Donor-advised funds represent “the biggest opportunity for philanthropy in America,” according to Laura Lauder, a venture capitalist and philanthropist.
More than $250 billion sitting in donor-advised funds has never been leveraged to identify high-risk and high-social return investment opportunities, said Lauder while speaking at the annual Milken Institute Global Conference yesterday (May 1).
Some of these opportunities could include income sharing agreements, environmental projects or housing projects, she said, noting that while liquidity is the largest issue for philanthropists, nearly one third of the billions in donor-advised funds is already in cash.
“People are thinking that they’re going to give it away tomorrow and they don’t, and it sits in these donor-advised funds for years and years,” said Lauder. “Let’s use the collaborative research that we have identified for fantastic opportunities to put these funds into social impact pools.”
Lauder works at Lauder Partners, a venture capital firm based in Silicon Valley run by her husband Gary, the grandson of cosmetics mogul Estee Lauder.
She also leads the Laura and Gary Lauder Family Venture Philanthropy Fund, which began in 1995 and claims to “use a venture philanthropy approach to giving” through risk tolerance and investments in visionary leaders.
Through the fund, she helped found the National Constitution Center’s Classroom Exchanges Project, which connects students for debates on the Constitution, and the Aspen Institute Socrates Program, which allows emerging leaders to discuss contemporary issues.
While speaking at the Milken Conference, Lauder also noted that she has recently switched from pure philanthropy to a form of charitable giving that prioritizes concessionary returns. “That way you can really scale because you can recycle the dollars,” she said. “I have found that by promoting venture philanthropy and social impact investing, you absolutely get the best of both worlds.”
Lauder, who is on the board of Jewish nonprofits like the Jewish Community Federation and Endowment Fund of San Francisco, additionally referenced the recent $200 million donation of the Lauder family towards Alzheimer’s research.
This donation is a form of “moonshot philanthropy,” which refers to when high-net-worth individuals invest in high-risk and early-stage innovations with the possibility of high reward, she said while addressing the conference’s panel on “Strategic Philanthropy Around the World.”
What is the Milken Institute?
The annual conference based in Los Angeles is held by the Milken Institute, a non-profit think tank chaired by billionaire Michael Milken. A former employee at investment bank Drexel Burnham Lambert, Milken helped create the market for high-yield securities before he was banned from the securities industry in 1990 after pleading guilty to securities fraud. He subsequently founded the Milken Institute in 1991, and in 2020 was pardoned by then-President Donald Trump.
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