“I have bet my entire career on changing how it is people give,” Arrillaga-Andreessen said in a recent presentation celebrating the Rockefeller Foundation’s 100th birthday.
Arrillaga-Andreessen, who describes herself is a “pracademic”, not only teaches Strategic Philanthropy at the Stanford School of Business, but as the heir to a real estate fortune, and the wife Netscape co-founder Marc Andreessen, is also a practicing philanthropist. Her life’s purpose, she says, is “empowering and educating individuals to give in a way that matters more,” and this has informed both her academic career, and her recent announcement of the Laura Arrillaga-Andreessen Foundation. Its stated mission is to “serve as a philanthropic innovation lab, and use technology to globally scale open-source educational innovations to positively influence how it is people give.” It may sound like a mouthful, but what it really comes down to is making it easier for people to maximize the impact of their giving.
Arrillaga-Andreessen is a major proponent of social entrepreneurship, and using market forces to improve efficiency in the non-profit sector. And philanthropy is big business: more than $316 billion is donated to non-profits each year in the U.S. alone, and more than 80% of that comes from individual donations. Yet with an estimated that two-thirds of all giving based on emotion, much of the money that goes to non-profits is perhaps not being spent as well as it could be.
“Currently, there are almost no market-forcing functions that drive inefficient non-profits out of business,” Arrillaga-Andreessen explains. “We as philanthropists are the consumers who are keeping these organizations alive because we as individuals are not doing the research that rewards the non-profits that have the highest social return on investment, as opposed to the non-profits that are showing us the most provocative images, or telling us the most moving stories.”
Indeed, many of the most impactful solutions are often not the most obvious at first glance, and philanthropists seem to be catching on to this. Donate seventy cents a day to feed a hungry child, and you’ve created a short-term solution to a problem for which there is an immediate need, but you’ve done nothing to address the root of the problem. But if you help build roads and schools in developing countries, educate farmers on more effective, sustainable growing methods, and create access to basic financial and health services however, you’re on your way to removing people from poverty permanently, thus reducing the need for the short-term, band-aid solutions.
“We have to commit to researching every single one of our investments, not only before we make them, but along the way and after we make them as well,” Arrillaga-Andreessen stresses. “It is our commitment to learning that will ultimately what will compel our partners in social change— non-profits— to evaluate their work, hopefully with our individual support to do so, and create measureable social impact.”
Watch her presentation at the Rockefeller Center's Celebration of 100 Years of American Philanthropy