Following the example set by philanthropists like Warren Buffett and Bill Gates, the venture capitalists at Andreessen Horowitz have made a joint pledge to donate at least half of their substantial incomes to charity.
The firm’s six general partners all made the commitment, which was announced today in a blog post by founding partner Marc Andreessen. It’s a public promise to “donate at least half of all income from our venture capital careers to philanthropic causes during our lifetimes.” That includes income from salaries, investments, and the “carry” that each partner collects as a share of the firm’s profit from its funds.
“It’s our way to give back,” founding partner Ben Horowitz said in a call with VentureBeat today. “We feel that we’re part of the Silicon Valley team, and because we’re in venture capital, we wind up making more money than, say, a local schoolteacher, but not because we’re smarter or doing a better job.”
“We very much appreciate the position we’re in and being able to do what we do,” Horowitz continued. “We’re just trying to give back.”
Plus, Horowitz said, the partners don’t have expensive hobbies like playing polo, flying balloons around the world, or building spaceships, so they decided to put their wealth into something productive.
Horowitz acknowledged the example set by Buffett, who has pledged to donate the majority of his fortune to charity, and has encouraged other wealthy individuals to do the same. He and Andreessen also gave credit to other individual venture capitalists, such as John Doerr and Michael Moritz, who have been active philanthropists and have “set a great example.”
This is the first such pledge on behalf of an entire firm that we know of, however.
Andreessen acknowledged the influence of his wife, Laura Andreessen, who teaches philanthropy at Stanford, has started a philanthropy research institute at the university, and is the author of “Giving 2.0,” a recent book on the topic.
“She’s teaching me a thing or two,” Andreessen said.
The firm kicked off its pledge with a donation of a collection $1 million to six local, Silicon Valley-based charities. The charities each partner is funding are as follows:
- Ben and Felicia Horowitz: Via Services
- Jeff and Karen Jordan: Ecumenical Hunger Program
- John O’Farrell and Gloria Principe: Second Harvest Food Bank
- Marc and Laura Andreessen: Fresh Lifelines for Youth
- Peter and Martha Levine: Canopy
- Scott and Pamela Weiss: The Shelter Network
That’s just the first of what the partners hope will be many more substantial gifts to come. However, they haven’t put a dollar amount or a goal on their pledge, as it depends on how much profit the firm’s funds produce.
“We have very big dreams of being a very big venture capital firm and returning billions of dollars to our investors and generating billions of dollars in carry,” said Horowitz. “But of course we could fall on our faces and generate nothing,” which would leave nothing for charity.
That seems unlikely: The firm’s first fund has already returned almost the entire $300 million its investors pledged, after less than three years, which means it’s well on pace to return substantial profits over the rest of the fund’s 10-year lifespan.