're not giving back. But I do think that if it's your private money, you haven't taken any public money on it, you have far more latitude to move it. Now, the irony of this, the irony is that a friend of mine, Ludovic Blaine, who runs the California Donor Table, always says, When you give your money to a foundation, there's no longer something called an unrestricted grant. The moment it gets to a foundation, it is restricted. It is restricted in the ways you can use the money. And the only person that benefits from that restriction is the donor. The recipients actually don't. They can't use it to make to build a building, they can't use it for lobbying, they can't use it for campaign work. It's got to go to a specific set of things that are within the laws of a 501c3 structure. If you take out the foundation and you just give the money directly from your bank account, you have wide latitude. You can give it to political campaigns. You can you can do lots of things with the money that you can't do with a C3, and you do not get a tax benefit. So it's not in the donor's benefit for that. It's and it's much more in the grantees' benefit to get the flexible money. So it's it's kind of it's interesting because there's a there's like if they give it to a foundation, then in theory it doesn't play out this way. Most of the money should be going to good things. But in a private setting, you can't get a guarantee it's going to go to good things. It may not even come out at all, but it's more flexible when there's not a tax basis involved. I if the more I think about it, I just start getting really, really confused. I'm sure your listeners are too.

SPEAKER_01 24:20

Yeah, well, I think it's really, I mean, I think my listeners are used to try to have their heads slightly kind of uh you know mashed about things to do with the the ins and outs of tax law and philanthropy. Um so hopefully they're still with us. But I I'm really interested in what you're saying, because in a way, like we hear a lot of concern and sort of criticism about the shift of some donors at the elite level towards sort of moving away from traditional non-profit structures like foundations and embracing things like LLCs, the kind of limited liability companies. Actually, you know, normally that's framed as this is a bad thing because there's less accountability and less transparency. But is is there an argument that in some cases actually we should look favorably on that because those sorts of structures might allow for precisely the kind of flexibility that you're talking about and actually aren't necessarily introducing those perverse incentives that a foundation does to kind of just stick the money in the middle and then dribble it out over a very long period of time?

SPEAKER_00 25:17

I think if people are really going to give the money to society, and it depends on how you look at it, you know, there are very, you know, arguments around how these people make money is very extractive and you should give it back and all of that. There are these really interesting programs for wealthy people like the Enough Project and others, where you're basically asked the question, what do you need to live? Turns out most people don't need several hundred billion dollars to be able to survive. You could peel that off and give it to society, maybe give it back to society depending upon your viewpoint. But the question is, will they? And you're talking about, you know, what I was thinking about this over the weekend, I was thinking about some of these donors. You're talking about people who set up a foundation because they fundamentally do not believe that the American people should have this money, right? They they are tax avoiding. That's the point to a foundation. It's part of a suite of opportunities that wealthy people have to get their total payout to the American people down to zero. You may remember one of the first debates that uh that Donald Trump had with Hillary Clinton. She pointed out that he never pays taxes. And he says, That's right, I'm smart. I'm smart. There's a guy who wants to run the country. Uh, and that that because of that, we offer enormous tax benefit to people who want to avoid moving any money to the government, and we're asking those very same people to help us with our social side. I doubt that many of the types of characters we're talking about are going to move that money. So it is it, we're we're kind of trapped if we want to see wealthy people in a system that is rapidly transferring wealth up the chain. Um, you know, this is a really important report that I just can't say enough about. But the RAN Corporation put out a report in 2020 and then revised it last year. And the American economic system since 1975 has transferred $80 trillion of wealth from the working class to the 0.01%. $80 trillion of wealth has transferred. That is, we are on a path to the end. That there is that is not sustainable. Do the numbers, run the numbers. I mean, how long can you go on that trajectory? So we really we're gonna get to a point where like we desperately need those who have accused that that the system has granted this money to to do something for us with it. And so I get the sense that we have to put tax incentives and other things because they hate giving to the American people, one way or another. So, how do you get them to do it without taking more aggressive action? That's what we've been trying to do now with this system. Uh, I just don't trust that they'll move it. Um, so I'm I'm I'm I feel as trapped as anyone. If we have to have foundations, then that's why I wrote the book. Look, if we're gonna have these things, then the people that are governing them, one way or another, have to find a place of public stewardship and start moving the money. It can't sit here like it is. And uh that's that's basically it.

