0:00:00.989,0:00:04.595 I want to talk about social innovation 0:00:04.619,0:00:06.546 and social entrepreneurship. 0:00:08.054,0:00:10.166 I happen to have triplets. 0:00:10.773,0:00:12.739 They're little. They're five years old. 0:00:13.081,0:00:16.406 Sometimes I tell people I have triplets.[br]They say, "Really? How many?" 0:00:16.430,0:00:17.795 (Laughter) 0:00:17.819,0:00:21.920 Here's a picture of the kids --[br]that's Sage, and Annalisa and Rider. 0:00:23.396,0:00:26.498 Now, I also happen to be gay. 0:00:28.490,0:00:30.558 Being gay and fathering triplets is by far 0:00:30.582,0:00:33.424 the most socially innovative,[br]socially entrepreneurial thing 0:00:33.448,0:00:34.996 I have ever done. 0:00:35.020,0:00:36.075 (Laughter) 0:00:36.099,0:00:39.747 (Applause) 0:00:39.771,0:00:44.152 The real social innovation I want[br]to talk about involves charity. 0:00:44.176,0:00:47.546 I want to talk about how the things[br]we've been taught to think 0:00:47.570,0:00:49.804 about giving and about charity 0:00:49.828,0:00:51.709 and about the nonprofit sector, 0:00:51.733,0:00:55.678 are actually undermining[br]the causes we love, 0:00:55.702,0:00:58.482 and our profound yearning[br]to change the world. 0:00:59.387,0:01:02.068 But before I do that,[br]I want to ask if we even believe 0:01:02.092,0:01:05.046 that the nonprofit sector[br]has any serious role to play 0:01:05.070,0:01:06.262 in changing the world. 0:01:07.254,0:01:10.896 A lot of people say now that business[br]will lift up the developing economies, 0:01:10.920,0:01:13.245 and social business[br]will take care of the rest. 0:01:14.166,0:01:18.487 And I do believe that business will move[br]the great mass of humanity forward. 0:01:19.757,0:01:23.653 But it always leaves behind[br]that 10 percent or more 0:01:23.677,0:01:26.438 that is most disadvantaged or unlucky. 0:01:27.870,0:01:29.490 And social business needs markets, 0:01:29.514,0:01:32.276 and there are some issues[br]for which you just can't develop 0:01:32.300,0:01:35.110 the kind of money measures[br]that you need for a market. 0:01:35.134,0:01:38.688 I sit on the board of a center[br]for the developmentally disabled, 0:01:38.712,0:01:41.022 and these people want laughter 0:01:41.046,0:01:43.185 and compassion and they want love. 0:01:45.458,0:01:46.939 How do you monetize that? 0:01:48.649,0:01:52.403 And that's where the nonprofit sector[br]and philanthropy come in. 0:01:53.006,0:01:56.240 Philanthropy is the market for love. 0:01:56.595,0:01:58.992 It is the market for all those people 0:01:59.016,0:02:01.415 for whom there is no other market coming. 0:02:01.856,0:02:04.563 And so if we really want,[br]like Buckminster Fuller said, 0:02:04.587,0:02:06.952 a world that works for everyone, 0:02:06.976,0:02:09.456 with no one and nothing left out, 0:02:09.480,0:02:11.618 then the nonprofit sector has to be 0:02:11.642,0:02:13.750 a serious part of the conversation. 0:02:14.750,0:02:16.498 But it doesn't seem to be working. 0:02:17.173,0:02:19.578 Why have our breast cancer[br]charities not come close 0:02:19.602,0:02:21.324 to finding a cure for breast cancer, 0:02:21.348,0:02:23.300 or our homeless charities not come close 0:02:23.324,0:02:25.614 to ending homelessness in any major city? 0:02:26.407,0:02:28.385 Why has poverty remained stuck 0:02:28.409,0:02:32.460 at 12 percent of the U.S.[br]population for 40 years? 0:02:34.015,0:02:35.621 And the answer is, 0:02:35.645,0:02:38.900 these social problems[br]are massive in scale, 0:02:38.924,0:02:41.678 our organizations[br]are tiny up against them, 0:02:41.702,0:02:44.534 and we have a belief system[br]that keeps them tiny. 0:02:45.447,0:02:46.617 We have two rulebooks. 0:02:46.641,0:02:48.507 We have one for the nonprofit sector, 0:02:48.531,0:02:51.050 and one for the rest[br]of the economic world. 