The New Kids on the Board...Hedge Fund Philanthropists

A recent Wall Street Journal piece, titled "Hedge Funds Roil Charity Fundraising," describes how hedge fund managers on charity boards have shaken up the old guard with their encouragement of risk and debt, hosting of flashy galas, and emphasis on fundraising at what some see as at the expense of service. A charity's mission is always paramount, but the bottom line is that these unorthodox fundraising methods are drastically improving the bottom line for groups like Big Brothers Big Sisters. (Says Judith Vredenburgh, Big Brothers chief executive: "If we want to serve more kids, we've got to invest in fundraising, not only service." Under Vredenburgh's tenure, revenue has risen 61%.) A few weeks ago I spoke of how the hedge fund industry is missing a major mega-philanthropist. (Where's the Buffett?) It is pleasing that hedge fund managers have made their grand entrance into the charity world. It's a start. They may frighten people by using the same approach they use in their day jobs, but that approach has made them insanely rich. Short of unethical activities (and the hedge fund industry is notorious for such, so this is something to watch for), how could a charity complain?