Letter #184: Ian McKinnon and Walter Stern (2022)
Letter #184: Ian McKinnon and Walter Stern (2022)
Founder of Sandia Holdings & Managing Partner at ZBI and President of Modrall Sperling | Keynote Conversation for Notable New Mexicans in Philanthropy
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Today’s letter is the transcript of a conversation between Ian McKinnon and Walter Stern. In this conversation, Ian shares his story and introduces himself, discusses philanthropy, family influences, and investment success, his focuses on education and healthcare, his thoughts on trust-based giving, philanthropy and giving culture, family philanthropy and passing on giving values to future generations, board composition and governance, impact investing, and much more! This was a particularly interesting conversation because while this conversation is not about investing, Ian does not speak publicly often, and we can get a sense of what he cares about and how he approaches and analyzes the world through this conversation—both of which we can draw life and investing lessons from.
Ian McKinnon is the Founding Partner of Sandia Holdings and a founding partner of TEAM8, the sports management company that spearheaded the creation of the Laver Cup, and a Trustee and the Vice Chair of the Board of the Santa Fe Institute. Prior to founding Sandia, Ian spent ~20 years at Ziff Brothers Investments (ZBI) where he retired as a Managing Partner. He started his career with stints in banking and consulting at Merrill and Bain.
Walter Stern is the President of Modrall Sperling, an Albuquerque-based law firm specializing in Litigation, Transactions, and Natural Resources Law. His practice in specific focuses on natural resources, energy, and environmental law. Walter joined the firm right after law school in 1982 and has been there for 42 years now.
I hope you enjoy this conversation as much as I do!
[Transcript and any errors are mine.]
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Transcript
Walter Stern: Welcome, and thank you for joining this--I was gonna say fireside chat, but I'm not seeing a fire, but, so--chat with Ian McKinnon, who along with his wife, Sonnet McKinnon, have been identified as notable New Mexicans in philanthropy by the Albuquerque Community Foundation. So congratulations for that designation, Ian. And Ian, thank you so much for joining us this evening. We know you have a busy schedule, and we're grateful for you to be here, ready to share some thoughts with us this evening. Next, I'd like to briefly thank the Community Foundation and its staff for facilitating this discussion here this evening. I think it's important as part of the Community Foundation's mission to build and broaden a culture of philanthropy in our community. And these conversations can do nothing but help raise our consciousness collectively about the importance of philanthropy and the power of philanthropy and the things that it can do for our community, both here in Albuquerque and across the state. Finally, I'd like to thank Julianne and the Academy for facilitating this and hosting this, and I think it's appropriate that we are in Simms auditorium for two reasons. First, this auditorium is named for Albert Gallatin Simms the second, who also qualifies, in my judgment, as a notable New Mexican in philanthropy along with his wife, Barbara, and their daughter, Maggie, who actually hosts a circle of giving in the Community Foundation. And I particularly like the fact that we're here because I think Ian is very comfortable in Simms auditorium. And hopefully, he will be prepared to share with us his innermost thoughts about philanthropy, so, no pressure, Ian. For the audience, please know that we don't want this to be a one on one conversation. We would like to invite you to participate in the conversation. And after I finish some of the questions that I have for Ian, I'd like to open the floor to questions from the audience, including to those people who are online. We have microphones up here, as you can see, close to the stage. And we will be monitoring the chat room online to see if there are questions that come in from from those who are participating online. So be thinking about those pithy questions. I may be asking softball questions of Ian, and so if you have some tough ones, be prepared.
Ian McKinnon: Thanks, Walter. By the way, I should note that I don't know what he's going to ask me. Walter wrote me, and he said, Would you like to see some of the questions? I said no. Because no one wants to hear canned responses to a variety of questions. So he may ask me some tough ones and I'll have to deal with them. But I have no idea what he's about to ask.
Walter Stern: We'll take it step by step. So I should introduce myself. I'm Walter Stern. I'm a lawyer at the Modrall Sperling firm here in Albuquerque. I am the father of three children, all of whom graduated from the Academy. And I have had, as Julianne mentioned, the privilege of serving on the Board of Trustees here at the Academy. And I've also had the privilege of serving on the board at the Albuquerque Community Foundation. But enough about me. What I'd like to do, Ian, with your permission, is to provide a very brief biographical sketch of some of the sort of essential details of your background, but then allow you to provide some color to your background that might help the audience understand your perspectives as it relates to your philanthropic endeavors over your lifetime. So, Ian is a graduate of the Albuquerque Academy, Class of 1985, and then went on to Occidental College, graduated in 1989. He is a graduate of a business school back in Cambridge, Massachusetts. Some of you may have heard of it. I forget the name of it, but--and then after that, he had a very successful career in investment banking, working at Merrill, at Bain, and for much of his career, at Ziff Brothers Investments or ZBI. And his career in investment banking culminated as the managing partner of ZBI for many years before establishing his new endeavor, Sandia Holdings, which is your current endeavor. Over the years, you've served on many boards of trustees and investment committees, including at the Academy, at Occidental College, at Moran Academy in California. And with that, I will let you fill in and provide a little bit more color, Ian.