0:02:51.923,0:02:53.990 It's an apartheid, and it discriminates 0:02:54.014,0:02:56.940 against the nonprofit sector[br]in five different areas, 0:02:56.964,0:02:58.723 the first being compensation. 0:02:59.974,0:03:02.618 So in the for-profit sector,[br]the more value you produce, 0:03:02.642,0:03:04.180 the more money you can make. 0:03:04.204,0:03:06.288 But we don't like nonprofits to use money 0:03:06.312,0:03:09.661 to incentivize people[br]to produce more in social service. 0:03:10.264,0:03:12.751 We have a visceral reaction[br]to the idea that anyone 0:03:12.775,0:03:15.446 would make very much money[br]helping other people. 0:03:16.216,0:03:18.461 Interestingly, we don't have[br]a visceral reaction 0:03:18.485,0:03:20.890 to the notion that people[br]would make a lot of money 0:03:20.914,0:03:22.139 not helping other people. 0:03:22.163,0:03:24.264 You know, you want to make[br]50 million dollars 0:03:24.288,0:03:26.510 selling violent video games[br]to kids, go for it. 0:03:26.534,0:03:28.655 We'll put you on the cover[br]of Wired magazine. 0:03:28.679,0:03:30.703 But you want to make[br]half a million dollars 0:03:30.727,0:03:32.216 trying to cure kids of malaria, 0:03:32.240,0:03:35.360 and you're considered a parasite yourself. 0:03:35.384,0:03:40.312 (Applause) 0:03:40.336,0:03:42.757 And we think of this[br]as our system of ethics, 0:03:42.781,0:03:44.924 but what we don't realize[br]is that this system 0:03:44.948,0:03:48.106 has a powerful side effect, which is: 0:03:48.130,0:03:51.884 It gives a really stark,[br]mutually exclusive choice 0:03:51.908,0:03:55.542 between doing very well[br]for yourself and your family 0:03:55.566,0:03:57.960 or doing good for the world, 0:03:57.984,0:04:00.778 to the brightest minds[br]coming out of our best universities, 0:04:00.802,0:04:02.912 and sends tens of thousands of people 0:04:02.936,0:04:05.634 who could make a huge difference[br]in the nonprofit sector, 0:04:05.658,0:04:08.254 marching every year[br]directly into the for-profit sector 0:04:08.278,0:04:12.214 because they're not willing to make[br]that kind of lifelong economic sacrifice. 0:04:13.404,0:04:16.349 Businessweek did a survey,[br]looked at the compensation packages 0:04:16.373,0:04:18.698 for MBAs 10 years out of business school. 0:04:19.416,0:04:22.140 And the median compensation[br]for a Stanford MBA, 0:04:22.164,0:04:26.385 with bonus, at the age of 38,[br]was 400,000 dollars. 0:04:26.972,0:04:29.242 Meanwhile, for the same year,[br]the average salary 0:04:29.266,0:04:32.095 for the CEO of a $5 million-plus[br]medical charity in the U.S. 0:04:32.119,0:04:37.114 was 232,000 dollars,[br]and for a hunger charity, 84,000 dollars. 0:04:37.765,0:04:40.361 Now, there's no way you're[br]going to get a lot of people 0:04:40.385,0:04:44.440 with $400,000 talent to make[br]a $316,000 sacrifice every year 0:04:44.464,0:04:46.687 to become the CEO of a hunger charity. 0:04:47.767,0:04:51.292 Some people say, "Well, that's just[br]because those MBA types are greedy." 0:04:51.316,0:04:53.487 Not necessarily. They might be smart. 0:04:54.023,0:04:56.018 It's cheaper for that person to donate 0:04:56.042,0:04:59.852 100,000 dollars every year[br]to the hunger charity; 0:04:59.876,0:05:01.790 save 50,000 dollars on their taxes -- 0:05:01.814,0:05:06.239 so still be roughly 270,000 dollars[br]a year ahead of the game -- 0:05:06.263,0:05:08.858 now be called a philanthropist[br]because they donated 0:05:08.882,0:05:10.716 100,000 dollars to charity; 0:05:10.740,0:05:12.998 probably sit on the board[br]of the hunger charity; 0:05:13.022,0:05:14.918 indeed, probably supervise the poor SOB 0:05:14.942,0:05:17.688 who decided to become the CEO[br]of the hunger charity; 0:05:17.712,0:05:18.719 (Laughter) 0:05:18.743,0:05:22.094 and have a lifetime[br]of this kind of power and influence 0:05:22.118,0:05:24.378 and popular praise still ahead of them. 0:05:25.846,0:05:29.304 The second area of discrimination[br]is advertising and marketing. 