The following is a conversation between Daniel Lurie, Founder and CEO of Tipping Point Community, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.
Denver: For people in the world of philanthropy and social good – who may be looking for a successful model of a group that is tackling tough and seemingly intractable problems – they would be well-advised to turn their gaze out towards San Francisco and an organization called Tipping Point Community. And it’s a great pleasure to have with us this evening their founder and CEO, Daniel Lurie. Good evening, Daniel, and welcome to The Business of Giving!
Daniel: Thank you for having me. It’s an honor to be here.
Denver: You know, many people outside of the Bay Area may not be familiar with Tipping Point Community. Tell us about your mission and the work that you do.
Daniel: Well, we are coming up on 12 years into this work of tackling poverty here in the San Francisco Bay Area. We are focused on the 1.3 million people that are too poor to meet their basic needs. And what we think is the epicenter of the world, we think we’re pretty special and cool out here in the San Francisco Bay Area; I do think that as well, but we also have a lot of problems and a lot of poverty. We have all the resources at hand to tackle them, and so that’s our mission: to try to bring together all the best of the Bay Area to impact those that because of the place that they were born, or the zip code they were born into simply have not been given the same opportunity that, let’s say, I was born into… So that’s our mission.
Denver: Let me ask you quickly about the name of your organization. Was it in any way influenced by Malcolm Gladwell’s bestselling book?
Daniel: Absolutely. I was looking for a name back in early 2003 to 2004, and it kept coming back to his book and his concept that a few passionate people can create great change. Interestingly enough, he didn’t come up with the name himself, but he obviously made it famous. He and I have talked about it, and I think he likes that we took it from him.
Denver: Well, he certainly had to like what you’ve done with it. You know, I find the founding story of Tipping Point Community to be a really interesting one. Tell us, Daniel, what happened after you graduated from Duke that led you to start this organization back in 2005…
Daniel: Well, as you said, I graduated from Duke, and I had heard Bill Bradley. He was no longer Senator then, but he was thinking about running for President. He had come to Duke, and he was talking about the 12 million kids that were going to school hungry. He was talking about the 35 million people that were uninsured in the country at that time. He was a Rhodes Scholar, a Hall of Fame basketball player, an amazing human being. And he wanted to run for President and talk about issues of poverty. And that is not something that we’ve seen much of since or before, and I was inspired by him.
The day after I graduated, I ended up in his New Jersey West Orange offices, and I ended up – for nine months –working on his presidential campaign for the Democratic nomination versus Al Gore. And I was just incredibly inspired by his message. Obviously, it didn’t go the way we wanted it to go, but I took his message and moved to New York City. I did a couple of different jobs, and I ended up at the Robin Hood Foundation. I ended up there on September 7 of 2001. My fourth day of work was September 11, 2001. And I found myself a block away from the World Trade Center that morning at our offices. It was a really obviously traumatic experience for all of us. And especially to be right down there. But what I also was so incredibly moved at –and I feel so appreciative– that I was able to be at a place like Robin Hood that was helping lift up the hardest hit New Yorkers. And those were low-income New Yorkers who lost their jobs, lost loved ones, and really had a tough time recovering. And Robin Hood was there for them, and they were there for the city of New York.
And I got to spend two years there seeing what Paul Tudor Jones and David Saltzman and a few others had built into a world class organization that was tackling poverty in New York City. And they were doing it as a group of individuals, coming together as one community to tackle really difficult subjects. It always seems a little easier to me to go out and raise awareness and raise funds for a museum, or for a university, or for a medical institution. But when you’re talking about a child who is going to a failing school or does not have a home to go to, Robin Hood built something that made it cool and hip to give back to those types of issues. I wanted that for the San Francisco Bay Area. I wanted that for my hometown. So almost immediately, I started thinking: How can I bring this type of model to the Bay Area? And so in 2003, I moved home. Went to the Public Policy School at Berkeley, got a Master’s degree and launched Tipping Point in 2005 with three other founders: Ronnie Lott, Chris James and Katie Schwab Page; the four of us founded it. We got started in 2005, and we’ve been going for 12 years now.
Denver: Sounds great. I’ll tell you, you could not have learned how to run an organization in any better place than the Robin Hood Foundation. They are truly phenomenal, always have been, and remain that way. And one of the guys you just mentioned there, I know, is one of your childhood heroes, Ronnie Lott. Tell us about him and how that all came to pass.
Daniel: Well, I know you may not be a fan of his football playing days. You told me you’re a Dallas fan.
Denver: Just the opposite, as a matter of fact.
Daniel: Yeah, well, you don’t want to get on the wrong side of Ronnie. Even to this day, he’s still intimidating.
