On Philanthropy

 A Million Cups Of Coffee: Building An Entrepreneurial Ecosystem

The Ewing Marion Kauffman Foundation was created by Ewing Kauffman, a man who made a half-billion dollars in the pharmaceutical industry. He got his start in the US Navy. But his foundation has other ideas. "A Million Cups of Coffee" is a program of business seminars where tech talent and tech money meet each other in the hopes of getting rich together. It is a charity. 

Before making their presentations, the entrepreneurs who speak at each 1 Million Cups event incorporate lessons from the Kauffman Founders School “Powerful Presentations” series, featuring a seasoned presentation coach. Afterward, the presenter engages in a 20-minute question and answer session with the audience. Finally, each founder receives feedback via an audience survey and from its city’s local organizers.

The presentation process gives entrepreneurs a chance to discover challenges and opportunities in their business models and to hone their speaking skills. The feedback the presenters receive gives them perspectives they wouldn’t otherwise find in a single setting, and they take away new connections and insights for improving their businesses.

Biographies of Ewing Kauffman generally skip over the period between 1934, his high school graduation, and WWII, when he served in the US Navy. Apparently he worked in a laundry and went to junior college.

Like most men of his generation, the Depression meant he was going nowhere fast. But when the war was over and he left the US Navy, his life had turned around. The economy was full of opportunity and he was now well trained, both thanks to the US taxpayer.  He quickly saved $5,000 selling pharmaceuticals and then used that money to start his own pharmaceutical company, Marion Labratories. The post-war boom years treated him well and he became a Kansas City hero by bringing the expansion Kansas City Royals to town.

Midway through his career, Kauffman began sheltering his wealth from taxes in a charitable foundation. By starting the self-named Ewing Marion Kauffman Foundation, Kauffman saved (conservatively) approximately $250 million in estate taxes and tens of millions of dollars in income tax.

As a country we have exempted gifts to foundations from tax ostensibly because we want to encourage charity.

Did the US government train Ewing Kauffman, give him a job, give him an economy full of opportunity and then exempt him from taxes so that he could put on business seminars? So that he could put on really good business seminars?

What would have happened without the favorable tax treatment? Would Kauffman still have created this enduring tribute to his own greatness? Maybe the money would have come out of the pockets of his heirs, leaving them less time to focus on competitive ballroom dancing?

Kansas City, Missouri has some of the worst schools in the county. How many cups of coffee will it take before all this great entrepreneurship trickles down to those kids?

Building Libraries In The Sky

Inequality means that the lesson of Andrew Carnegie is more relevant today than it has been for 90 years. And that lesson is that philanthropy has historically been most efficacious in the charitable task of helping rich people sleep at night.

Libraries are a great example because--to white college educated people--they seem so self-evidently good. But where's the evidence? Twenty-one pages of Google results reveal nothing.  When Paul Ryan talks about poverty programs that have failed, why does he exclude benefits from people's income1 while simultaneously failing to notice that access to a library has zero correlation with social mobility?

The reason? The reason is that poverty is caused by an absence of money. The solution is the presence of money. But if that's true it means that the difference between successful people and failures is not virtue or intelligence or wisdom, but rather, the presence or absence of money. A person who understands this reality and yet continues to support the Reaganists policy platform, is, by logical necessity, a greedy, racist, asshole.

Cognitive dissonance is a bitch, and we'll never defeat it without a fight.

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1. "Government programs today are cutting poverty nearly in half (from 29% to 16%) while in 1967 they only cut poverty by about one percentage point.”