Anne Wojcicki and Laura Arrillaga-Andreessen on a New Vision for Philanthropy

I'm Bethany McLean. I'm a contributing editor at Vanity Fair. I generally tend to write stories about business gone wrong and oddly enough those stories usually seem to be about men. So it is a great pleasure to be here with two amazing women who are devoting all their resources to making the world a better place and I'd love to get to the multifaceted nature of what you both do but I thought I'd start by asking you if we could fast-forward ten years and you were to see what what would your contribution be to having made the world a better place. And I wanted to start with you Laura since you famously say you have two and five and ten year plans. I'm slightly a bit of an over planner. I will own that in its entirety. I think my grand vision for ten years from now would be to fundamentally change how people give and I would do that through three different vehicles. Educational, individual and institutional. Educationally when we think about the broader context of how academia evolves. In 1962 Purdue held the very first CS course and in 1965 Stanford followed on the West Coast. When I began teaching at Stanford Graduate School of Business in the year 2000 no field-based course in strategic philanthropy had ever been taught before. There was absolutely no basis in academia for the subject matter. So I have devoted the last 15 years of my life to building the academic field of strategic philanthropy and when we think about the fact that right now in the 2,775 four-year colleges in the U.S. we have about 13.7 million students and if we shoot out ten years from now that's about 34.25 million students and just imagine the power of social transformation if those students which who now are required to take CS were also required to take a strategic philanthropy course. So number one is I want strategic philanthropy to be a core part of every four-year college education and curriculum in the country. Number two is individual philanthropy. So last year individuals, corporations and foundations gave about $355 billion. Eighty percent of that was given by individual Americans and about 64.2 million Americans volunteered their time. Now when you break down individual giving which is about $277 billion in financial capital and about $175 billion in human capital, 65% of Americans give based purely on emotion. There is no research behind that giving and I see that as massively untapped potential for our ability to create social change and so ten years from now I would like to see those numbers reversed. 65% of giving is based on research. We have to take our philanthropic investments with the same level of seriousness as we do our for-profit investments because it's individual lives not profits that are at stake. And finally with institutional philanthropy we have this extraordinary opportunity right now because of how technology is fundamentally disrupting philanthropy to create an entire new culture of accountability and transparency for what are essentially public dollars for public good under private control and traditionally foundations have operated primarily as ivory-towered silos, not sharing the research, not sharing successes or failures and now we have the opportunity to take all of that extraordinary institutional knowledge and start decreasing the rate at which we are incessantly reinventing the philanthropic wheel. So let's get in a way that matters more. Come on people. And you've said that being famous and rich isn't that interesting. I want to be famous because I transformed health care. Talk about that in your 10-year plan. Yeah I have, I've always for some reason liked health care. I've always been really interested in you know just the emotion when people are sick and I find that you know when people are sick it's the ultimate equalizer of humanity. It doesn't matter if you're rich or you're poor, if you're you know in a car accident you're in San Francisco General you have roughly the same reactions and so I've always liked that and I've always liked aspects of society that sort of democratize each other and I have this issue when I was on Wall Street where I felt like there is you know when I look at sort of the health care system as it is today it's not necessarily aligned with what my personal interests are. So for instance as an analyst you would you know follow mortality trends during the winter because a bad flu season means more people are going to the hospitals and therefore you buy hospital stocks because you make money in a hospital when people are sick and in the beds. And and so I kind of felt like well that's not that's not in my interest and you know you look at things like type 2 diabetes where lots of people know how to make money if you're diabetic but who makes money if you're not diabetic. So there's this inherent conflict and and I think that a lot of corporations get away with the sense that I have a fiduciary responsibility I have to do what's best for the bottom line and and while I think that's true like companies have a fiduciary responsibility I do strongly believe that there's still a way for companies to make money while still doing what is the right thing to do. And so 23andMe was started really with this idea of trying to drive transformation in health care with putting the consumer in the forefront. And one of the things that I think a lot of people don't necessarily realize is how much you the individual doesn't actually have a voice in your own health care. And there was a great article that came out in New York Times a couple weeks ago and it talked about this patient who had surgery and there is a bill from a surgeon for a hundred and fifteen thousand dollars that and they'd never met the surgeon and they were just consulting on it and and like that kind of concept that like there's people involved in your care and there's things happening to you all the time that you don't even know about and and fundamentally like you