0:05:29.328,0:05:32.809 So we tell the for-profit sector,[br]"Spend, spend, spend on advertising, 0:05:32.833,0:05:36.155 until the last dollar no longer[br]produces a penny of value." 0:05:36.695,0:05:40.045 But we don't like to see our donations[br]spent on advertising in charity. 0:05:40.069,0:05:44.044 Our attitude is, "Well, look,[br]if you can get the advertising donated, 0:05:44.068,0:05:47.313 you know, to air at four o'clock[br]in the morning, I'm okay with that. 0:05:47.337,0:05:49.701 But I don't want my donation[br]spent on advertising, 0:05:49.725,0:05:51.292 I want it go to the needy." 0:05:51.316,0:05:53.174 As if the money invested in advertising 0:05:53.198,0:05:55.828 could not bring in dramatically[br]greater sums of money 0:05:55.852,0:05:57.004 to serve the needy. 0:05:57.853,0:05:59.944 In the 1990s, my company created 0:05:59.968,0:06:03.343 the long-distance[br]AIDSRide bicycle journeys, 0:06:03.367,0:06:07.916 and the 60 mile-long[br]breast cancer three-day walks, 0:06:07.940,0:06:10.900 and over the course of nine years, 0:06:10.924,0:06:15.963 we had 182,000 ordinary[br]heroes participate, 0:06:15.987,0:06:19.883 and they raised a total[br]of 581 million dollars. 0:06:19.907,0:06:23.047 (Applause) 0:06:23.071,0:06:25.524 They raised more money[br]more quickly for these causes 0:06:25.548,0:06:27.214 than any events in history, 0:06:27.238,0:06:30.032 all based on the idea[br]that people are weary 0:06:30.056,0:06:32.858 of being asked to do the least[br]they can possibly do. 0:06:32.882,0:06:37.448 People are yearning to measure[br]the full distance of their potential 0:06:37.472,0:06:40.107 on behalf of the causes[br]that they care about deeply. 0:06:40.813,0:06:42.448 But they have to be asked. 0:06:43.837,0:06:45.670 We got that many people to participate 0:06:45.694,0:06:47.905 by buying full-page ads[br]in The New York Times, 0:06:47.929,0:06:51.342 in The Boston Globe, in prime time[br]radio and TV advertising. 0:06:51.366,0:06:53.525 Do you know how many people[br]we would've gotten 0:06:53.549,0:06:55.429 if we put up fliers in the laundromat? 0:06:57.014,0:07:01.220 Charitable giving has remained stuck[br]in the U.S., at two percent of GDP, 0:07:01.244,0:07:04.003 ever since we started[br]measuring it in the 1970s. 0:07:04.027,0:07:06.340 That's an important fact,[br]because it tells us 0:07:06.364,0:07:09.054 that in 40 years, the nonprofit sector 0:07:09.078,0:07:12.159 has not been able[br]to wrestle any market share 0:07:12.183,0:07:14.218 away from the for-profit sector. 0:07:14.940,0:07:17.134 And if you think about it,[br]how could one sector 0:07:17.158,0:07:20.215 possibly take market share[br]away from another sector 0:07:20.239,0:07:22.410 if it isn't really allowed to market? 0:07:23.441,0:07:25.155 And if we tell the consumer brands, 0:07:25.179,0:07:27.735 "You may advertise[br]all the benefits of your product," 0:07:27.759,0:07:31.140 but we tell charities, "You cannot[br]advertise all the good that you do," 0:07:31.164,0:07:33.925 where do we think the consumer[br]dollars are going to flow? 0:07:35.155,0:07:37.989 The third area of discrimination[br]is the taking of risk 0:07:38.013,0:07:41.220 in pursuit of new ideas[br]for generating revenue. 0:07:42.128,0:07:45.775 So Disney can make a new[br]$200 million movie that flops, 0:07:45.799,0:07:47.887 and nobody calls the attorney general. 