Special Edition: Great Philanthropists - Jim and Marilyn Simons

Welcome to another edition of “Around with Randall” your weekly podcast making your non-profit more effective for your community and here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett. It’s great to have you joining “Around with Randall” again of course I’m Randall and today we take a leap into the great philanthropist series and look at another, maybe not as well known philanthropist or couple, who have defined the way they look at giving their money away, and most importantly, the tactical. What are the things that we can learn from these type of individuals when we're out working with, speaking with, engaging with the philanthropists of our own community?

Today we want to talk about James, Jim, Simons and certainly his wife, Marilyn, as well although most of the commentary and most of the research is around Jim. Actually Marilyn runs their foundation. Interestingly enough, both of them Ph.Ds in science in particular Jim with mathematics. Born in Brookline, Mass. Interestingly at age 23 was able to complete his doctorate in mathematics from Cal Berkeley. 23 years old. That's quite a haul to get through all of that, and then went to work eventually, for the NSA and government think tanks being a code breaker and eventually with some disagreement with the going on goings-on internationally with Vietnam War was a public, very publicly an opponent of the war, was let go, and that led him to start a hedge fund company called Renaissance Technologies. What was interesting about Renaissance is is that it used mathematics and high-level computerization to do very quick trades and in that process almost like day trading or minute-to-minute trading, which we think of today. In the 1970s and 80s was almost unheard of, and over the course of time perfected that process and eventually was returning as much as 80 percent on their hedge fund investment funds for those that had money invested with him and that company. I would note, and this has actually been re-recorded this podcast because i had recorded this and literally the next day ironically just a few days ago there was an announcement that Mr. Simons and Renaissance Technologies in the hedge fund had come to a agreement with the IRS to settle a long-standing almost decade-long case regarding how profits would be taxed, whether it was ordinary income or long-term capital gains.  And in the end I felt like I needed to re-record this just to put in this marker because it would seem odd but they agreed to pay$7 Billion to the IRS to be having those profits be looked at as more ordinary income rather than capital gains. Just to note in this process, eventually Mr. Simons and his wife, Marilyn, decided to get out of the day-to-day running of the hedge fund and began to look at philanthropy.

With a net worth somewhere over 25 billion dollars they began their philanthropy in autism research and then looked at it from the perspective of something he loved as a second option ,which was science. One of his big investments early on was this idea of math for America, where he put $25 Million of his own money starting in New York City to invest directly into the teachers ,that he would add as much as $18,000 per year for a five-year period to science teachers, and in addition pay for them to get teaching and higher level educational opportunities for themselves in either how to teach or in the idea of science and math, and really it was an indictment of the public school system from his perspective that stem science technology engineering and mathematics wasn't being highlighted at the proper levels. The teachers were hard to find that they weren't being invested in, and it would put America behind the eight ball in terms of growth in scientists and mathematicians and ultimately discovery. This program continued to grow through the New York school system and eventually then began to branch out into San Diego, Los Angeles, Berkeley, California, into the Utah area, Boston, and the District of Columbia. He put additional resources behind it as well in addition he also then began to support in about 2012 or so the idea of stipends for administrators to be more supportive - $5,000 a year - and involved with the idea of teaching stem for the students in partnership with those teachers that he was funding. At least additional funding - that's important to note because it'll come up several times in the other things that he funded - when you think about Math for America in that the results aren't immediately known long-term the big results ,we'll come back to that in a second. As a part of this process he also then ventured into setting up a secondary foundation to really hone in on the idea of supporting research, pure research, research for research sake, so to speak, maybe not even having a defined goal other than pure discovery and in some ways that's exactly what he wrote about in his dissertation in 1961, and what he founded in his own thought process in terms of figuring out what's out there in the universe that needs discovery.

All of this has led to a couple of controversies. Number one, he set up a secondary fund or a secondary foundation offshore in Bermuda so that he could take advantage of tax issues, but through the foundation, meaning he wanted there to be more leverage or less tax implications less restrictions where he could invest his money. Number two, he's involved with his research. He and his wife both having doctorates, they're very honest to say in today's world she runs kind of the external view of their foundation, the outreach, and he's really running the science, and there's been some criticism, particularly from some high-level people who have said well he shouldn't be involved, he should just give his money and let others decide how to use it. And I’m not sure I agree with that. I’m a big believer in donor intent. This is a unique situation where the individual has the academic and career-long expertise in math and science. That allows him a unique perspective and it's his money, it's their money, and in the end isn't that most important? That we honor donor intent, that we support it and as long as it's being used for the right purpose, personally, I don't see the problem. Particularly since it's a private foundation, it’s his money to begin with.

 Over the years Marilyn and Jim Simons have come up with some what they call key principles, and I think this is where we begin to think about, what does this mean for us when we're working with donors? Because there are donors who think about philanthropy a little bit differently, probably not as prevalent, but we spend a lot of time, and I have on this podcast talking about return on investment and that you need to measure that with certain donors, or most donors or most projects, what is it someone's putting in and what will be get gotten out in terms of outcome. And I don't deviate from that very far but Mr. Simons and his wife have it have a different perspective and it's one worth noting because there are people like this. So what are his principles that he's articulated? He did so on his website for their 25th anniversary of their starting of the foundation. So let me give you the five and then I want to jump into a quote that he said and what this means for us. So the five principles that he works with when it comes to philanthropy is: don't do something or do something new, don't just run with the pack be different, look for the uniqueness in opportunities, and he talks about it from the perspective of if there are x number of people working on one problem and they're, I guess good people, smart people, go work on another problem because they're probably going to figure it out, do something that is unique. Two, surround yourself with the smartest people. I have a favorite podcast I listened to, Tony Kornheiser, and while he was a sports writer for many many years with the Washington Post and is now on ESPN, his podcast, sometimes has very little to do with sports. What I like, though, is he’s, whenever he's asked for advice he says, “go stand, find the smartest person, go stand next to him because things happen,” and there's a lot of truth in that. If you surround yourself with smart people, smarter than you are, more detail-oriented in the areas in which you know you're likely to learn something and you're also, from a leadership perspective, empowering others to make you better. So find the smart people and stand near them be near them. 