should own your information like you should be able to make those decisions. So 23andMe was set out with this idea that it should be a social revolution and we did not set it up as a nonprofit because I actually think that having it as a for-profit of some of you know attracting the kind of talent that wants to go into a for-profit company but also really trying to drive change that we would be more successful as a for-profit than as a nonprofit. And so we've made a lot of decisions at this company that are antithetical to the traditional health care industry. So for instance we sell a comprehensive genetic screen that is $99 and most other people sell something that's comparable but you have to go through your physician and it reimburses from the insurance industry for up to you know a couple thousand dollars. So technically we could be going in that same route of actually going leveraging and getting money from the insurance industry but it just seemed wrong that part of what we're trying to do is empower individuals to actually take more ownership of their health and to actually really try if we're going to try to cut costs then that we should actually commoditize products that are actually a commodity. So you look at so many things in health care like the diabetes strip they cost a dollar each or band-aids why are they so expensive like commodities should be at commodity pricing and so part of we're trying to do is drive those changes and I believe that there are still business models that we can that we can be sustainable that we can actually be profitable and actually highly profitable while still doing something that is actually going to drive social change. And Laura has called your approach a trifecta approach because you work through your company you work through your charitable contributions and you work through political influence. Why do you need to do these three approaches? Why is more more? Well I think I mean the one thing that's interesting for me about what I do is I don't really have whether it's good or bad I don't really have a borderline between what my what my work interests are and what my personal interests are so everything that I do like I kind of live and breathe what I do I love it like I absolutely love it and I think about it from a philanthropic like a pure philanthropic perspective of like what's a way that I could really drive change with that what's a drive way I could drive change with my with with the company and then on the political side political side is a little bit new to me I didn't have the pleasure of really being involved until last year when we unfortunately had to stop selling our health care product because the FDA sent us a warning letter so we haven't been able to continue selling the health product and that's been a new world for me of getting involved in politics and actually then continuing to and I understand this much better now how much that whole world influences this whole technology world and like the startup world and the world is trying to change and that to really be most successful you have to integrate those two like I can't do what I want to do without also getting sort of the framework for this country being like the FDA again and sort of the entire health healthcare system understanding what we're doing and actually aligned I want to come back to Washington but I want to talk about your multifaceted approach too because you work through so many different channels to accomplish your goals and do you see those all fitting together oh absolutely my my teaching at Stanford my academic research my work at Stanford Center on philanthropy and civil society and all of our scholars it's so many different levels as well as my work in the venture philanthropy space and at last my foundation and foundation that my beloved and I will launch in the coming year everything is completely informative and influential being both a academic and a practitioner I like to call myself a proc academic because everything that I teach in the classroom and that I write about in articles and cases are things that I own in my own philanthropic practice I think teaching a practical field without actually practicing what it is you teach is definitely not the most effective way to create the new generation of change makers but I must say the most rewarding part of my work is the fact that now that I have a student alumni group of about 500 students and I'm just began this week so there's still time to sign up teaching my first massively open online course giving 2.0 the MOOC on the Coursera platform I'm creating this extraordinary network of new generation social change actors and social change leaders and for me the single most beautiful part of what I do is ultimately being a part of helping transform the course of students lives so that ultimately they become my colleagues in philanthropic change I think we should have a contest between the words pro-academic philanthro capitalism and social entrepreneurship pro-academic so wins so Laura you've also talked about this convergence between philanthropy and technology maybe we can call it philanthro-ology but you've said it's so exciting that I can't stand it and that it's the reason you never sleep a little bit more about there's a lot of under eye cover-up that happened this morning in the hair and makeup room yes almost impossible to sleep given what is going on right now in the world so we're seeing especially here in Silicon Valley it's very difficult for me to remain calm when talking about this subject because it's so exciting but we're seeing this unprecedented convergence between a new social consciousness a new generation of entrepreneurs both for-profit and social as well as a new generation of technology innovation so social consciousness now we are living in a world where we have Gen X the tail end the second half of Gen X and Gen Y who have either grown up or become grown-ups as digital natives growing up with a global awareness and a