NewCo Shift Forum
A Total Rethink of Philanthropy
Daniel Lurie, founder of Tipping Point, upends the traditional model with investments in R&D, new management approaches
Daniel Lurie was the chairman of the Bay area’s host committee for Superbowl 50, so he knows how to get things done in complicated, messy, and political environments. His day job requires that skill in spades: He’s literally reinventing how philanthropy is done. Watch or read below — and get to know Daniel and Tipping Point. It’s well worth the time invested.
Daniel Lurie: I love the Bay Area. I grew up about a mile from here. I went to really good schools, I had loving parents, great siblings, I had it really good. I do remember when I was 12 or 13 years old and I was lying in bed and I was upset, I was upset that I wasn’t doing more with my life.
Before you go thinking that’s strange, you have to know that my dad is a rabbi, so the guilt ran deep.
[laughter]
My parents instilled in me and my siblings from the very beginning, from an early age, that I had to be part of giving back and part of the community. My first job out of college was working on the Bill Bradley presidential campaign as a field organizer. Although that didn’t go the way we wanted it to go, I was forever changed.
Be part of something bigger that yourself, the Senator always said. Off I went to New York. I worked at the Robin Hood Foundation, they were investing millions of dollars of private money into the public sector on behalf of those living in poverty. I wanted that for my hometown. It was smart, effective philanthropy.
I moved back, I went to Berkeley for grad school, and we got started. In 2005, we launched Tipping Point Community. I wanted to create something new, a hungry model that addressed the urgency of the problems that we faced right now. That’s exactly what we did.
Tipping Point exists to help the one in five people here in this region who are too poor to meet their basic needs. We do that by investing in the most promising organizations working in education, housing, family wellness and employment.
We partner with them to get even better, to increase their capital and their organizational capacity, strengthening their organizations and their impact. Our board covers every one of your costs so that 100 percent of our fundraising, which last year was $22 million, goes out the door the next year. We have no endowment.
Why are we here? Today we’re talking about taking risks and taking shots, so from the day one at Tipping Point we always said we want to take risk where we see opportunities. Here in the Bay Area, we see some of the brightest minds come up with never before seen solutions.
Thinking about travel, how do we connect to each other, treating disease, saving energy. All of the stuff that we’ve been talking about the last day and a half here, there’s no value put on (those approaches to ideas) in the non-profit sector.
The leaders that we work with at Tipping Point simply are not given the opportunity to think big, to create or to invent. We expect these non-profits to tackle massive social problems, and yet we give them no room to do any of it. Last year, a thousand of the world’s largest companies spent $680 billion on research and development, which is excellent. And in our sector, about $0 was spent.
If companies like Apple and Google and Levis can have innovation labs, why can’t we?
Three years ago, we started to experiment, we built out an R&D space and identified three gaps in our portfolio, early childhood education, affordable childcare, and prisoner re-entry. In year one, our education team for that here in the Bay Area 80,000 children are on the waitlist to go to preschool. 80,000 here in the Bay Area.
They came up with this idea of converting a bus into a classroom. After prototyping they rented a real bus, tricked it out, and partnered with one of our groups, Aspire Public Schools, to simulate the preschool experience. Aspire told us they had always wanted to offer preschool, but they’d never considered it like this.
In year two, our childcare team launched GMA village, as in grandmothers. A social networking tool to connect caregivers in West Oakland. In year three our prisoner re-entry team came up with a concept called Common Ground. Common Ground moves probation meeting from jails and law enforcement facilities to positive public spaces like the Exploratorium or even onto a ferry crisscrossing the Bay. This year we decided to fully integrate R&D into all of our work, and we have spent close to $5 million in R&D projects over the past couple years.
This is unchartered territory for our sector, so we’re having to write a new set of rules. First, it’s not enough to just sprinkle some risk capital and hope for the best. We remain closely engaged and connected with grantees and best-in-class partners like IDEO and Google.
Second, and we all know this, this is so resource intensive, and there’s no guarantee of outcomes. In your sector, in the business sector, you have to be comfortable with failure. In our sector, that’s not always the case.
We, as funders, have to be willing to take risk and be willing to fail. It may sound like a cliché but it’s not for us. In the pharmaceutical sector, a drug can take 10 years to go from lab to market, and only 10 percent of those ever do. We have to be willing to do that.
We have to shift our mindset as funders to investing in known outcomes to investing to learn. It’s not about the bus, it’s not even about adapting essential business principles to fit our sector, it’s about the fact that 7 in 10 people born today into poverty, will remain in poverty their whole lives.
It’s about giving brilliant leaders in our sector the room to innovate with intention and with rigor. It’s our job and our role as individuals and funders and people that care about our community, to recognize that we all have a role to play in solving these massive social problems.
As the senator said all the time, “We must be part of something bigger than ourselves.” I hope you’ll join us at Tipping Point. Thank you.