0:07:48.736,0:07:52.635 But you do a little $1 million[br]community fundraiser for the poor, 0:07:52.659,0:07:56.552 and it doesn't produce a 75 percent profit[br]to the cause in the first 12 months, 0:07:56.576,0:07:58.714 and your character[br]is called into question. 0:07:59.396,0:08:02.832 So nonprofits are really reluctant[br]to attempt any brave, 0:08:02.856,0:08:05.783 daring, giant-scale[br]new fundraising endeavors, 0:08:05.807,0:08:07.408 for fear that if the thing fails, 0:08:07.432,0:08:09.804 their reputations will be dragged[br]through the mud. 0:08:09.828,0:08:10.987 Well, you and I know 0:08:11.011,0:08:13.408 when you prohibit failure,[br]you kill innovation. 0:08:13.859,0:08:17.073 If you kill innovation in fundraising,[br]you can't raise more revenue; 0:08:17.097,0:08:19.378 if you can't raise more revenue,[br]you can't grow; 0:08:19.402,0:08:22.814 and if you can't grow, you can't[br]possibly solve large social problems. 0:08:23.608,0:08:25.481 The fourth area is time. 0:08:26.100,0:08:29.899 So Amazon went for six years[br]without returning any profit to investors, 0:08:29.923,0:08:31.401 and people had patience. 0:08:31.782,0:08:34.663 They knew that there was a long-term[br]objective down the line, 0:08:34.687,0:08:36.273 of building market dominance. 0:08:36.297,0:08:38.880 But if a nonprofit organization[br]ever had a dream 0:08:38.904,0:08:43.154 of building magnificent scale[br]that required that for six years, 0:08:43.178,0:08:45.042 no money was going to go to the needy, 0:08:45.066,0:08:47.702 it was all going to be invested[br]in building this scale, 0:08:47.726,0:08:49.226 we would expect a crucifixion. 0:08:50.543,0:08:52.170 The last area is profit itself. 0:08:52.194,0:08:54.710 So the for-profit sector[br]can pay people profits 0:08:54.734,0:08:57.307 in order to attract their capital[br]for their new ideas, 0:08:57.331,0:09:00.447 but you can't pay profits[br]in a nonprofit sector, 0:09:00.471,0:09:02.443 so the for-profit sector has a lock 0:09:02.467,0:09:04.948 on the multi-trillion-dollar[br]capital markets, 0:09:04.972,0:09:09.630 and the nonprofit sector is starved[br]for growth and risk and idea capital. 0:09:10.764,0:09:12.780 Well, you put those[br]five things together -- 0:09:12.804,0:09:15.958 you can't use money to lure talent[br]away from the for-profit sector; 0:09:15.982,0:09:18.173 you can't advertise[br]on anywhere near the scale 0:09:18.197,0:09:20.551 the for-profit sector[br]does for new customers; 0:09:20.575,0:09:23.539 you can't take the kinds of risks[br]in pursuit of those customers 0:09:23.563,0:09:25.251 that the for-profit sector takes; 0:09:25.275,0:09:28.908 you don't have the same amount of time[br]to find them as the for-profit sector; 0:09:28.932,0:09:31.996 and you don't have a stock market[br]with which to fund any of this, 0:09:32.020,0:09:34.132 even if you could do it[br]in the first place -- 0:09:34.156,0:09:36.076 and you've just put the nonprofit sector 0:09:36.100,0:09:38.760 at an extreme disadvantage[br]to the for-profit sector, 0:09:38.784,0:09:39.950 on every level. 0:09:42.061,0:09:45.227 If we have any doubts about the effects[br]of this separate rule book, 0:09:45.251,0:09:46.775 this statistic is sobering: 0:09:46.799,0:09:49.139 From 1970 to 2009, 0:09:49.163,0:09:51.894 the number of nonprofits that really grew, 0:09:51.918,0:09:55.098 that crossed the $50 million[br]annual revenue barrier, 0:09:55.122,0:09:56.756 is 144. 0:09:57.274,0:10:00.084 In the same time, the number[br]of for-profits that crossed it 0:10:00.108,0:10:02.247 is 46,136. 0:10:03.176,0:10:06.239 So we're dealing with social problems[br]that are massive in scale, 0:10:06.263,0:10:08.589 and our organizations[br]can't generate any scale. 