SPEAKER_01 28:03

And and one aspect of that that we've already talked about and I'd love to come back to is this question of perpetuity. As you mentioned, there's no requirement, it's not a legal requirement that when you set a foundation up, it has to be perpetual and actually are perfectly entitled to set it up with a limited lifespan. First of all, you know, why is it that we've got this weird default where things exist in perpetuity? And for you, would it be what's what's the desirable end goal? Is it that we just kind of shift the norm so that at the starting point is maybe people could set things up over the very long term or in perpetuity if they wanted to, but they don't assume that that's what everybody does. And so we kind of shift it the other way, and you have to go out of your way to justify that decision. Would that be enough? Or do you think we need to kind of get rid of the very idea of perpetuity and and sort of make it so that that's not a possibility anymore?

SPEAKER_00 28:52

Yeah, I like to look at it a little differently, and I know if you go back and read things I've written and things I've said, uh you you will hear what many have referred to as the spendout guy talking. But if I I really try to come a little bit upstream and just say if you are really listening to communities and what they need, then you, in my opinion, are in you are obligated with this public, much much of this public asset to move money to what communities need. Again, thinking about the destination, what's the journey to that destination? And it starts with going out, getting an understanding, hiring people coming from communities, can tell you what they need. Most communities, when asked, would you rather have 50 cents or 70 cents on a dollar or five cents on a dollar are gonna probably tell you, I want to have 50, 70. They're not gonna say, give us a nickel, and please then invest the 95% in companies that are gonna destroy our community. So it starts there. If you are really responding, I mean at the Stubsky Foundation, we have five values. One of them, the one that just rises to the top for me is responsiveness. And if you are being responsive as we have tried to be, it is impossible to stay in a five percent, six percent, I would even argue ten percent paradigm. You know, again, just think about it on a dollar basis. If you go to a community leader and say, hey, we could give you a dollar, but we might need to, we we're thinking about it. We might go from five to ten cents on the dollar. Is that gonna help? I mean, it you can just it's if you break it down to that degree, you you if you were running a nonprofit, you would never say, I really want to have well, some do, but I they I doubt anyone's gonna say, I want to have you around for a long time giving me five, a nickel or a dime as opposed to giving me the dollar or giving me 75 cents. But um, so that to me is the starting point. At every, in my opinion, at every barrier that comes up for foundations, for individual donors, for anyone that's trying to get to that destination of a place where found where organizations have the resources to meet what communities need, there are barriers along the journey to that. Almost all of them are in our minds. Almost everyone is in our mind. And and standing there wrapped around that barrier is some very controlling player who's arguing against the destination or that step in the journey. And so it to me, perpetuity is a major barrier, and it's a psychological one that uh it gets written into the bylaws of these foundations, and then typically boards are not comfortable changing the bylaws, even though they can all change the bylaws. That's the first one.

SPEAKER_01 31:46

And no, I think that's yeah, it's really interesting. And it while you were talking, it made me think of one of these the the other kind of bits of received wisdom that occasionally comes to the foreign philanthropy that that I think is problematic, and I'd be really interested in your views on it, is this idea that you know you have to exist in perpetuity over the long term because it's very difficult to give money away effectively. And so you and actually, you know, which runs counter to what you're saying, which is you know, actually, if you ask the people and communities that that are kind of there on the ground what they need, they could perfectly well tell you, and you could distribute very large amounts of money now. Why, why in your mind is there this gap between that reality and this reality that you often hear from donors or foundations of, oh, this is very, very difficult, so we need to do it very slowly and in small increments.