sense of community because of social and mobile a sense of community that transcends geographic boundaries and this is a group of people as I said with social consciousness built into their DNA such that they are making we are making our decisions whether it's how we spend our time what companies we work for how we create the organization's for-profit or nonprofit that we do as entrepreneurs what purchasing decisions we make are based with our social consciousness in mind and when you think about the fact that right now we have about 80 million Millennials in this country by 2017 they're going to make up the majority of consumer decisions and by 2020 they're going to make up 50% of our workforce so making sure that what we are creating in the world accommodates this new generation is absolutely critical and as we have new generation entrepreneurs such as and would just be such as so many other of the individuals who are speaking at this extraordinary convening we have a generation of actors who are fundamentally changing business models so in the for-profit sector we're seeing companies like 23andMe and NationBuilder and change.org that have social change components integrated into either their mission or their respective products and then we have social entrepreneurs such as Lila Janna from Samasource and Vineet Singhal from Care Message who are creating for-profit revenue models in their nonprofit organizations and these new entrepreneurs are changing the entire game for all of us and then we have this whole new realm of technology innovation that are not only changing how we create consume connect and collaborate but they're also changing how we give how we receive how we create social change in the world and who gets to participate in that social change so technology to Ann's point what is most exciting about technology right now is the fact that excuse me just add a little suspense to what I'm about to say is the fact that technology is democratizing access it's democratizing access to information to networks as well as to feedback loops which lead to rapid product innovation iteration that we've never had before so with regard to information if I may just quickly quickly say now you can go online and have access to the funding portfolios of the Skoll Foundation Robin Hood Foundation Hewlett Foundation there are organizations that actually do the due diligence for you like give well this is like having free access to the top money managers investment portfolios access to networks individuals can now collaborate problem-solve develop an entire social change movement by merely going online and tapping into their social network and in turn leveraging the social networks of everyone that they directly know to create massive social change around a particular social cause and then finally with with technology we can do rapid prototyping we've never been able to do before through 3d printing through computer modeling through simulation and this enables an entire new generation of nonprofits crisis text line being one of my very favorites that is actually embedding data collection and analysis into the core product so crisis text line which was created a year ago has is that actually you text in as a suicide or domestic abuse or sexual abuse or drug usage crisis line and now that they've been operating for a year for 12 months with 11,000 texts a day they're getting from individuals they have enough velocity and variety and volume of data that they can actually create value from that corpus and become predictive in how they respond to individuals who are literally in the middle of a crisis so they're essentially using mobile data to bring science to counseling for teens so it's just it's just extraordinary and technological innovation meets Washington DC which one wins well I think what's interesting what Laura brings up is like there's all this innovation it's all this innovation that happens in this valley and it's amazing it's amazing to actually see what can happen and how you can get these people like somersaults and these other groups that are taking great ideas and able to evolve and actually apply it to the good and and they can they can iterate quickly and and move on and I think one of the challenges in health care like I would push a little bit on like on the philanthropy side like like are there the same types of companies in health care and there's not like most of us in this room have probably done a walk-a-thon or we've donated money to a hospital or a physician but but like have you actually ever really followed the trail of that money to where it goes and it's one of the things that I always look at like when I meet with you know foundation heads or groups and I'll say like what what have you actually done and they'll say like oh well we published a lot of papers I'm like well what did the papers actually mean and a lot of papers are still they're not in an open source journal like it's amazing to me that when you talk about the technological innovation and you have all these federally funded or publicly funded studies but then they're still not accessible to you because you have to pay an additional $25 to the journal for it like it becomes sort of an outrage like there's all these there's all these things that that really inhibit I think health care and basic research from moving forward and I think part of it I point a little bit of a finger to just like some of how it's regulated is that it's actually hard to get you know it's sort of the patent world and the regulation means that there's just not as much competition and innovation and health care and I think that scientists have unfortunately done this tragedy to all of us thinking that like when I wear the white coat or when I'm a scientist and I have a PhD behind my name you can't actually understand these things and you know it's it's it you know part of the whole the the genesis for me on this is my father was a or he has a particle physicist at Stanford and he had a big project called the superconducting super collider which got shut down in 1992 and and in part it failed like there's this comment where it said like oh you know we got ---- shut down as a result of the C physics student who's now in Congress and like that kind of animosity between those two worlds doesn't really help engage the society and so I do think that a lot of these things it's sort of a tragedy that like this world of technology is not able to evolve as quickly in health care in part because of the regulation and I think that there are now sort of guidelines coming out of DC in terms of like mobile apps you know like should how should we actually regulate these should web MD for instance and they have their symptom checker should that be regulated when you go to type in a search on Google like should that be regulated so like they think there's all kinds of interesting questions now coming out about like what is a device and how should we actually be looking at all this and I think that there's definitely a sense and a commitment from everyone that I have met in Washington now that we need to actually bring that kind of innovation into health care but understanding exactly how because the fundamentals is that health care is a regulated industry and when you're really regulated it does just fundamentally slow it down so I think that's where I'm eager I mean part of that for me the innovation of the loophole in health care is that you own your own data but like if you raise your hand you say like how many of you have actually ever pulled your medical record like how many of you actually haven't on your own a few of you eager beavers so so but like most of us don't but all of you have your online bank account I mean it'd be kind of insane today if you didn't have an online bank account but most people today don't actually have their online portfolio of all their health information that's scattered everywhere and to me that's just unacceptable like you should be able to have this and there's all like in the technology it's clearly here to be able to do it but part is because the system and the regulation like doesn't easily enable that yet and that's part of what I'm trying to break down is by empowering the consumer is making people aware and angry and eager to say like I should actually be in charge of my own health and that that's actually I think how 23andMe part of the biggest thing that we're driving is that kind of change like again for-profit company adopting technology but driving that change. Laura you talked about people being more thoughtful about how they give money putting more analysis into it you teach philanthropy can we get there can you ever make this a science or is there always going to be a trial-and-error aspect to philanthropy? Well I think like any type of investment there is always a risk but as philanthropists whether we're doing it through our companies or through our personal resources or by volunteering our time the onus is completely on us as individuals to do everything that we can to mitigate that risk as much as possible and when you think about the fact that we have as of yesterday the total market cap was about twenty point three trillion dollars we have GDP at about sixteen point eight trillion and we have the federal budget at about three point five trillion and then we have philanthropy at three hundred fifty five billion so that's only about nine and a half percent of our of the federal budget. When you think about the fact that philanthropy is viewed as society's risk capital but we only have this teensy amount of money to take risks with that capital in comparison to what's happening in the for-profit sector and in the government it's pretty extraordinary to think about how it is we're going to make decisions because as philanthropists we're going to fund the innovations or the zero to ones as Peter Thiel says in his amazing new book but we're also going to fund the one to ends. We're going to scale existing programs that we hope we've done the research to know are proven empirically so for us as individuals we should never make a gift unless we can answer the three most basic questions. Number one how are we going to know that our gift has specifically translated into social change? What are the short-term intermediate term and long-term indicators that our generosity meant something? Number two how is it that we are going to ensure that each investment we make is the single best philanthropic bang for our buck because every decision to invest in one nonprofit is a decision not to invest in countless other nonprofits and finally and perhaps most importantly what have we learned from making this gift either from its success or its failure that we can share ideally virally with others because we have to eliminate the incessant reinvention of the social change wheel. So it is time for Q&A. Do we have some questions? I see one over there. Go ahead. Hi my name is Manny Coutillel. First of all thank you so much for coming here and speaking today. We really appreciate it. If there's one theme that I've seen that's cut across all the different amazing talks that we've had so far it's that individual leadership matters especially in the companies that are represented here today. We have a lot of people who run a lot of really wonderful companies so my question to you is how can the CEO or executive of a company give in a way that is illustrative or catalyzes the thousands of employees that look up to them for leadership to also give? Would you like me to start or would you like to start? Either way. We can wrestle. Graydon would love that. We would never have a summit again. Excellent question. Thank you Manny. I think that looking to the examples of individuals like Mark Benioff who created the 1-1-1 model or Mark Zuckerberg who's being an extraordinary philanthropist at an extraordinarily young age or Anne with her incredible philanthropy. It's really again about walking the talk and I