Third, be guided by beauty. He talks about mathematics, things like poetry, as having a a sense of beauty, that maybe somebody like me who doesn't have the mathematical or the analytical chops that certainly he does sees beauty in the discovery. And there's a lot of truth in that whether it's healthcare, education, when we support things and find people to support things that are looking for beauty, however you want to define that, there is a real pureness in the ability to make to the community or science or discovery or whatever much more worthwhile. Don't give up easily and this is going to come around here in a second. It may take time and he talks about worth. If it's worth it stick with it. And I think there's power in that. We've become a society of instant gratification. I want the results now, the technology, and the internet, and you know gaming, and all kinds of other things have produced a sense of instant gratification in many of us. I’m not excluded from that. Certain areas either, but sometimes it takes time to get the real value out of something. We should be aware of that. And finally I love his last - the fifth hope for some good luck. Sometimes the greatest discoveries are luck. I think about 3M and the discovery of the post-it note and the the glue that they use in post notes wasn't that, wasn't discovered for that purpose, discover they're trying to do something else and somebody goes hey look this stuff kind of sticks but it doesn't create permanent damage. Discovery can come in all kinds of ways and the ability and the willingness to be creative is something that sometimes we don't look at in a sense of pure investment, pure research, pure opportunity.

So this brings me to the true tactical. So, his five points were do something new, surround yourself with smart people, be guided by beauty, don't give up easily, and hope for luck, hope for good fortune. He and his wife are notoriously shy when it comes to the media. They did an interview several years ago that I found some of the quotes to be fascinating. They talked about the idea that re-investing in a little crazy is a good thing, so let me give you a couple of their quotes and then we'll jump right into the the final pieces of the tactical - what we can learn from this. The reason that they isolate their research is pure research, they distinguish it like the NIH does fantastic work, they're very clear, very important have governmental research, but it's translational research, meaning there's a purpose they are interested in, pure basic research. Let discovery take them where they will end up.

Quote: “We think about a big project that could take 10 years and to stick with our own research, researchers during that time. That's a harder thing for the government to do. Think about the Math for America that he invested in originally the immediate results of that. Well there may be better test scores and kids are going to college which are all fabulous things, but the true intent of the program was to create discovery down the road, and if you… it's hard to get most 12 year olds to discover very much but if you give them the infrastructure, the knowledge, the teaching, what happens is they grow and someday they may become that scientist that discovers the cure for cancer, or how to make solar power more efficient, or creating the electric car, or whatever it is that our future holds.”

The question that they asked was, “Are they afraid of wasting money with those little crazy projects?” And in the end the idea is the answer is no. He says, and I quote, “Whether it's a big payoff that will come but may not be predicted but it's not wasting money if they're good scientists, you're likely to learn something.” And I think this is something that in the world of instant gratification, in the world of of good stewardship, sometimes we lose sight of what is it that your organization's doing that may allow for earth-changing opportunities but is ill-defined in the journey and tough to monitor and and measure results until you get there. Who are the people in your community that could be okay with that? Who would invest much more money but know that the investment is going to be a long-term opportunity? Who are the people that look at the future and see a myriad of possibilities even if they're clouded in haze, and nobody really understands what they are today but that investment's going to allow an organization a non-profit to fill that gap. Who's willing to take risks? Who wants big change?

The tactical pieces from Dr. Simons, Jim and Marilyn Simons, it sometimes takes a long time to get truly big cultural change, investment, and that is something that we sometimes run contrary to in philanthropy because we're so inundated with “we need this today, it's going to produce this result.” And I’m not saying we should run from that, but I’m saying we should have both sides of the equation as part of our arsenal arrows in our quiver to meet the donors where they are so that they can support the organizations and the needs the way they want to, and chances are if you can find those people that investment's going to be even bigger. Transformationally then the idea of someone just supporting a specific project so you want both and sometimes we don't think about the Dr. Simons and Dr. Simon's thought process as changing the world.

Don't forget to check out the website lots of blogs posted there you can watch this podcast there lots of things to grab that's www.hallettphilanthropy.com. If you want to communicate with me send me an email at podcast howletphilanthropy.com or if you disagree with me my homage to Clark Howard reeks r-e-e-k-s at hallettphilanthropy.com.

Good lesson today to think about it a little bit differently and that's why I love doing the great philanthropist series - it's a little bit out of the teaching part or the education part of these podcasts but it does give us an outcome of something to consider and to think about a little bit and to recognize those that are making the biggest differences in our community. I thank you for joining me today it's always a pleasure to have you with me i look forward to seeing you next time and don't forget the old Gaelic saying some people make things happen some people watch things happen then there are those people who wondered what happened. The Simons are people who making things happen in the world of science and pure research and you're doing things in your community that are making things happen and you're working with people who want to make things happen and usually they're for all the people who are wondering what happened. We'll see you next time right here on “Around with Randall” and don't forget make it a great day.