SPEAKER_00 32:30

Yeah, I mean, I think it's that proximity issue. They're far away from most people that sit on these boards are far away from the the communities they're trying to help. I think that I think there's a narrative in the minds of some of these people that, you know, we we're special, we got here, um, and uh, you know, they're not, whatever that means. And I that's why I think the Carnegie story still is pervasive across, it's amazing. It's like been 150 years, and this guy's mindset still rides through all of all a lot of philanthropy. Like, we're special, they're not, we can't trust them. What are they gonna do when they get the money? They're gonna waste it. You know, like we are just now, I think, finally starting to get over what was a classic problem uh for years is that nobody wanted to fund what they called overhead in an organization. You know, like there's a the charity navigator, one of the wack-adoodle of all measures was like the less they have operations, the better the philanthropy. Like the money was just supposed to come to an organization and float out to the world. Like there's not supposed to be anybody working there that actually does the work with the money. I it just it's baffles the mind. Like all of these things baffle the mind to me every single time you confront it. So that that view that we what you end up with then is this like spiraling downward situation, right? Because a lot of there's this whole process, crazy stuff. A lot of these foundations are like they have teams of people that do so-called due diligence. Like anybody knows really how to do due diligence on a social financed organization, but they tell you they do, and that's how they justify being around. It's another barrier. Like we need to have teams of people that are doing due diligence. And what do they look for? They look for like operational competence, they look for capacity, they look for people who are managing the money well within the organization, but they don't want to pay for them. So you get in the spiral. They get there, they say, Well, there's no one here that manages the money well, so we can't pay for you. Well, guess what happens next? That no one's ever there to do. It's completely crazy. It really, really is. And that's why for me, the argument is in my in my book is really to go after that psychological and behavioral stuff. Because there's so much money in the hands of foundations now. We saw this last year when the government tries to put any policy, and some of them I fundamentally disagree with when they go after foundations, but I do pay attention to what happens when one shows up. With two trillion sitting in a bank account, foundations might not be so willing to give that to the community, but they're very willing to use it to fight because that's the one time you can in the law. If a foundation is under some kind of policy attack, they are able to use their own assets and their people to go after it. It is gonna be brutal to try to get a policy change with both the finance sector, which is just cannibalizing this money, from investment firms to estate planners and the sector itself. It's just gonna be really hard. So we have to, in my opinion, you just have to really go after these weird irrationalities that I just just speak of human psychological challenges.

SPEAKER_01 35:44

Yeah. And I guess, yeah, part of it is just bringing those to light and making people aware of them. Yeah, and and which brings me to something I wanted to ask. I'm really keen to sort of, as well as the specific kind of elements of the arguments that you make in the book, um, just talk a bit at a kind of meta-level about the the idea of what it means to to sort of be a critical voice within philanthropy, because I know it's something that that you've sort of done within your work, but but not as an outsider, which I think is the interesting thing. Like it's quite easy to stand on the sidelines or outside of philanthropy and just kind of throw, you know, rocks at it, and plenty of people do that. And sometimes that stuff's really important. But I think to kind of to remain within it, working within the field and yet see its flaws and try to kind of highlight those is a different kind of challenge. I'd be really interested in your sort of perspective on what you've learned through the course of doing this book in particular about playing that role and kind of how you can get some of those critiques across critiques across so that people hear them and are kind of receptive to them.