Daniel: But I was in graduate school and I was actually… Latham and Watkins, a great law firm, was helping incorporate, doing all of our incorporation documents. Ronnie got wind of what I was up to through his lawyer, and my lawyer said, “Ronnie Lott wants to have lunch with you.” And I said, “Oh my goodness. I want to have lunch with Ronnie Lott.” So I was in the middle of finals in my first semester in my second year at grad school, and I ended up being set up on a lunch with him. He walked into this restaurant… It took him about 15 minutes to sit down, as everybody wanted his autograph or their picture taken with him…
Denver: I bet!
Daniel: And it was jaw dropping for me because he’s my childhood hero, as you said. And he sits down, and we started talking. He knew about Robin Hood, and he was on board to help start it before we even got our food. He’s been there since before Day 1. He inspired me to make sure that I followed through on the commitment of starting this organization. And you do not want to let Ronnie Lott down! So he’s been a great supporter, founder and friend ever since.
…we simply believe that if a child is going to a great school, and if it’s one of the schools that we’re funding, we think that those are incredibly effective schools. But if a kid goes home and they don’t have a roof over their head… They’re living in a car with their parents… or they’re couchsurfing… or their parent doesn’t have a living wage job… or the family doesn’t have access to healthcare, or high quality healthcare, they are going to struggle in that school.
Denver: Well, it’s always nice to have a little star power in addition to his commitment right from the outset. You mentioned, Daniel, that there are about 1.3 million people in the Bay Area who are having a tough time making ends meet for the basic necessities of life. And you’ve become the leading poverty fighting organization out there, and you do this by focusing on four key program area. Say a word about each of them if you would.
Daniel: We do not believe there is a silver bullet when you’re tackling poverty. I don’t think anybody does, but you have to go at it from multiple angles. So we have four areas as you mentioned: education, housing, employment and health are our four areas. Now, if you force me to pick one, you know, we would always go: education. It definitely has proven to break the cycle of poverty. About 45% of our funding goes to our education portfolio, but we simply believe that if a child is going to a great school, and if it’s one of the schools that we’re funding, we think that those are incredibly effective schools. But if a kid goes home and they don’t have a roof over their head… They’re living in a car with their parents… or they’re couchsurfing… or their parent doesn’t have a living wage job…. or the family doesn’t have access to healthcare, or high quality healthcare, they are going to struggle in that school. So we believe we need to go at it in all four areas.
We’ve always been focused on direct service of 43 groups currently that we’re funding in those four areas. And over the last year, I will say that we really made a decision to also add going upstream… and that means tackling policy elements. And so I’m sure we can talk more about that, but those are the four areas that we’re focused on.
Denver: And I think if I were to come out to San Francisco for a visit, the thing that might strike me would be the level of homelessness, correct?
Daniel: You would be correct. It is a crisis here in San Francisco and throughout the region as it is I think in many major cities across this country. But it is especially acute in San Francisco, in Oakland, and in San Jose. We have struggled with it now for almost 30-35 years in San Francisco, and it has not gotten better. In fact, we think it’s getting worse, and we need to tackle it as a full community–one that includes the private sector, nonprofit sector and obviously government because government is actually the only place that can solve this problem. They’re the only ones that have the dollars to do so.
Denver: And it can be very difficult for people to really experience and have the full sensation of what it must be like to live below the poverty line. But you have cleverly devised, let’s say, a thought experiment that tries to convey that feeling. Tell us about that thought experiment.
Daniel: Well, if we’re talking about poverty line crisis, we did an ad campaign… Marisa Giller, on our team, led this with Goodby Silverstein, a world-renowned ad agency. We had people shopping at a local grocery store, and we set the price of groceries at what it would feel like for a person living below the poverty line to actually pay for those groceries.
So someone would walk in and buy a loaf of bread. Instead of it being $4 or $5, it was $25. A gallon of milk was no longer $6; it was $37. We wanted people to get the feeling and understand what it was like for someone living below the poverty line to pay for their groceries. And it’s just something that clicked with people. Hundreds of thousands of people watched this online. It went viral out here. And it was just something that we wanted people to stop and take a moment out of their day to realize just how high the cost of living is. Not only for themselves– because it’s a high cost of living for everyone out here– but also for those living in poverty here in the Bay Area.
Denver: Well, the look on people’s faces when they went to checkout to pay was truly remarkable. It was incredible!
Daniel: Yeah, if people want to check it out, tippingpoint.org/povertylineprices. It was a fascinating thought experiment, as you said.
Denver: Yes, it was really very good. While your operating model – your financial model – is really quite different from most other philanthropic organizations, tell us how it works and why you have set it up that way.
Daniel: Well, the thing that stands out for most people is that we act in many ways like a foundation, but we have no endowment. Every year, we start at zero– which is definitely different. It keeps us hungry. Last year, we raised $21.9 million. That is our grantmaking budget in this current fiscal year.