0:10:08.613,0:10:11.414 All of the scale goes[br]to Coca-Cola and Burger King. 0:10:13.128,0:10:14.866 So why do we think this way? 0:10:15.779,0:10:19.992 Well, like most fanatical[br]dogma in America, 0:10:20.016,0:10:22.901 these ideas come from old Puritan beliefs. 0:10:23.481,0:10:26.552 The Puritans came here[br]for religious reasons, or so they said, 0:10:26.576,0:10:29.774 but they also came here because[br]they wanted to make a lot of money. 0:10:30.083,0:10:31.512 They were pious people, 0:10:31.536,0:10:34.551 but they were also[br]really aggressive capitalists, 0:10:34.575,0:10:38.095 and they were accused of extreme forms[br]of profit-making tendencies, 0:10:38.119,0:10:40.032 compared to the other colonists. 0:10:40.524,0:10:43.520 But at the same time,[br]the Puritans were Calvinists, 0:10:43.544,0:10:46.067 so they were taught literally[br]to hate themselves. 0:10:46.091,0:10:49.135 They were taught[br]that self-interest was a raging sea 0:10:49.159,0:10:51.746 that was a sure path to eternal damnation. 0:10:52.580,0:10:54.698 This created a real problem[br]for these people. 0:10:54.722,0:10:58.239 Here they've come all the way across[br]the Atlantic to make all this money, 0:10:58.263,0:11:01.438 but making all this money[br]will get you sent directly to Hell. 0:11:01.462,0:11:03.020 What were they to do about this? 0:11:03.334,0:11:04.972 Well, charity became their answer. 0:11:04.996,0:11:07.427 It became this economic sanctuary, 0:11:07.451,0:11:11.070 where they could do penance[br]for their profit-making tendencies -- 0:11:11.094,0:11:13.094 at five cents on the dollar. 0:11:14.079,0:11:16.413 So of course, how could you[br]make money in charity 0:11:16.437,0:11:18.761 if charity was your penance[br]for making money? 0:11:19.182,0:11:23.039 Financial incentive was exiled[br]from the realm of helping others, 0:11:23.063,0:11:26.468 so that it could thrive in the area[br]of making money for yourself, 0:11:26.492,0:11:29.659 and in 400 years, nothing has intervened 0:11:29.683,0:11:32.917 to say, "That's counterproductive[br]and that's unfair." 0:11:35.115,0:11:38.780 Now, this ideology gets policed[br]by this one very dangerous question, 0:11:38.804,0:11:43.084 which is, "What percentage of my donation[br]goes to the cause versus overhead?" 0:11:43.393,0:11:45.600 There are a lot of problems[br]with this question. 0:11:45.624,0:11:47.124 I'm going to just focus on two. 0:11:47.148,0:11:51.213 First, it makes us think[br]that overhead is a negative, 0:11:51.237,0:11:54.030 that it is somehow not part of the cause. 0:11:55.022,0:11:58.857 But it absolutely is, especially[br]if it's being used for growth. 0:11:59.991,0:12:03.912 Now, this idea that overhead[br]is somehow an enemy of the cause 0:12:03.936,0:12:06.437 creates this second, much larger problem, 0:12:06.461,0:12:10.297 which is, it forces organizations[br]to go without the overhead things 0:12:10.321,0:12:11.929 they really need to grow, 0:12:11.953,0:12:14.225 in the interest of keeping overhead low. 0:12:14.924,0:12:17.432 So we've all been taught[br]that charities should spend 0:12:17.456,0:12:20.231 as little as possible on overhead[br]things like fundraising 0:12:20.255,0:12:23.629 under the theory that, well, the less[br]money you spend on fundraising, 0:12:23.653,0:12:26.454 the more money there is[br]available for the cause. 0:12:27.335,0:12:29.678 Well, that's true[br]if it's a depressing world 0:12:29.702,0:12:32.405 in which this pie cannot[br]be made any bigger. 0:12:33.120,0:12:36.485 But if it's a logical world[br]in which investment in fundraising 0:12:36.509,0:12:39.995 actually raises more funds[br]and makes the pie bigger, 0:12:40.019,0:12:41.876 then we have it precisely backwards, 0:12:41.900,0:12:45.448 and we should be investing more money,[br]not less, in fundraising, 0:12:45.472,0:12:47.201 because fundraising is the one thing 0:12:47.225,0:12:49.836 that has the potential[br]to multiply the amount of money 0:12:49.860,0:12:52.677 available for the cause[br]that we care about so deeply. 