SPEAKER_00 36:46

So I think there are two issues for me. One is very personal and one is just very sector-wide. And one is that I have a challenge. Everyone who's ever worked with me from a communication standpoint always says, you know, you're such a nice person when I talk to you, but when I read your stuff, I actually had a person say to me at a at a conference, we were talking for maybe like five minutes, and she finally went, I walked up to you just to find out if you're that big jerk that I always see on LinkedIn. And you're not. Like, why? What's wrong with you? So I have work to do there. I have had many people say that at times I can be insulting and other things. And I do think there's an element that I can everyone can always get better, right? So I will I admit that. Now, very closely related in a Venn diagram is a culture within the work of nonprofit people. And um, my friend Elise Belusa, who runs the Terra Health Foundation, has done an extensive amount of thinking and writing about what she calls the culture of the good. This desire to always be good, to be seen as good, to be appreciated as good, to be honored and celebrated for being good, that is really pervasive in our sector. And the I think the downside of it, to get to your question, is that um there is a disincentive to be constructive, critical, uh in debate about how we operate. Any any attempt to criticize is seen as a that on the other side of that criticism or that feedback, it's taken as you're saying I'm bad. So I want I put the probably the the most I've experienced this was uh there was a week that happened right day the very same week that this that control came out. It was uh the book came out coincidentally on St. Patrick's Day. And that week I went to several, I don't know why this happened. There was a conference in town in the Bay Area, I think. But I was at, I don't know, maybe four or five significant foundation gatherings. And I was struck that almost all of them there was this need to celebrate our courage as leaders. Uh, I think there's like a s true desire to want to be seen as an activist among activists. You see a lot of during that time in particular, ice raids were very uh very present. They aren't so much now, they're they're quiet. You don't, I mean they're not quieter, they're happening all over, but they're finding ways to avoid cameras. But at that time, you know, Minneapolis was going off, and I think there was a strong desire because we are so away from the proximity of community groups in the foundation sector that we wanted to be seen as part of it. So the lot of there were a lot of like panel discussions and things at all these different meetings I was at where people were wanting to celebrate their courage. And they have courage. I'm not denying that they have courage, but I don't compare, I just can't see the courage of someone giving money on the same level as someone who's in the streets protesting, you know, standing in in front of police agents and others. I just don't. Um, and and and the part that really I struggled with even more is that in the midst of all this, what we didn't know then, that we do know now, is that the foundation sector actually grew last year by $150 billion, which is a pretty damning statement, I think, given that so many organizations that we need out there are really dying off because foundations are not stepping up. So while the foundation sector is growing, the broader nonprofit sector, I don't know if we're gonna see that it's shrinking, but it certainly is not growing. So when I've gone out and made comments about we celebrated our courage, but we're not really addressing, my peers take that as being insulting. I've had I had a very prominent foundation leader send me an email and say, I really like you, Glenn, but you can be so insulting. And I took that very hard. I thought, that really wasn't my intention. What was it about what I said? I went back, I actually changed the whole post because people were so upset about this post. Uh I think they were upset about it because I made the post and with it was like a Saturday afternoon, and to my shock and surprise, like 400 people immediately liked it. They I I I tapped into something that the nonprofit sector wanted someone from inside to say. And I think that's what did it, because now they had to respond. And they chose to respond directly to me with a cease and desist order, pretty much. And so um I appreciate the fact that I can potentially I don't know. I I don't take what I write as insulting, but I I imagine there's some element of it that can be at times. But I really, you know, sometimes I just the stuff gets so when you're dealing with such heavy levels of irrationality, I just go back and forth on how do you ultimately kind of shake that out of people? How do you get them to see it? And I can tell you for pretty much across the board, everyone who contacted me, and these are heads of major foundations, almost all of them stood their ground and told me it was my problem, not theirs. And so that that is the hard part of this, you know, it really, really is. Um you don't, you know, uh there's a longer story I could tell, but there's a there's a TV show I I I not it's a it's an Apple TV show about a guy who's a critic of the wine industry, and there's a moment in the show where this old wine critic who's been around a long time is standing in front of him, and he says, you know, you you can be a real you can be a real jerk, he says to this young critic. And he's like, I guess you have to make a decision. Do you want to come to the party and speak with people, or do you want to be the angry guy in the corner that no one cares about? And that is that to your question is really what you're dealing with. Uh, I'm happy to say that a lot of people seem to be taking not just uh people who are interested in the critique of the sector, but I the goal of the of control, the goal of all that we're trying to do with the Stepsky Foundation is to move us along this journey to the destination. And so we're using every tactic we can think of to engage our peers, to engage individual donors, to engage the nonprofit sector, the financial sector, however, we can do it, and we're not big, we're not big. And we're I'm happy with the uptake. I'm happy with the people that want to talk about this stuff. But you know, I am I'm I'm a social guy, I'm a relationship-based person. And I don't, I it has not been enjoyable to have people, rather than engaging me on the conversation, take a defensive position, take it as I'm questioning it whether they're a good person. Everybody in the sector is a good person. Trust me, quote me, I believe everybody's a good person. You're good. There's nothing I'm saying that's going to change who you are as a good person. However, I guess the question is, do you want to get better? And there is just a resistance to that. There's a digging in always. Like you go to a philanthropy conference, we're still doing the same topics we've been doing for years. No, there's never been a plenary session that I can think of that says ask the question Is it okay to invest 95% of your assets in toxic community destroying investments versus mission alignment? Never have I seen that plenary. It's time. It's time. Let's have those conversations. Let's disagree, let's have it out, let's arm wrestle, let's see if we can get to A better place. Let's go through the dialectic of getting to a place where we've synthesized into a better spot. Let's do that. But uh it's hard if if you're constantly wanting to be seen as good. It's just very hard.