We simply believe that there are plenty of endowed foundations here, whether they be a family foundation or community foundations. We have numerous community foundations. Many, many great ones out here, and we just didn’t think we needed another one. We believe – and I learned this back in New York – we believe that issues of poverty? It is raining; it is pouring outside right now. We’re not saving up for a rainy day because it’s actually raining right now. So we want to get our donors’ dollars out the door as quickly as possible. We think that they know how to better invest their dollars than we do. So if they give us $100, or they give us a $1 million, we’re going to put those dollars to work right away.
The other thing that makes us different is that we provide general operating support to the nonprofits that we partner with. Only about 20% of foundations nationwide give general operating support, and we simply believe that goes to building trust with our organizations. Just like in the investment world, when someone invests in a startup or a company that has great leadership… or you believe in great leadership, you don’t tell that CEO “I want you to spend my dollar this way or that way.” You believe in the leadership team; you believe in the mission of the organization, and you let them go. We think the same thing should be applied in the philanthropic sector as well.
Denver: Absolutely! It would be like sending a FedEx package and telling FedEx when you pay for it that you don’t want any of the cost to go to the gasoline for the trucks. It makes no sense.
Daniel: That’s exactly right! That’s a great analogy. And it is one that unfortunately is displayed by donors often in our sector. That is definitely something that we would like to see go away.
Denver: And speaking of donors, thanks to the way your board steps up, you can assure those donors that every penny will go towards these programs. Would that be right?
Daniel: Yes. That’s exactly right. Thank you for pressing me on that. Our board covers all of our overhead expenses– so the staff salaries, our office space, keeping our lifestyle, our events– are covered by our board of directors. So when the $21.9 million comes in, all of it goes out the door, and there’s no overhead for Tipping Point’s work being paid by our donors.
Denver: That’s splendid. Well, you are a pivotal figure in the Bay Area and San Francisco, Daniel. You were the Chair of the Host Committee for Super Bowl 50 a couple of years ago and helped raise an extraordinary amount of money for the nonprofits in the Bay Area — I think more than any other Super Bowl host committee has ever done. And as you have spoken to the income disparities that exist there, or perhaps are even more pronounced than in many other places… just because of the extraordinary wealth that is being generated by the high-tech industries. So with that real and extensive understanding of the community, share with us what that community is like – how the issues are raised, how things get done, the key dynamics of the city and the region that you really need to understand in order to be successful.
Daniel: Well, the first thing you have to understand is that we’re a city that is going through a gold rush, and we have some experience with that out here. It is not new for this region to experience a boom and incredible amounts of wealth being created in short periods of time. What is different is that this wealth is being created at younger ages than we’ve ever seen before in our nation’s history.
We have an incredibly dynamic business sector, obviously led by tech, but there’s also biotech and a number of other industries. Our tourism business is also through the roof these days. It is a vibrant, vibrant region that is learning that it needs to start working together because of the cost of housing, because of incredible business that’s being created.
Jobs are scarce. We have a 2.9% unemployment rate here in the city of San Francisco. By all measures from the outside looking in, you could say every mayor would want any issues associated with those numbers that I just said; they would want those. But like you mentioned before, we have an incredible homeless problem. We have incredible poverty. We have seen people priced out of their homes left and right. People are fleeing San Francisco, and they’re not even able to go live in Oakland anymore. They have an hour-, two-hour-, three-hour-commutes into work. There is a thinning out of our middle class, and we obviously have incredible wealth being created. And we have low-wage workers living, 8-10 people to a one-, maybe a two-bedroom apartment in the Mission District.
So we have so many amazing things happening at the same time. We have people being priced out, forced out, and not able to support their family any longer living here in the city of St. Francis. And so it’s confusing actually to be out here right now because you would think that we could take care of our own, and we are not doing so. But having said that, I’m also incredibly optimistic about where these young companies are headed. Their employees are asking and demanding that their companies be part of the solution. We see companies like Google and Facebook and Apple really stepping up and stepping into the role of leading businesses that aren’t just about profit, but are about doing right by their community.
And so it’s a fascinating time out here. We have a lot of improvement that needs to happen. But I also believe that just as the technology that’s being created out here is spreading throughout the globe, I do believe that the business leadership and the political leadership is poised to improve on the situation that we have here.
One last thing. I do think that the issues that we’re facing here are happening throughout this country. We have lack of affordable housing, and we also have a huge transportation problem. Traffic is terrible as well. So we have our challenges, but we have the potential to fix those challenges with the resources that we have at our disposal.
From a very early age, my siblings and I were taught that we had to be part of the solution, that our community was strong, but that there were people that were being left behind. I always say giving and having that kind of philanthropic ethos is a learned skill. I just happened to learn it at an extremely young age.
Denver: Well, California always seems to be on the leading edge of a lot of these issues, and they help inform the rest of the country when they tackle them. You know, philanthropy, giving back, and having a deep concern about the community is part of your DNA, Daniel. I know that was influenced in large part by, as you like to say, your four parents. Tell us about them and the influence that they have had on your current work.
