Posted by: Nathaniel | June 29, 2008

Integration: the next philanthropic frontier?

Philanthropy Cartoon

In a really interesting article in the NYTimes on June 26, Heather Timmons profiles the Children’s Investment Fund (T.C.I.) hedge fund and its non-profit twin, the Children’s Investment Fund Foundation. The fund and the foundation are run by Christopher Cooper-Hohn and his wife, Jamie, respectively, and have grown into one of the largest, best performing funds, and one of the largest charities in the UK.

T.C.I. has grown a somewhat fearsome reputation for shareholder advocacy, and a number of articles published in the last year have explored the Foundation’s “venture philanthropy” approach of bringing private sector principles to the charitable process, but the thing that intrigued me about the NY Times article was its exploration of how the couple’s private lives and inter-personal negotiations were reflected in the way they had structured their organizations.

“The couple met at a party while they were attending Harvard. Mr. Cooper-Hohn was smitten immediately, but Ms. Cooper-Hohn was openly uninterested in a man whose goal in life was to become wealthy. Mr. Cooper-Hohn, displaying skills he would later use to shake up boardrooms around the world, eventually won her over. The foundation, and T.C.I.’s role in financing it, sprung out of a spirit of compromise between the two.

T.C.I. and the Children’s Investment Fund Foundation were set up simultaneously in 2003 with an unusual fee structure. Investors pay T.C.I. a 1 percent fee, about half the industry average, as well as a 0.5 percent fee to the foundation. If the fund earns more than 11 percent profit, investors pay another 0.5 percent to the foundation. T.C.I.’s profits are funneled back to the foundation, not to Mr. Cooper-Hohn.”

I think the structure is fascinating. Some critiques have accused T.C.I. of adopting their philanthropic practices to soften the firms aggressive reputation, but at least on initial glance, that seems unlikely. I think structuring returns to require that your investors ‘buy in’ to the philanthropic mission is a really compelling strategy to integrate a social mission with financial goals.

The other type of ‘integration’ that the article brings up is the question of how one integrates a sense of social purpose and a desire to create change with a fulfilling, economically comfortable lifestyle. While the Cooper-Hohn’s have structured their organizations to bring these two sets of needs together, there is still a clear division between their social and economic missions. Earlier this year, Shelby Davis, the philanthropist behind the Davis Scholarships for international students from the United World Colleges to study at American Universities, explained his philosophy as “you learn until you’re 30, make money till your 60, then spend the rest of your life giving back.”

This Dharmic pattern seems to be the norm for many philanthropists, but people in my generation are increasingly questioning the logic upon which it is based. Young people today are accutely aware of the challenges in their world, and have created or found more opportunities than ever before to do something about it now. Rates of volunteerism and study abroad are up and increasing. Universities are having to rapidly adapt to the creative ways their students are creating change (see more about some of the leading student-led organizations here).

The idea, then, that graduation means either scraping by on meager nonprofit salaries or abandoning their social missions for a well paying private sector job is increasingly untenable for today’s undergraduates. There has to be a middle space where people can make change even as they make a life. If we can’t provide that, we will loose an incredible opportunity.



  1. Interesting post Nathaniel. Wanted to share this with you. When I was 16 a wealthy man I worked for educated me on a universal law, the law of attraction. He taught me that there is a perpetual cycle of giving and receiving that runs our universe, in order for you to receive you have to give and give gifts. The more you give the more you receive. Cash is the best gift and everyone has the right to give. That day changed my life, the day I realized I had the right to give.

    It is owed to this principle, why so many who are poor can never seem to receive in abundance. They are too focused on their expenses and getting by day-to-day to give the necessary attention to giving. It is also by this principle why the wealthy and those with high net worth are always receiving in abundance because they are always giving in abundance. I chose to associate myself with that line of reasoning and with other millionaires of like minds.

    On June 1, 2008 I joined the Millionaires Gift Club. The Millionaires Gift Club consists of millionaires and aspiring millionaires who wish to maintain the perpetual viral cash flow of giving moderately and receiving massively. You can participate at $1000, $2500, $5000 or $10,000 thus gifting into the program is extremely affordable. It was given to me and now I must share that invitation with you! Consider it paid forward.

    Take care,

  2. I am from India and represent a ngo who which does alot of work in the interior villages, we have a 30 bed hospital, and the villagers are benefitting alot from the services we provide. However there is never enough money left to add new facilites to our hospital, we use outdated equipment and have to struggle wit hour finances.

    I would like to send a proposal to Mr Chris Cooper – Hohn for the hospital, i can submit all the details required, please dont ignore this mail
    it is a genuine request, its just that i did not have your personal email. Thank you

  3. Extremely superb article, genuinely helpful information. Never imagined I would discover the tips I want in this article. I’ve been hunting everywhere in the web for a while now and was starting to get frustrated. Thankfully, I came across your page and got precisely what I was struggling to find.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s


%d bloggers like this: