Oxstones Investment Club™The founders of the Resolution Project don’t dwell on generosity or charity when they describe why their nonprofit mentors and funds young leaders. They favor the language of finance.
“We get good yield,” said Andrew Harris, the group’s 31-year-old vice chairman, who advises private-equity firms at Forum Capital Partners in New York. “We think it’s very different and, to use a Wall Street term, very differentiated.”
Without deserting careers, a new wave of young bankers is starting nonprofits to help orphans, immigrants, veterans and students. They say they’re moved to mend the world using capitalism’s wisdom, not because of its shortcomings, preaching the power of dividends, due diligence, leverage and efficient allocation of resources. Some see themselves setting a new mold for post-crisis Wall Street philanthropy by not waiting to give away their money or leaving for full-time charity work.
“Among this generation — our generation — is a deep passion and interest in learning, earning and returning simultaneously,” said Andrew Klaber, 32, an analyst at hedge fund Paulson & Co. whose nonprofit Even Ground provides education and care to African children affected by AIDS. “You just see an unmet need in your research, and research is what we do on Wall Street.”
‘Made It’
Even Ground, which has given out more than $800,000 according to Internal Revenue Service filings, received early funding from Goldman Sachs Group Inc. Three founders of Ascend Educational Fund, which throws its inaugural gala in New York’s Prince George Ballroom Feb. 8, have worked at that bank.
“Our target audience is a very under-covered market,” said Adrienne Serrato, 27, an Ascend co-founder who now works for Houston-based investment firm WindAcre Partnership. Her group, which grants scholarships regardless of immigration status, awarded $32,000 in 2013, its first full year.
Another Ascend co-founder, Julissa Arce, develops derivatives for Merrill Lynch clients at Bank of America Corp.
“The first time I felt like I made it wasn’t when I made director,” said Arce, 30, a University of Texas graduate. “I felt like I made it when I launched this fund.”
Lessons from capital markets aren’t the only inspirations. Others described being shaken by the 2008 financial crisis, even if they don’t see bankers as villains.
System Meltdowns
“There’s been a cultural humility that’s come out of the financial crisis,” said Tim Kleiman, 30, an analyst for New York-based asset manager Golub Capital. He’s working on a project to fund higher education in Africa that may aim for profit. “When you’re confronted with these really humbling events, where you see the meltdown of these systems and the sad human costs of that — that were not necessarily the result of anyone’s intention — for me it galvanized my thinking.”
Kleiman, a Yale University graduate who worked for McKinsey & Co. and hedge fund D.E. Shaw & Co. before Golub, said he doesn’t want to wait for his career to hit its high point before undertaking meaningful projects.
“That world that I’m imagining, where I’m a partner and I’ve made all my money, who knows what that world’s going to look like?” he said. “So why not try something now?”
Several founders, including some of the young bankers, warned that the work demands more than passion and pluck. Nancy Lublin, who started Dress for Success, which gives unemployed women suits for job interviews, said she cautions aspiring philanthropists even while admiring their intensity.
‘Root Canal’
“I’ve never run a hedge fund, and they’ve never run a not-for-profit,” said Lublin, 42, now chief executive officer of Do Something, an organization that runs national campaigns about bullying, the environment and other causes to engage teenagers. “I brush my teeth every day, twice a day, that doesn’t mean I’m ready to perform a root canal on somebody.”
Some Wall Street nonprofit founders described hitting logistical and financial snags trickier than expected.
Kelly Peeler, a co-founder of Business Across Borders, said she had a hard time planning entrepreneur competitions in Iraq while working as a JPMorgan Chase & Co. analyst in New York.
“It’s a lot to juggle,” said Peeler, 26, who left the biggest U.S. bank last year to be a Ewing Marion Kauffman Foundation global scholar.
Ahmad Zubair Sahar Mahjoor, 37, struggled to raise funds for his Afghan Education Peace Foundation, which aimed to bring students from Afghanistan to the U.S. for schooling. The partner at Latin Markets, a New York firm that organizes forums for investors, said he’s winding down the group after six years.
“You can’t lead a cavalry charge if you think you’ll look funny on a horse,” Sahar Mahjoor said.
