Andreessen Horowitz is announcing that the firm’s six general partners will donate at least half of all income from their venture capital careers to philanthropic causes. That’s at least half of everything they make from venture capital — for life. It includes all fees, carry, salaries – everything. The lucky recipient charities will be at the discretion of each partner.
The firm is also announcing an initial $1 million gift to six charities including Via Services, Ecumenical Hunger Program, Second Harvest Food Bank, Fresh Lifelines for Youth, Canopy, and The Shelter Network. Each of these charities is focused on helping the less fortunate in the firm’s backyard of the Bay Area.
“When you live in Silicon Valley you realize how talented everyone is,” Ben Horowitz says. “Some people get a lot of money and others have jobs that pay less. We appreciate the community very much. We figured since a carry is taxed as capital gains and not income, we’d just correct that ourselves.”
Although major VCs like John Doerr and Mike Moritz have signed the Giving Pledge, this is the first time I’m aware of that a venture firm or private equity firm has made this kind of pledge firm-wide.
As you can imagine, there were many months of debate about it. “The points back and forth were about, ‘Gee, what if Andreessen Horowitz doesn’t do that well, and that doesn’t turn out to be that much money?’ Then giving half away would, you know, suck,” Horowitz says. “But as we discussed it we realized that even more of a mediocre outcome for us would still be an awful lot of money.”
Added Marc Andreessen: “We had the debate of do we really want to be the firm where people have multiple vineyards and private jets or the firm that makes a contribution.”
This thinking was greatly influenced by Andreessen’s wife Laura Arrillaga-Andreessen, who teaches philanthropy at Stanford and recently penned a book on giving called “Giving 2.0.”
“We discuss this stuff at breakfast,” Andreessen says.
It’s a different approach from the Warren Buffet belief that he should maximize funds in his life and then give it away to charity at the end, and one shared by Facebook cofounders Mark Zuckerberg and Dustin Moskovitz, who’ve both already been active givers.
There are a lot of Andreessen Horowitz haters these days, and I asked whether they were worried that there’d be a cynical backlash against this sort of a statement. “Oh there will be,” Horowitz says. “But we’re really hoping, like everything else we’ve done, we get copied.”
[Disclosure: Marc Andreessen is an investor in PandoDaily]