Donation of one million euros inspired by effective altruism movement

Three years ago, Steven Le Poole started as Finance Director at Lagerwey, a wind turbine design and production company. Inspired by the effective altruism movement, he had been mulling over an idea to contribute to preventing child mortality for a while. When a big investor came along, the idea became a reality. He negotiated a substantial donation as part of the sale of the company: one million euros.


Where did this idea originate?
In the summer of 2016, Huib Morelisse, then CEO of Lagerwey, and I were in a meeting with an important investor who was interested in investing in Lagerwey. But he was worried that we wouldn’t stay at our post to ensure a smooth management of the company until a future sale. Looking for the proverbial golden handcuffs, he supported our idea to donate part of the profits (of a sale) to two specific charities. Huib’s wife has Parkinson’s Disease, and his plan was to set up a foundation for that cause. After losing my eight-month-old son in 2003, I started Max Foundation with Joke, my wife. I haven’t played an active role in it for years, but I was still looking to use my current position to do something positive.

How unique is this structure to share corporate profits with a charity?
Personally I haven’t come across it before. But there is a hedge fund in London, The Children’s Investment Fund, which helped shape the idea for me. The founder, Chris Hohn established this foundation with the explicit goal of offering children a better life; two percent of all proceeds go to this cause. That idea stuck with me, I found it fascinating.

Chris Hohn’s approach inspired you. What else did?
When I left Max Foundation I kept thinking of other ways to make a meaningful and effective contribution. I read a book by Peter Singer, a well-known philosopher on the ethics of effective altruism (read a book review here). Singer advocates for a rational  and smart approach in charitable giving. He states, for example, that if you want to have a positive influence on the world you can work for a charity, but you can also simply keep doing what you do well, and donate a percentage of your salary. This is part of the ideology of effective altruism and appealed to our investor too. Because it’s a business-minded approach: how can you use your capacity and capital to reach maximum ROI?

Did this 'future donation' influence the process of negotiating?
It did for me. Oh, I’ve just thought of something else that inspired me. A few years ago I watched a TED talk about the way people negotiate. As negotiators, men are known to fight harder for themselves. Women hold back more. Except when it concerns their loved ones, like their children. That triggers a strength whcih men are less familier with. It’s a interesting way to look at it, isn’t it? Because in this case, I could relate to that. At one point we were in a meeting which was moving very slowly. There were a number of setbacks piling up. Normally I stay calm in situations like that. But on this occasion, the donation to Max Foundation was in jeopardy and I lost my cool. I slammed my laptop shut and stormed out of the room.As this was so out of character for me, it made a big impression on the others. The following morning, the issue was resolved.

At the beginning of 2017, negotiations started to sell Lagerwey to Enercon, an international market leader in direct drive wind turbines. This exit trajectory lasted roughly a year, and the sale went through at the end of last year. The investors did very well on this deal. But in the light of Dijsselbloem’s recent criticism on high bonuses, this might well be another way to keep people motivated. It certainly had that effect on Huib and me. When times were tough, we stayed put. And when things went well, we fought even harder. Normally speaking, that’s what bonuses do. Obviously in our case we were personally involved in the cause. But young people nowadays are far more concerned with a company’s social responsibilities. Wouldn’t it be fantastic if this became mainstream?

Could we perhaps call it the New Bonus?
Yes, why not!

There’s so much money involved in these sales transactions. Surely a few percent to a good cause is barely noticeable. Why doesn’t everyone do it?
Running a corporation is hard work. It takes a while for all the pieces of the puzzle to fall into place. You can’t assume that you will be successfull. Most people in the corporate world therefore don’t understand why you would unnecessarily' give away' money beforehand. You need to be quite confident to suggest this to the person managing the corporate deal. This cause is close to my heart, that’s why I’m fighting so hard for it. I was thrilled that our investor was open to it too and approved of this set-up, and specifically of our causes.

Many donors prefer to stay anonymous. Why are you keen to share your story?
Obviously I want a good life for my whole family. And yet I get more satisfaction from the million euros I’m giving away than I do from my own share. I hope I can inspire people to do the same, in their own way. I feel it can really raise difficult business deals to a higher level. If it were up to me, this form of effective altruism will become the norm. Or as you say, the New Bonus.

If you have any questions or suggestions, please contact our communication manager Bram Pauwels bram@maxfoundation.nl

*More information about effective altruism can be found on this website

 

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