think it is essential for any company who's engaging in philanthropy for that philanthropy to be fully aligned with its business strategy. There should be underlying incentives for companies to create social change because especially as we think about Millennials driving the workforce in a mere six years these are individuals where according to recent studies 72% of Millennials said creating positive social impact is critically important in their job and 82% of them want to work for a company or 80% want to work for a company that has a powerful philanthropic or social change creation component and so it can be as easy as letting employees integrate or layer social change products on top of existing products whether it's in gaming or mobile or new apps whatever the opportunities are limitless. I mean I think it has to do with how we make decisions as a company so as much you know lots of people in the company have the ability to make their own decisions and it's sort of you know it's different opportunities I said a sort of strategic vision and occasionally I have to come in and try to change course but but the decisions that I make I think try to give everybody the sense of that we are on a mission and you know we have one employee at the company who said at some conference he's like look like I'm at 23andMe because if we weren't doing this no one else would and we have taken on as a company certain certain projects even though we are not profitable right now we've taken on projects and that we strongly believe are important mission-wise for the company so for instance most genetic studies today are done on European populations so that will be a tragedy because we understand genetic function in Europeans but not necessarily as well in African-Americans or in Asian Southeast Asians etc so we gave away 10,000 free kits to African-Americans with this idea of trying to encourage more genetic and the understanding of more genetic diversity and that we would do those types of research projects and so we've like as a company we take on things like this and the other time we went to NIH and we did we showed them all the research that we're doing and at one point someone at NIH which is you know nonprofit and they're like why do you do this and and I was like because it's it's important like it's important to do and we can do it and we're evolving this new model so I think it's really important to lead not necessarily just with my actions but sort of with the strategy of the company and really sticking true to the mission and when we start to go off course it's my job then to make sure that we really be correct. Thank you. Hi thank you it's Joanna Brignolo from Washington DC I think you probably partially answered the question because I was most curious about your baptism in by Congress when you came to Washington and I can only applaud you for trying to to make a difference and perhaps you could become our healthcare czar. Would you take a government position? You know I so I've had a kind of unusual view of Washington so we had in 2010 there was a congressional hearing and my general counsel at the time was obviously not excited about this so there was a GAO report was written we had to testify and I kept saying to her I was like it's like our prom like this is this is so exciting like we have to go shopping we have to look good I was like it is really I was like we've made it like we managed to sort of aggravate the system enough like that they want us to come and talk to them like if there wasn't a hearing then we wouldn't have been really doing anything interesting so we always want to be like we are scientifically responsible we try to be socially responsible we want to do the right thing but we also very much want to push the system because we're trying intentionally to drive change so I have been naive I think enough about how DC actually works and I am understanding this better now in terms of how everything I am I am fascinated I'm going there probably every other month I definitely I have a real appreciation I think for how the system works and how you have the collaboration and I would love to be involved in DC I have I've you know I've talked to Megan Smith who is now the CTO for the country I specifically went and said what can I do to sort of help encourage you know one more people to think about health care because there's not a lot of people in the valley right now thinking about how to drive change in health care and and to like what is that what is the right framework that we really need to have to encourage innovation and we just don't have that like most of the money right now goes into things that are going to you know develop a drug or something that's gonna have patents and gonna have things that are not necessarily in our individuals interest so yes I'm happy to go to DC I think we have time for one more over on this side hi I'm Lawrence I'm a sophomore at Stanford and I'm really interested in philanthropy and Laura has been teaching me a lot about the strategic philanthropy she's amazing so here in Silicon Valley as you mentioned we have so much talent and so much innovation but one of the things that disappoint me is to see that a lot of this talent is wasted into ideas that don't really generate social or technical change so I guess this is really related to the to some type of mindset in Silicon Valley that's really focused on profit so how would you solve this yeah thank you for the question I I would agree that there is a group of companies that are providing the underlying architecture that we need to create the apps and the software and the platforms to create social change I think that what you're probably referring to is an older generation of companies and I think by the time that you graduate you are going to be pleasantly surprised by all the extraordinary for-profit companies that are creating spectacular social good well I think we're about out of time anyway so thank you so much you guys are incredible