Daniel: My parents got divorced when I was 2, and both my parents remarried pretty quickly, a couple of years later. I had a great stepfather, great stepmother, and the four of them always got along well. My dad was a rabbi growing up. My stepfather is part of the Levi Strauss family. From a very early age, my siblings and I were taught that we had to be part of the solution, that our community was strong, but that there were people that were being left behind. I always say giving and having that kind of philanthropic ethos is a learned skill. I just happened to learn it at an extremely young age.
I sat on the board of our family foundation when I was still in high school, and so it was impressed upon my siblings and myself at an early age. I also grew up around the Levi culture, which they call “Profit through Principles.” It’s a company that’s been part of this community for 168 years now. And so I saw parents pushing us to be part of the community. I saw a company that was committed to social good– and also doing good in a business way. And so there was just no escaping it for me. And so for me, it’s been built into my genes from an early period of my life.
Denver: All you’re doing now is a continuation of what you’ve been doing your entire life. Let me ask you about the corporate culture of TP Community– the kind of organization that you’ve tried to create to attract and retain the very best talent, empower and engage them… and maybe one or two specific things you’ve done to make it a really special and unique place to work.
Daniel: Well, I’m looking out on my office now. There are only two people that actually have their own offices, and that’s myself… although I do have a desk out on the floor, so we can all see each other at all times. It’s a really open office environment. We tried at one point to be a little tech-like, and we have bean bags on the floor, and we try to make it fun.
Listen, we are like all the tech companies out here, like all the businesses out there trying to compete for talent. We have a great staff that is absolutely mission-driven. You have to be mission-driven if you’re going to do this work because it’s really hard to face these issues of poverty day in and day out, and realize what our groups are going through when they’re serving their clients… seeing it on the streets every day. So we just have fun together. We work really hard.
We’re coming up on our benefit on May 4 where we have 1,300 people. Our team is going to be in here long days and long nights over the next few weeks. But they all do it with a smile, and they do it with the knowledge that they’re helping people actually change their lives each day. So that’s what keeps us going during the long days that our team puts in.
Never think that you can’t be involved and part of the solution. And whether or not you have $25 to give, and you think that no one wants it…well, they do. They want that $25 check, but they also want you to go and volunteer. They want you to think about joining the board of an organization. So if you’re a 25-year old or a 30-year old… and you’re listening… and you’re thinking, “Oh, I’m going to wait until later in life to get involved,” I would encourage you that the time is now to improve your community. And your community needs you.
Denver: That’s great! Let me close with this. You have given considerable thought to the words of Martin Luther King, which were “Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.” And it certainly seems those words today may resonate even more than they did when they were first uttered as people question whether fundamental change is necessary. It’s hard to imagine a whole system being changed, but are you seeing the early beginnings of it?
Daniel: Well, I don’t think we can continue down this path. I do not think that we can have five or six people holding all the power, not only in this region or in this country, but rather on the planet. and We are seeing a consolidation of wealth which we’ve never seen before. What I am hopeful about is that the leaders of these growing companies realize that they have an obligation to make sure that they’re lifting everyone up, and not just the few. And yes, when you are making incredible sums of money, and then you give just a little bit back, that’s not going to cut it. And that’s not enough for us at Tipping Point. We want people to give back… We want people to write checks… We want people to give money, but we want people to give time. We want people to understand that they have an obligation to their society and that you have to think about race and equity when you’re talking about that.
We have a broken criminal justice system that is incarcerating men of color at ever increasing rates, and it’s not sustainable. And so, thinking that you can write a check and get your quick fix is simply not going to cut it any longer. And I do believe that the business leaders that we’re seeing growing up care about these issues, and Tipping Point is going to be there to push them and to hopefully educate them. That is part of our mission as well.
Denver: I’m sure you will. Daniel Lurie, the Founder and CEO of Tipping Point Community. I want to thank you so much for being with us this evening. Tell us about your website and anything you think that visitors might find of particular interest.
Daniel: Thank you. It’s been great to be here. Go to tippingpoint.org. And all I would say is: Never think that you can’t be involved and part of the solution. And whether or not you have $25 to give, and you think that no one wants it… well, they do. They want that $25 check but they also want you to go and volunteer. They want you to think about joining the board of an organization. So if you’re a 25-year old or a 30-year old… and you’re listening… and you’re thinking, “Oh, I’m going to wait until later in life to get involved,” I would encourage you that the time is now to improve your community. And your community needs you. That’s how I would end it.
Denver: And it’s going to take all of us. Well, thanks again, Daniel. It was a real pleasure to have you on the program.
Daniel: Thank you for having me.
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at www.facebook.com/BusinessOfGiving/.