I was golfing with a friend recently and he asked me how our “One More Year Fund” is doing.  It’s been a while since I gave an update so I thought I’d put together some thoughts on where we are at.

First, as background, I worked “One More Year” at MegaCorp compared with my original plans.  In that year, we set aside the money I made (salary & bonus, after tax) in order to start a charitable fund.  We felt blessed with all we had saved and thought it would give us something interesting to do as we kicked off this new chapter in our lives. 

Link: Work “One More Year” As A Gift to Charity

How are we doing on our project? So far, we have “spent” about 83% of the fund. I say “spent”, but as you will see, much of the money has been invested in ongoing projects that haven’t played out. Overall we have learned that it requires time and effort to be a philanthropist. Even a small one. Here’s the update …

DIRECT DONATIONS: First, we’ve outright donated about 30% of the total fund.  Some was increased giving at our metro Zoo, where I serve on the Board.  That giving coincided with my time as Chairman & on the Executive Committee, so that worked out well. 

Other giving went to our schools – high school, college, and graduate school alumni foundations.  For our undergraduate college’s business department, I had the opportunity to be their honorary ‘Executive’ on campus a few years ago. It was fun to speak with students about my career (although they mostly asked questions my early retirement!). 

Lastly, a meaningful share of our direct giving has gone to our church for various special capital campaigns over the last 10 years. They’ve done an exterior building renovation, bought new carpets, refreshed the parking lot, and even have a new pipe organ coming from Germany this Spring.

ANGEL INVESTMENTS: The biggest part of our giving – a little over 50% of the fund – has been invested in companies we thought were doing some “social good” in the world.  This is a new approach to giving beyond only funding 501c3 charitable organizations.

I got involved in an angel investment group at the University of MN and made 6 investments in small pre-commercial companies.  They were all doing work that roughly aligned with the United Nation’s Sustainable Development focus areas.  

Link: One More Year Fund – “Social Good” Start-Up Investing

So far, none of these angel investments have paid off in a big way.  The research on angel investing says that for every 10 investments you make, about half will go broke, 3-4 will break even, and 1-2 will pay out well enough to deliver a double-digit return for the overall portfolio. We haven’t yet had one that has hit the big time.

We had an investor update on one of these companies a couple weeks ago that I tuned in on Zoom from our place in Florida.  They are doing well with a new CEO.  I’ve been invested with them for about 9 years now and they are hopeful that if they hit their expansion targets, they will be an attractive 9-digit acquisition opportunity for a big strategic buyer in a 2-3 years.  

While that sounds great, that company hasn’t crossed the finish line, by any means. Still, three of our original investments are growing, vital, and have real payout potential like this one.  All three of them have reached positive cash flow, even as they still take on new investors to fuel faster growth. They are exciting to follow.

The other three companies we invested in are finished.  Two went broke and one only exists in terms of the intellectual property that the founder is hoping to sell. I wrote one investment off of my taxes a few years ago and will do another one with my 2025 returns.

We haven’t made any new angel investments in the last 5 years. In December of 2019, I had my heart attack and then the pandemic hit a few months later.  The angel group continued to meet over Zoom, but that wasn’t ideal. For me, it was too much work to do due diligence and decide where we wanted to invest extra money over the computer & phone.  

Link: Angel Investing Update – Taking A Break

At that same time, our son came home after finishing college and lived with us through the pandemic. At the point and our time became focused on him. He’s now gotten off to a great start in his career and at one point we bought a nearby townhouse for him to live in. Now that he is off to the big city and established in his career it’s probably time for us to start vetting some new giving opportunities.

REMAINING FUNDS: Beyond the money already donated and/or invested, we still have a little less than 20% of the original fund to do something with, but it still is a enough to do some real good.  

If you think it should all have been spent by now, that’s a fair criticism. It’s been 10 years, after all. Honestly, the situation is that at least for us, there is actually a fair amount of time & focus needed to give away money to what you hope will be worthwhile causes. 

We’ve wanted to get (somewhat) involved in the organizations that we fund – whether a charitable organization or business start-up. There are many organizations that are happy to collect your money and send you a thank you note, but if we are going to give a substantial amount of money (for us) to a group, I want to understand who they are and what they are focused on.  

I don’t need or expect a decision-making seat at the table, but just want to make sure that we are informed and can fully support what they are doing and their strategic priorities.  (After all, we could just give the money to our 28-year-old son to help him instead).

As a counterpoint, over the last few years I’ve read a number of articles about MacKenzie Scott, who has donated $20 billion of her Amazon fortune to over 1,200 organizations with a “no strings attached” approach.  She just sends the money from her foundation with the minimum of restrictions or oversight on the money. 

Her ‘Yield Giving’ Fund just expects them to spend the donated money on what the organization knows will work best for them.  Her top donations go to well-known, well-established organizations like Habitat for Humanity, Planned Parenthood, the Boys & Girls Club, and the United Negro College Fund.  Perhaps we’re being too self-important with our relatively small donations?

Regardless, our snowbirding time in Florida has started to open up some new opportunities for us to be involved in.  My wife has joined the local Women’s Club and a guy from the Community Foundation reached out to me over breakfast about getting involved in some of their campaigns.  I think if we start spending more time in Florida, we’ll get more seriously involved. We have already donated some small amounts to their projects.

How involved do you like to be in organizations that you significantly give to?

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