What's Up Zuck?
By Christian Braemer
Cofounder & CEO, Benefunder
While billionaires like Mark Zuckerberg and others have built wealth through shifting paradigms and disrupting entire industries, it isn't hard to imagine why the status quo just won't cut it when it comes to creating a legacy and social impact.
This phenomenon isn't unique to billionaires; many high net worth donors increasingly want their charitable dollars to make a difference they can see and measure. In fact,
The Chronicle of Philanthropy
recently
reported
that younger donors in particular want to promote immediate change, especially by accelerating the pace of scientific discovery.
The
Chan Zuckerberg Initiative
has garnered criticism for choosing an alternative structure, but is it really warranted? Are the Zuckerbergs cold hearted, egomaniacal control freaks or are they on to something? Do we really need a different approach?
A common misconception is that charity and for-profit business are mutually exclusive. The lines have become increasingly blurred by the advent of new socially-driven corporate classifications like B-corps, major windfalls in nonprofit investments, and the vague definition of impact investments (which can can apply to grants, venture style investments, social impact bonds, as well as to more traditional investment funds that avoid or favor certain stocks based on socially responsible values).
Alternative structures can add flexibility by reducing some of the limitations on how, when, and what you can target for funding. Sometimes the greatest impacts are in areas either overlooked or off limits to certain entities.
Entrepreneurs tend to be good at creating new business models, scaling them, and creating value in places others didn't see. These same skills and approach can have similar outcomes in social impact areas, and we need to embrace them.
Let's look at what this choice means in broad terms. The LLC structure of the Chan Zuckerberg Initiative will fund a full range of efforts, such as lobbying, equity investments, as well as grants to nonprofit programs. The one thing the Zuckerbergs will not get is an immediate tax benefit despite their commitment; and assuming they will sell shares to fund these initiatives, they'll be taxed on those capital gains.
Benefunder, on the other hand, was created as a hybrid organization - part for-profit, part foundation. In our case, we needed a philanthropic vehicle to provide tax advantages for donors and to operate our charitable products. At the same time, we required the ability to attract capital, take long-term risk, subsidize growth, and recruit a highly talented team. In our case, this structure allows us to offer a marketplace with a disruptive cost structure to donors while providing unprecedented access and direct engagement with the causes they care most about.
Our vision is to allow donors to be able to apply the same principles to giving as they do in their investment portfolios, such as diversification, accountability, transparency, planning, and flexibility. None of this would have been possible with a traditional charitable structure.
The downside of these creative structures is the inevitable dishonest players that take advantage of less known structures and exploit the rules and social good mission with the intention to deceive. It's important that we stay true to our missions, remain transparent, and work together to create standards and hold one another accountable, and most importantly, share ideas and lessons learned.
The bottom line: Evolving and increasing social challenges require out-of-the-box thinking, entrepreneurship, success stories that prove the model, and of course, some learning experiences along the way.
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The 'Gift' of Research that Keeps Giving
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As we head into the final stretch of the year, many nonprofit organizations have shifted into high gear asking for charitable donations to help their causes. We, at Benefunder, would like to first focus on the endless gifts that research brings to humanity. We would also suggest an alternative approach, which converts giving to a year-round endeavor.
The gift of research stretches so much further than most people realize. In fact, half of all wealth created since WWII has come from academic research. In the past six decades we have witnessed the invention of computers, laser technologies, advanced cell therapy, safer cars, improved infrastructure, and even more effective laws and policies. These solutions have created jobs, improved our living standards, and made our nation stronger. And the seeds for all of this began in academics.
This important work is constantly evolving, and researchers need a predictable influx of resources year-round to keep their labs running. That's why we've created a vehicle that allows donors to fill this need in a unique way using a new type of Donor Advised Fund. It allows for a tax deductible contribution at the end of year, while providing a low-cost vehicle for making distributions to individual researchers throughout the year. Most importantly we make it easy.
Researchers are the cornerstone of Benefunder. The more than
650 top researchers
on our platform are working on
some of the most exciting cutting edge innovations happening today
-- from successful treatments for Alzheimer's and for children with rare diseases, to healthy aging, cyber security, wildlife conservation, combating world hunger, and much more.
We have created the largest research community in the United States in order to give donors access to cutting edge research and allow them to have a direct impact in changing our world. We have also partnered with
top universities and research institutes
-- such as Harvard, UC San Diego, Rutgers, and Children's National Health System in Washington, D.C. -- to connect donors with inspired research and big ideas, and to encourage them to play a role in ensuring these "gifts" continue to be pushed out to humankind.
Those who are motivated to give are passionate about funding causes that benefit society. Benefunder allows you, the donor, to have immediate and direct impact on research that is important to you. Whether you choose to support a cure, new device, a more efficient way to store energy, or a greater understanding of how cultures can coexist more peacefully, it is a personal decision my team is prepared to help you execute. Contact Tom Paparatto at
tpaparatto@benefunder.org
to discover how Benefunder's DAF can be a perfect fit for your philanthropic passions, while fueling important research.
Your charitable donations not only allow some of our best and brightest minds to pursue their most promising paths, but they can often fill important gaps that otherwise go unfunded.
During this giving season, join us in giving the gift of research -- for a better today and tomorrow.
From all of us at Benefunder, happy holidays.
This tip is for information purposes only and should not be considered tax advice.
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Philanthropy Has a Role in Clean Energy Economy
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Benefunder cofounder and CEO Christian Braemer recently penned an insightful article in the
U-T San Diego
explaining how philanthropy can help strengthen our nation's clean energy initiatives. Read more here.
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Benefunder Clean Energy Webinar December 15
While the United Nations Conference on Climate Change in Paris wraps up this week, the global conversation about climate change and clean energy solutions will continue to grow; philanthropy has an increasingly influential voice in this dialogue.
Benefunder will be hosting a special webinar on Dec. 15 on how philanthropy can help fuel the nation's clean energy economy. The webinar will feature
top clean energy innovators who will share their work, findings, and aspirations that address many of the underlying problems impacting climate change. To register and for more information click
here
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Benefunder Researcher Jim Hansen at the
Paris Climate Conference
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Top climate scientist
Jim Hansen
of Columbia University, along with other scientific leaders, spoke at a recent press conference during the United Nations Conference on Climate Change in Paris about how a combined strategy employing all the major sustainable clean energy options - including renewables and nuclear - can prevent the worst effects of climate change by 2100, such as the loss of coral reefs, severe damages from extreme weather events, and the destruction of biodiversity and ecosystems worldwide.
Hansen's research and insights were also recently featured in the
Washington Post
.
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Benefunder: Filling The Public Funding Gap With Socially Responsible Investment
Planet Experts
recently published an in-depth article about how Benefunder is part of an important financial movement that has taken shape over the last two decades -- socially-responsible investing. Read more
here
.
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How Will Games And Robots Benefit Hand Therapy?
Although 75% of patients post stroke learn to walk again, only 25 - 45% demonstrate meaningful recovery of hand function, affecting their independence and requiring costly supportive care.
Hand therapy in the early period of heightened neuroplasticity following stroke is not prioritized in medical care units, so there is a vital need to develop effective interventions for hand rehabilitation.
Alma S. Merians
, professor and chair of Rehabilitation and Movement Sciences at Rutgers University, is working to fill that need by using games and robots to enhance hand therapy.
Collaborating with other physical therapists, neuroscientists, and biomedical engineers, Merians utilizes technology-assisted hand rehabilitation to retrain people with neurological diseases like stroke or cerebral palsy. Read more about her breakthrough research
here
.
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