SPEAKER_01 44:13

Yeah, I think that's a really important point. And I I think it I mean certainly speaks to something I've long thought, which is one of the challenges is that because a lot of the critiques are about the systems and the structures, it's still difficult sometimes to get that away in in that doesn't feel like a personal attack, particularly if you are somebody who's operating within that system or you're a wealth holder, even if you're very kind of progressively minded and somebody makes a point about you know the problem of uh of kind of concentrated wealth and inequality and and power within philanthropy, you might be willing to go along with that to a very large extent, but at some point it just starts to feel like an attack on you, and that is kind of understandable human psychology, but it does make some of this stuff difficult. It does. It does. And I I wondered as well, actually, whether in your experience, particularly in the US context, do you have any sense that the space that might have been there for engaging with some of these critiques and criticisms that does seem to have grown over the last 10 years or so? There does seem to have been more reflection uh within the philanthropy world. Has that closed down again because there are these other attacks coming from outside politically, and people are sort of getting more concerned and more defensive, and so they don't really want to engage with kind of critical arguments from within philanthropy?

SPEAKER_00 45:25

Uh, I think this time is unique. I'm grateful that it's unique, and it's unique because essentially this recession in the social finance system was um it's the wrong word, but let's call it artificially created. It's not the right word, right? A recession isn't an artificial thing, actual economic recession. A mortgage collapse is not a pandemic, they are not artificial things. They are in many ways human created, is what I mean to say. But this one, the White House merely pulling what we now know is eight $187 billion worth of grants and contracts out of the social finance sector, uh, you know, I think that's the part you're addressing. That's your question right there. When something like that happens, are you, Glenn, in a r in the right spot to be critical at a time like that? And I will say, uh, when it all started first happening, uh, from pretty much the inauguration day, uh, January 20th, 2025, to I would say about Earth Day, there was a really intense stretch of executive orders and threats of executive orders. I definitely pulled down my critique and I joined in with several of these collaboratives that were forming very impressively to stand against what was happening out of the White House. It it it but then once the executive orders stopped and the Congress put forward what has been called the big beautiful bill, uh you could see the bill was loaded with all kinds of stuff intended to challenge the foundation sector. And the tone of the sector at that point, I could see where we were headed. We were going from a place of like, how are we gonna really use our imagination and creativity to help organizations that are under threat, to how do we protect ourselves? And that culture is still very pervasive across the foundation sector, as exemplified by the fact that it grew $150 billion. If it had not grown, if we had seen the foundation sector, if we saw reports right now coming out of the Center for Effective Philanthropy or Institute for Policy Studies that said, Oh my god, the foundation sector responded in amazing ways. You know, the White House cut out 187 billion, foundation stepped up with 200 billion to make up for it. That would have been incredible. But instead, the opposite happened. And I felt at that point it's game on, we're back on. Because this is this is, you know, in the past, when endowments have dropped and pandemic is there and people are freaking out, and you can't even focus on the giving because your employees are wondering if they're gonna have their jobs anymore, and all these things are going on, and I've been through all that. There is no excuse. All of our endowments, if we are in any kind of investment, all went up in 2025 and we did not give at the level that we earned. And to me, that is a travesty of the sector. And uh so I went from kind of like a I'll be quiet to I'm gonna start to get a little bit edgy here to I'm all in on like we have got to face our demons. We have got to face these big barriers on the journey, or we will lose the nonprofit sector, or we'll just get one that's pretty much ineffective, despite the incredible energy and passion and determination and sacrifice that people make to work in frontline entities. We are not contributing to that and meeting their passion in the sector, in my opinion. And I felt very, very motivated to speak about that and continue to. Yeah, absolutely.

SPEAKER_01 49:02

And and I guess it goes to something that you say in the book, which is kind of I think you know, reading it and the the title and the way it's framed, it's easy to just sort of see it as, oh, well, this is clearly just a very critical book about big philanthropy, and to an extent it is, but you also say at many points in the book that you do actually still fundamentally believe quite deeply in the positive potential of big giving. So given that, kind of what is it that continues to give you that optimism? What are the things that you see that make you think, yeah, actually, do you know what? If we get it right, this this is genuinely a kind of force for good in the world.

SPEAKER_00 49:34

Yeah, I mean, I think for one, and this is highly controversial, I'm sure people are gonna roll their eyes when I say this, because when you think about the source of the money, what makes you think for a second that it could be this could be true? But I do think that Larry Kramer's 90% of his memo is is true, that there is a need to rethink an economic system that is transferring so much wealth from the working class to the very wealthy. That needs a rethink. Probably needs a redo, potentially a new operating system. And it's not going to come, in my opinion, uh, without some countervailing force willing to go there. Obviously, and I think philanthropy can play a huge role, and I don't think we are, I think the resources necessary to get there are very much in the grasp of what uh foundations hold uh and will hold in their coffers. Obviously, the major challenge to that is who sits on the boards of these organizations. So that's why when I why I'm hopeful is that I I see this money and the freedom that can exist there as potentially the saving grace uh to to shift a system that is in dire need of redesign. And I also admit and try very hard in control to point out why we're not gonna get there unless we make some shifts, starting with looking in the mirror as a donor and asking, what are you trying to respond to? What needs are you trying to meet? And are you the person to do it? And I don't say that donors have to leave the room, although I think if you're not willing to challenge your own sense of control, if you just if you hear my words and you're like, that guy's a jerk, I don't want to have anything to do with him, if that's what you're hearing and what I'm saying, then I think one of the most wonderful things a donor can do for public stewardship is to leave the scene. If you are so privately oriented in how you're gonna give money, I think you have a perfect invitation to walk away and become one of the best public stewards a person can be. And let other people come in who really come from, understand, and want to be responsive to community. We're gonna put humanity over perpetuity, who are going to put community investment over private equity. All those things are barriers on the road, and people who are capable of getting past those barriers are what we need right now. And I'm very hopeful. Um, I, you know, there have been a lot of books this year, a lot of great books. And that's wonderful to see. You you, as a donor coming into this world, you have to put your head in the sand really deeply to ignore what thoughtful people are saying about how to be a public steward. You have to be so deeply narcissistic and egomaniacal to ignore what's out there. I think, I think, I think there's plenty of fodder for how to get to a place where we can have the kind of institutional philanthropy. And I'll just say, if I were to write another book, and I'm not hurrying to write any more books, but if I were to write another one, I would write on the everyday donor. Because if you look at just the behavior of most people out there who don't get much of a tax break, if any, who simply give within their own communities. And if they give outside their communities, they don't give with restrictions, they don't ask to be on the board, they don't put a 5% cap on it, they give what they can, and you look at the ratio, like what an everyday donor gives versus their assets and their income versus a wealthy person, it's off the charts. There's no comparison. And so I that's that's who I have faith in more than I do institutional philanthropy right now. Yeah, and I think that's a great optimistic note.