0:12:54.487,0:12:55.780 I'll give you two examples. 0:12:55.804,0:12:57.050 We launched the AIDSRides 0:12:57.074,0:13:00.146 with an initial investment[br]of 50,000 dollars in risk capital. 0:13:00.606,0:13:05.585 Within nine years,[br]we had multiplied that 1,982 times, 0:13:05.609,0:13:09.799 into 108 million dollars[br]after all expenses, for AIDS services. 0:13:11.218,0:13:13.131 We launched the breast cancer three-days 0:13:13.155,0:13:16.618 with an initial investment[br]of 350,000 dollars in risk capital. 0:13:16.983,0:13:21.713 Within just five years,[br]we had multiplied that 554 times, 0:13:21.737,0:13:25.316 into 194 million dollars[br]after all expenses, 0:13:25.340,0:13:26.661 for breast cancer research. 0:13:26.970,0:13:30.284 Now, if you were a philanthropist[br]really interested in breast cancer, 0:13:30.308,0:13:31.601 what would make more sense: 0:13:31.625,0:13:35.476 go out and find the most innovative[br]researcher in the world 0:13:35.500,0:13:38.880 and give her 350,000 dollars for research, 0:13:38.904,0:13:42.523 or give her fundraising[br]department the 350,000 dollars 0:13:42.547,0:13:46.832 to multiply it into 194 million dollars[br]for breast cancer research? 0:13:47.800,0:13:50.825 2002 was our most successful year ever. 0:13:50.849,0:13:53.983 We netted for breast cancer[br]alone, that year alone, 0:13:54.007,0:13:57.094 71 million dollars after all expenses. 0:13:57.853,0:14:00.173 And then we went out of business, 0:14:00.197,0:14:02.015 suddenly and traumatically. 0:14:03.309,0:14:08.023 Why? Well, the short story is,[br]our sponsors split on us. 0:14:08.047,0:14:10.110 They wanted to distance themselves from us 0:14:10.134,0:14:12.991 because we were being[br]crucified in the media 0:14:13.015,0:14:16.393 for investing 40 percent[br]of the gross in recruitment 0:14:16.417,0:14:19.781 and customer service[br]and the magic of the experience, 0:14:19.805,0:14:22.668 and there is no accounting[br]terminology to describe 0:14:22.692,0:14:25.842 that kind of investment[br]in growth and in the future, 0:14:25.866,0:14:28.810 other than this demonic[br]label of "overhead." 0:14:30.778,0:14:36.152 So on one day, all 350[br]of our great employees 0:14:36.176,0:14:37.802 lost their jobs ... 0:14:40.660,0:14:42.485 because they were labeled "overhead." 0:14:43.818,0:14:46.358 Our sponsor went and tried[br]the events on their own. 0:14:46.382,0:14:47.715 The overhead went up. 0:14:47.739,0:14:51.508 Net income for breast cancer research[br]went down by 84 percent, 0:14:51.532,0:14:54.450 or 60 million dollars, in one year. 0:14:55.984,0:15:01.381 This is what happens when we confuse[br]morality with frugality. 0:15:03.359,0:15:06.525 We've all been taught that the bake sale[br]with five percent overhead 0:15:06.549,0:15:09.500 is morally superior to the professional[br]fundraising enterprise 0:15:09.524,0:15:11.190 with 40 percent overhead, 0:15:11.214,0:15:14.491 but we're missing the most important[br]piece of information, which is: 0:15:14.515,0:15:16.991 What is the actual size of these pies? 0:15:17.674,0:15:21.593 Who cares if the bake sale only has[br]five percent overhead if it's tiny? 0:15:22.313,0:15:25.145 What if the bake sale[br]only netted 71 dollars for charity 0:15:25.169,0:15:27.193 because it made no investment in its scale 0:15:27.217,0:15:29.598 and the professional[br]fundraising enterprise netted 0:15:29.622,0:15:31.928 71 million dollars because it did? 0:15:32.571,0:15:34.166 Now which pie would we prefer, 0:15:34.190,0:15:37.285 and which pie do we think people[br]who are hungry would prefer? 0:15:38.317,0:15:41.263 Here's how all of this[br]impacts the big picture. 