Marathon Man
Others are undaunted. New York Needs You, which mentors students who are the first in their families to attend college, raised almost $1.4 million at a Jan. 23 gala, according to a press release. Robert Reffkin, a former chief of staff to Goldman Sachs President Gary Cohn, started the group in 2009 while working at the New York-based firm. The fundraiser honored Adebayo Ogunlesi, a member of the bank’s board.
“There is a subculture of young Wall Street people starting nonprofits,” said Reffkin, who left the bank to co-found Urban Compass, a real estate startup that says it’s using technology to improve housing searches for New Yorkers.
The firm and the nonprofit aren’t his only creations. The 34-year-old Columbia University graduate helped start a Success Academy charter school in the Bronx, began a Lazard Freres & Co. minority internship program and ran 50 marathons in 50 states over six years, ending in New York in November.
‘Let’s Go’
Reffkin, raised by a single mother, was one of the founders who described being driven by life experience and personality.
“I’m a starter of things,” said Oliver Libby, another co-founder of the Resolution Project, which will hold competitions for student social ventures at the United Nations Youth Assembly this month and the Clinton Global Initiative University in Phoenix in March. “I just have fun with it. So there’s a certain aspect of me that just is like, yeah, sure, let’s get that started, let’s go.”
Libby, 32, a managing director at New York-based advisory firm Hatzimemos Partners LLC, started a Harvard University a cappella group and was included in a Harvard Crimson story about students who wanted to be president of the U.S. Another Resolution co-founder, Howard Levine, is a colleague of Arce’s at Bank of America, where he works on a special-situations team.
“You can have your cake and eat it too — there doesn’t need to be a tension between Wall Street and nonprofit,” said Harris, who went to high school in Westchester with Levine. “And we’re proving that.”
Scalability, Mitigation
The language of banking shapes their group, with Resolution judging pitches on market demand, scalability, risk mitigation and returns. Winners get as much as $3,000 of seed funding and mentoring from volunteers who work at firms including New York-based Morgan Stanley and JPMorgan.
Resolution “is an allocator,” Libby said. “In a sense, we’re angel investors.”
There are limits to what the vocabulary and methodology of banking can do for nonprofits, according to Andrew Hahn, who directs the Sillerman Center for the Advancement of Philanthropy at Brandeis University.
“Often it works out, and I call that a magical outcome, but sometimes it doesn’t,” Hahn said, adding that metrics Wall Street relies on for risk management can be harder to find in philanthropy. “Sometimes the Wall Street people bring their culture into the nonprofit arena and expect too much.”
‘Doing Good’
Most of the young Wall Street philanthropists promote their efforts on the resumes they post online. Some share abundant details. The LinkedIn page for Alliance for Veteran Support co-founder Omar Itum, 29, a Johns Hopkins University graduate, describes the group’s press coverage, partnerships, contacts and goals, detailing a fundraiser that was “one of the largest charity events in the financial-services industry.”
It includes little about his job as head trader for Charter Bridge Capital Management LP, an investment manager.
Joseph Weilgus, 36, who started Project Sunshine in 1998 to entertain hospitalized children, doesn’t question the motives that drive Wall Street’s new philanthropists.
“At the end of the day, if they’re doing good, that’s great,” said Weilgus, the CEO of investment adviser New Legacy Group LLC. “You don’t have to question people’s intentions if they’re doing good.”
The current wave of bankers starting nonprofits isn’t the first to wash over Wall Street. Even young founders who described trying to create a new model of banker philanthropy paused to offer praise for predecessors.
Klaber, whose group Even Ground was previously known as Orphans Against AIDS, applauded the generosity of John Paulson, his New York-based hedge fund’s billionaire owner, and cited former Goldman Sachs heads John Whitehead, Robert Rubin and Hank Paulson as “tri-sector athletes” who’ve thrived in business, charity and politics.
“Perfection is the aspiration,” Klaber said. “I just try to do the best that I can.”
Tags: banker philanthropy, banker turned social entrepreneurs, doing good, finance giving back to the community, helping to make the world a better place, new generation of philanthropists, philanthropy, social entrepreneurs, social finance