SPEAKER_01 53:18

And I think that uh one of the things, again, I've I've been encouraged by in recent years is that sort of renewed appreciation of everyday giving. Not in a kind of patronizing sense of, oh, isn't it nice that people do it, but in a genuine, actually, there's a lot in that fundamental drive to give and to do it in that relatively straightforward way that we should probably take back into the world of institutional philanthropy.

SPEAKER_00 53:40

So absolutely. I mean, I find it it's just very uplifting. I feel uplifted right now just thinking about it on the spot. Uh it it I it's really amazing. And I don't and I and even in a non-ideological sense, right, left-center. I think the people that are giving to the things they truly care about in the US, most of your everyday donors, half of them are going to give to their church or their synagogue or their mosque. And while I'm not a religious person, I admire the fact that they were people are just completely committed on a regular basis to give without restrictions, without due diligence, without all the garbage that foundation, they're reporting. You don't have to show up and get your next trancha money by giving everybody a report. You know, these organizations that get more money from everyday donors are able to work more freely, more fluidly, without restrictions. You bring a foundation into your world and it's gonna get ugly fast.

SPEAKER_01 54:29

Well, on that note, um, I'm just gonna bring things to a close and say thanks ever so much, Glenn. It's been really good to talk. Thank you for bearing with me with my croaky voice and also some uh technical issues we had with the audio, which if I've done a job, people might not have even noticed, and if I haven't, people will have noticed. Um, but either way, we got there in the end. Um yeah, I'll put links in the show notes to places where people can find more about the book and also uh places where you've written lots about philanthropy and the podcast that I know you yourself host, so people can find loads more if they want to hear more from you. Um yeah, just wish you all the best with the book and with your work in the future.

SPEAKER_00 55:00

Well, Rodri, it's been really great to get to know you a bit and to be a part of this podcast. Thank you for doing it. I think it's wonderful that you're out there doing this all the time, and uh I look forward to staying in touch.

SPEAKER_01 55:11

Great. Thanks, Glenn. Okay, great. Well, my thanks again to Glenn for coming on the podcast. It was great to hear about uh his book uh and also about the work that he's doing with the Stubski Foundation and his thoughts on philanthropy more generally. Um I'll put some links in the show notes to places where you can find the book, also the podcasts that we mentioned that Glenn hosts, uh, the articles that Glenn writes on a regular basis. There's loads of places where you can find his thoughts on things, so please do go and check those out. Um I'll also put links in the show notes to some things that I've written that might be of interest and some other relevant issues of this uh podcast. In general, if you're interested in issues around philanthropy and civil society and you like sort of thinking around those topics, do check out the website whyphilanthropymatters.com. Uh, loads of articles there, lots of short guides, uh, lots of bits and pieces where I've said things in the media or done speaking engagements, uh, also all the back episodes of this podcast. So there's an enormous amount of content there these days that you can dig through. Um if you want to follow me on social media, you can also do that. Uh, best places on LinkedIn, I'm pretty active there. Uh, not really so active anywhere else. Um, if anybody desperately wants me to start doing Instagram or getting really involved in threads, feel free to tell me that. I'm always open to suggestions. If you like the podcast, um please leave us a nice review wherever it is you get your podcasts so that it bumps us up the algorithm, uh, or just tell people in person if you think that colleagues of yours or friends and family might be interested in the show or in particular episodes. Uh personal recommendation certainly goes a long way. If you've got ideas for future episodes in terms of topics we could cover or people I could talk to, please do get in touch. Uh, you can find my contact details uh on the Wife Life Beauty's website. Other than that, it just remains to say thanks ever so much for listening, and I will see you next time. Bye.