0:15:41.991,0:15:45.468 I said that charitable giving is[br]two percent of GDP in the United States. 0:15:45.492,0:15:48.182 That's about 300 billion dollars a year. 0:15:48.206,0:15:51.569 But only about 20 percent of that,[br]or 60 billion dollars, 0:15:51.593,0:15:53.546 goes to health and human services causes. 0:15:53.570,0:15:57.196 The rest goes to religion[br]and higher education and hospitals, 0:15:57.220,0:16:00.118 and that 60 billion dollars[br]is not nearly enough 0:16:00.142,0:16:01.697 to tackle these problems. 0:16:02.349,0:16:06.699 But if we could move charitable giving[br]from two percent of GDP, 0:16:06.723,0:16:13.361 up just one step to three percent of GDP,[br]by investing in that growth, 0:16:13.385,0:16:17.420 that would be an extra 150 billion dollars[br]a year in contributions, 0:16:17.444,0:16:19.802 and if that money[br]could go disproportionately 0:16:19.826,0:16:21.685 to health and human services charities, 0:16:21.709,0:16:24.948 because those were the ones we encouraged[br]to invest in their growth, 0:16:24.972,0:16:28.730 that would represent a tripling[br]of contributions to that sector. 0:16:29.313,0:16:30.921 Now we're talking scale. 0:16:30.945,0:16:33.429 Now we're talking the potential[br]for real change. 0:16:34.571,0:16:37.666 But it's never going to happen[br]by forcing these organizations 0:16:37.690,0:16:39.518 to lower their horizons 0:16:39.542,0:16:43.161 to the demoralizing objective[br]of keeping their overhead low. 0:16:45.137,0:16:48.469 Our generation does not want[br]its epitaph to read, 0:16:48.493,0:16:50.620 "We kept charity overhead low." 0:16:50.644,0:16:55.168 (Laughter) 0:16:55.192,0:16:59.024 (Applause) 0:16:59.048,0:17:01.255 We want it to read[br]that we changed the world, 0:17:01.279,0:17:02.994 and that part of the way we did that 0:17:03.018,0:17:05.607 was by changing the way[br]we think about these things. 0:17:06.306,0:17:08.433 So the next time[br]you're looking at a charity, 0:17:08.457,0:17:10.538 don't ask about the rate[br]of their overhead. 0:17:10.562,0:17:12.877 Ask about the scale of their dreams, 0:17:12.901,0:17:16.457 their Apple-, Google-,[br]Amazon-scale dreams, 0:17:16.481,0:17:18.950 how they measure their progress[br]toward those dreams, 0:17:18.974,0:17:21.609 and what resources they need[br]to make them come true, 0:17:21.633,0:17:23.396 regardless of what the overhead is. 0:17:23.420,0:17:25.024 Who cares what the overhead is 0:17:25.048,0:17:27.383 if these problems[br]are actually getting solved? 0:17:28.367,0:17:31.343 If we can have that kind of generosity -- 0:17:31.367,0:17:33.495 a generosity of thought -- 0:17:33.519,0:17:36.395 then the non-profit sector[br]can play a massive role 0:17:36.419,0:17:39.851 in changing the world[br]for all those citizens 0:17:39.875,0:17:42.468 most desperately in need of it to change. 0:17:45.816,0:17:48.946 And if that can be[br]our generation's enduring legacy -- 0:17:50.662,0:17:53.534 that we took responsibility 0:17:53.558,0:17:56.053 for the thinking that had[br]been handed down to us, 0:17:56.077,0:17:58.893 that we revisited it, we revised it, 0:17:58.917,0:18:02.999 and we reinvented the whole way[br]humanity thinks about changing things, 0:18:03.023,0:18:06.499 forever, for everyone -- 0:18:06.523,0:18:10.317 well, I thought I would let[br]the kids sum up what that would be. 0:18:11.301,0:18:13.152 Annalisa Smith-Pallotta: That would be 0:18:13.176,0:18:15.158 Sage Smith-Pallotta: a real social 0:18:15.182,0:18:17.008 Rider Smith-Pallotta: innovation. 0:18:17.428,0:18:19.079 Dan Pallotta: Thank you very much. 0:18:19.103,0:18:20.358 Thank you. 0:18:20.382,0:18:27.329 (Applause) 0:18:29.518,0:18:30.691 Thank you. 0:18:30.715,0:18:33.753 (Applause)