Do the right thing

Weekly reflection

Doing the right thing is deeply embedded in the culture of NGP Capital. In normal times, this means doing our best for our portfolio companies and investors. But times have changed, and the carnage of crisis lies all about us — lost lives, lost jobs, faltering economies, failing companies.

During crises, speed is of the essence…fast-changing conditions require us to move in cut-rate time. Accelerating timelines tend to narrow our range of view. It is natural to go into firefighting mode, for the urgent to preside over the important.

A sense of duty calls us to focus where we can help most in areas of direct responsibility. Yet a sense of responsibility calls us to look more broadly. As our world turns upside down, ‘doing the right thing’ invokes a more expansive mandate. What can we do to help those who are suffering in our communities? NGP Capital has decided that savings during the shutdown will go to help in our communities.

I have spent nearly half my career investing to alleviate poverty. Ralph Waldo Emerson was my beacon from a young age: “The purpose of life is…to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well.” My father, a missionary and minister, inculcated in me the value of a purpose-driven life. My colleagues and I have debated over many years how to invest both profitably and wisely. I have long sought to apply private-sector investment responses to public policy issues.

This weekend, I read Giving Done Right: Effective Philanthropy and Making Every Dollar Count by Phil Buchanon, President of the Center for Effective Philanthropy. Having left the IFC nearly 15 years ago, I wanted a refresh on the latest in philanthropy, in preparation for our upcoming discussions. The following are six principles from Giving Done Right are:

1. Clear goals, the fewer the better: Most foundations focus on a singular mission or, at most, a narrow set of goals. The Gates Foundation, with $40 billion under management, focused at the outset on just two areas: world health and US education. Jim Collins, who studied non-profits after publishing his book Good to Great, put it this way: “Disciplined action begins with piercing clarity about what you choose not to do. In a world awash with opportunity for contribution, it’s what we choose not to do because there is so much to do.”

2. Find the gaps: “Where can I do most good?” This is a better guide than, “What is the most important issue?” Our economies are awash in government funding and our donations are miniscule relative to the need all around us. Focus on tangible, yet underserved situations where we can do the most good with our available resources. “The Life You Can Save” is powerful and worth consideration.

3. Look for leverage: Giving is collaborative, not competitive. Goal selection should not focus on uniqueness. Garnering more resources toward a cause increases the likelihood of success.

4. “Audacious in ambition, humble in approach”Stephen Heintz, Rockefeller Brothers Fund: Be passionate in ambition but dispassionate in approach. Heintz highlights the need to be realistic. Too often, givers have hugely ambitious goals detached from the reality of how difficult it is to achieve them. Strategy needs to be iterative to be effective, while relying on local expertise.

5. Disaster response: Giving locally is important, as it responds to a deep-seated human need to help those in our communities. Groups that have capacity to respond on the ground are most effective. Funding often tends to go to brand-name organizations that lack the local knowledge to be effective.

6. Time, Treasure, Talent: Find causes that you can engage in multiple ways, donating your expertise and effort as well as your funds. Consider what you can do to engage personally. Consider a matching grant or committing your time and talent to the cause.

Make a difference and be the best you this week!

Paul Asel is a global technology investor across the U.S., Europe, and Asia for over 25 years. Twitter: @PaulAsel

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Paul Asel

Managing Partner @ngpcapital, a global VC with $1.6B AUM. Portfolio: Xiaomi, Deliveroo, Lime ... Writes about smart mobility, innovation & venture capital.