Stewards of Wealth Streams
Russ Hall, cofounder of Legacy Venture, has seen the good that wealth can do. He is a fellow at the American Leadership Forum of Silicon Valley and a board member of a variety of philanthropic groups, including Stanford's Center on Philanthropy and Civil Society and the Global Philanthropy Forum.
While Wilhelms is addressing how companies are now pursuing a double or triple bottom line impact, Hall is addressing how individuals and foundations can multiply their impact.
After a successful career in marketing and sales in Silicon Valley, Hall cofounded Legacy in 1999, and its sister foundation, Legacy Works, a few years later. Highly influenced by Bob Buford's Halftime ministries, Hall and partner Jim Anderson wanted to harness venture capital—the early stage, high-risk investment so essential to Silicon Valley startups—with investors' desire to give back.
Here's how it works: Legacy Venture takes advantage of a charity tax break by helping their partners (LPs) invest in premier venture capital firms while offering a low fee structure. In exchange for such investment opportunities, LPs agree to donate all principal and profits to the causes of their choice.
"If you are lucky enough to be in venture, you often have a whole satchel of scattered things you've invested in," says Hall. "At some point, you [have a] stock that's done as well as it's going to do, and [you] want to invest in something else. You'd sell it or you'd give that to your philanthropy because if you sold it, you'd have to pay the tax man."
Since its founding, Legacy members have committed to invest more than $1 billion. Hall describes it as "amplifying the size and effectiveness of people's philanthropy."
Legacy Venture may sound too abstract to have any real-world impact, but a visit to its offices proves otherwise. There, Hall points to colorful frames on the walls. Pictures of wells, of children under insect nets, of women selling fruits and vegetables at the market demonstrate the work funded by LPs. Hall holds up a pair of glasses that look like party favors—a large plastic screw on each side of the frame. These are adjustable prescription glasses and cost just a few dollars. Anyone can wear them, twist the screws until the prescription is right, and then break the screws off. It's an invention funded by a Legacy LP, and an example of Silicon Valley wealth used for good.
Silicon Valley is home to a large segment of nouveau riche, Hall says—a group that often wants to give back but doesn't have the family history to teach them how. Legacy Works offers regular events where investors learn about new charities and how to effectively serve boards. "We try to build this community that will hopefully do a better job," Hall says. "The good and bad news of venture is it doesn't work overnight. It takes a decade, give or take, to work. We've got their attention for a decade, so it's a chance to draw them in, and maybe they get intercepted by a broader vision of what they can do.