Yesterday, I wrote an article about the difficulties associated with giving away $1 billion in a 12-month period. I said that I would deal today with how I would do it. Here's how I would do it.
In giving away money, I want to get the most bang for my buck. That phrase comes out of the Vietnam War, and it has become part of the colloquial language of Americans ever since.
I begin with this question: "What could this money due to promote positive long-term change among the largest number of people?"
THE #1 HISTORICAL MODEL
Let me provide a model. It is probably the classic model in the history of philanthropy.
The richest man in the world on January 1, 1901, was Andrew Carnegie. He had just sold Carnegie Steel to United States Steel for about $460 million. This was not cash, but it was in the form of long-term bonds. He got about $300 million of this personally. There was no income tax in 1901.
Carnegie did what he said he was going to do, namely, to give away this money. Over the next 18 years, he almost achieved his goal. He gave away almost all of it. There has never been this richer man in history who gave away most of his money in his lifetime. Wikipedia says: "Carnegie died on August 11, 1919, in Lenox, Massachusetts, of bronchial pneumonia. He had already given away $350,695,653 (approximately $4.8 billion, adjusted to 2010 figures) of his wealth. At his death, his last $30,000,000 was given to foundations, charities, and to pensioners."
His various Carnegie foundations were taken over by the American Establishment. Here, his money achieved a lot of bang for the buck, but it was mostly for evil. He had been a far greater benefactor to the American people by his massive cost-cutting in steel production, price competition in steel sales, and the creation of all new world, a world of skyscrapers, railroads, and everything else that used steel.
The same thing happened to the Rockefeller foundations. The same thing happened to the Ford Foundation.
His most famous charity category was to money to build free libraries. He knew what he was doing. He built the original library in a particular town, and he made certain that there was money to fill it with books. Then he walked away. That forced the local town councils to start funding the libraries on a permanent basis. In effect, he addicted the public to the idea of free libraries, and then he handed over the now-addicted public to local politicians. This was called pump-priming in later years. It remains the model of how to get politicians to pony up money forever to promote a particular project.
I want to do the opposite. I want to take something that the government already funds on a permanent basis, and persuade voters not to fund it by as much any longer. I want to do a "reverse Carnegie."
Then there is the question of maximum impact. How can I change the lives of the largest number of people?
INDIA
The place to start is that nation which is the fastest growing large nation in the world, which is the second largest, namely, India. It will be the largest nation by 2050.
India offers a unique opportunity. It is officially run by the principles of British common law. There is the rule of law in India. This is a major advantage that India has over China.
Second, is highly bureaucratic. To get into the top rung, a person must know English. The elite speak English.
Third, it is still run by what is sometimes called Indian Standard Time. It is the time perspective of traditional India, which is not the time perspective of the West. It is inherently cyclical. It means that time is not really relevant. This attitude shapes all of India.
Fourth, this outlook is tied to the caste system. In the history of the human race, more people have had their lives structured in terms of the Indian caste system than any other social system. It is rigorous. It also has had wide public support. If this caste system can be broken, and if a Western concept of time can be substituted for Indian standard time, economic growth in India will skyrocket over time. All it will take is an extra two percentage points per year of economic growth to make India the marvel of the world in a century.
My goal is to bring the productive capacity of untapped human resources to the Indian economy, and from there to the rest of the world. India has the greatest potential of any country in the world to mobilize brainpower. China is in second place, but China is facing an economic bust when its property bubble pops. Also, China is not run by common law principles. It is run by communist bureaucrats.
In India, English is the second language. It is the language of civil government. It is the language of education. It is the common language of the elite. English is the common language of business, science, and money. India has a huge advantage over China in this respect.
THE HOLE IN THE WALL PROJECT
So, what would I do with the money? I would take 80% of it and start a foundation that is limited to implementing the "hole in the wall" system. This system is simple to describe. The organization takes a handful of cheap computers into a village, and then they walk away. There is no more adult intervention. Within hours, local schoolchildren begin to experiment with the computers. Within a matter of days, a significant percentage of the school-age children in that village have learned how to access the World Wide Web. They begin to learn English. They get what they cannot get in the government schools, namely, accurate information taught in a way that the children learn. This 2-minute documentary explains the program.
For more details, watch this.
This simple program threatens the Indian caste system, but not directly. The kids who are most competent in mastering the basics of the World Wide Web do so on the basis of personal skills that have nothing to do with their membership in a caste. Students who are best equipped to teach other students are the ones who wind up as the teachers. Students want to learn how to access the Web, and they do not care who teaches them. It may be a girl. It may be a boy. It may be an untouchable. It doesn't matter. The kids just want to learn how to access the World Wide Web.
The advantage of this program from an institutional standpoint is this: it is easy to define the objectives. If it is easy to verify the objectives -- so many computers in a village per capita -- it is easy to monitor the expenditure of the funds. Furthermore, as bandwidth gets cheaper, and as computer power gets cheaper, and as computer screens get cheaper, there will be more bang for the buck. This endowment money takes advantage of Moore's law. It will get far less expensive to implement over time.
There are about 650,000 villages in India. The billion dollars will get consumed before India runs out of villages.
Because students love to use the computers, there is virtually no possibility that the town elders or religious leaders are going to be able to keep the kids away from the computers.
The parents want to give the children every opportunity to get a better education, and the computers offer this opportunity. When it comes to reducing the educational opportunities of children, politicians must be very careful. When somebody comes to town, sets up a new educational system, charges no one anything for the service, and the kids start learning it within hours, it will take tremendous opposition by local political leaders to persuade parents to allow the town council to either abolish the computers or turn them over to people approved by the town council.
CONCLUSION
I would keep 20% in reserve, just to get some diversification. This, I would put into deep hole, non-electric water wells. I would install these all over India. They cost about $5,000 each to install. The wells would go into villages that (1) had a hole in the wall program, 2) had no existing deep well system or other major water source, and (3) had at least 2,000 residents (more is better). This would give back many hours per week to women, who haul water for miles. It would increase the health of the villagers. The wells will do this for about 20 years. They are a low-tech investment.
As with the hole in the wall, this is easy to monitor. The money is tied up in a limited program. This limits the flexibility of administrators.
All of the money for both programs would have to be spent in 10 years. There would be no lifetime employment. The foundations would be shut down and all remaining funds spent on the specified programs.
Because of the limited number of skilled people required to implement the programs initially, 25% would be spent in the first five years, with 75% in the next five.
If the programs work, Indian philanthropists will get on board. This is the "Carnegie replacement factor." They will continue to donate, but only if the programs produce measurable results.
What is the heart of these projects? A re-thinking of time. By changing the productivity of people's time -- school-age children and women -- it persuades them to re-allocate their time. This makes them more productive. The cost factor shifts in the direction of greater output. How? By "kick-starting" or "pump-priming" this re-allocation by subsidizing a pair of tools: Web access (time-enhancing) and clean water access (time-saving).
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