Ian McKinnon: Okay, thanks, Walter. Well, first off, what a great turnout. Thanks for everyone for coming. I didn't get a list of who was coming, and I wasn't certain how many people would be here, and I'm really touched and humbled that this many people came out on a Wednesday night to talk about philanthropy. So maybe I can just fill in a few pieces of this. You ever notice when you look at somebody's biography, and you hear about them--I was saying this earlier in the reception, the biography almost definitionally looks as if it's very orchestrated and planned. And this path I took from Occidental to Wall Street to Harvard Business School to a hedge fund seems like that was the way it was--I had planned that. I didn't at all. Please know that not in the slightest--in fact, many people here knew my father quite well, who was--haha, I would clap for my dad too--and the reason I bring him up is, my dad was a lawyer for many years, and then became a justice on the Supreme Court in Santa Fe. And my dad really wanted me to be a lawyer. And it was this assumption that went into everything that he talked to me about, and indeed, I could say my dad never threw a ball with me but he took me to the library when I was eight. And for those lawyers in the room, I learned shepardize a brief when I was nine. What nine year old does that? It's crazy. But that was the environment in which I grew up. And we also grew up in a way, my dad was often paid in green chili and chickens, often not money. And it was a real sacrifice for my parents to send me here. It was tough. And I heard them quarreling on a few occasions about how hard it was for them to pay for me to go here. And by the way, for those--you think your kids don't hear those things, the kids hear everything. And I remember thinking then, no matter what, I'm going to do whatever I can to make sure that there's financial aid for people, that people can go places they want to go no matter what. So it started then. And I mean, I was really afraid I'd have to drop out a couple of times, it got to be that close. And I'm very grateful that I didn't have to. And as I sort of progressed through my career, I really found all kinds of opportunities to start doing these [inaudible]. So I was a Big Brother in Los Angeles--I don't know how many of you know the Big Brothers Big Sisters program. And I had no time to do that. The life of a junior investment banker is just awful. There's no other way to put it. Like a good week for me was 80 hours. And the norm was more like 85-90. But I had a little time Sunday afternoons, and that's when I took my little brother out. And we did things together. And I remember thinking, This seems like a sacrifice for me, but I'm getting more out of it than he is, I think. And that's one of the things I think is true about philanthropy that I think--too often we think of philanthropy as being associated with money--and that's important, but it's also time, it's also talents, it's efforts. And once you start, it gets really addictive. And that's one of the messages I hope I can bring across tonight, which is that, Please, whatever cause matters to you, whatever really drives you, once you begin to volunteer, once you begin to get involved, and you see lives being changed, there's nothing better. And my wife Sonnet and I--Sonnet came here in eighth grade. And that was the first year they allowed girls in with the boys in eighth grade. So you can imagine what that was like for her. So she decided, You know what, maybe it wasn't the best place for her. She she left and then went to another school. But she still thinks that the Academy as her home as well. And the reason I bring that up is both of us had this idea that let's make sure whatever we do, that we'll make educational opportunity a cornerstone of our philanthropy. So we've done a lot with University of New Mexico, where we help kids, many from first generation families, go to college. And you should see the letters we get. I should have posted a few with the names redacted just so you get a sense. And, you will cry. And it is the American dream. And it's not corny. It's really important. And so I guess this is what I want to bring across, that because I didn't grow up--I mean, we raised our kids in Greenwich, Connecticut, which is about as different from Albuquerque as can be. And it's great in some ways, and I feel very blessed that we got to live there. But they didn't have that experience and watch the things that Sonnet and I saw. And so I think it was sort of built into us from very early on, and answered your question, that it was something that was never in doubt. And then I will also say, and then I'll let you jump in, Walter, I'm the first to say, I am fully aware how lucky I am. I mean, I worked really, really hard. And I think I was blessed to be born with some skills and pattern recognition. But I also started my investment fund at just about exactly the right time. And that had nothing to do with me. And so I recognize that part of having good fortune and being lucky is making sure you don't ever forget that. And making sure you give back and you give other people the opportunities, because who knows what's next around the corner? And I was just joking with Walter, my son is taking time off from Duke right now, and he's working in cryptocurrencies, and he loves it. And maybe this is something that will take him on some wonderful path. But I told him, the great thing you're doing, what I love, is you're following something you love. And he's already finding some ways to work in philanthropy to what he's doing in cryptocurrencies. And he has a business plan he's working on, he said I couldn't talk about it tonight, but it absolutely--it involves making it easier to give with cryptocurrencies. So I think we've managed to maybe implant a little bit of that on our kids, too. We'll see.
Walter Stern: So a couple of things from what you've said, Ian. First, I may not have shared the questions that I have here for you tonight in advance with you, but I'm thinking that you have some hacking skills, because--
Ian McKinnon: My son does.
Walter Stern: As I'm looking at my notes, it looks as though you've covered a lot of what I was going to ask you. But, so anyway, thank you. So tell us more about your parents. You mentioned your father was a lawyer and a Supreme Court judge, your mom was a poet--
Ian McKinnon: My mom was a poet, yeah.
Walter Stern: And tell us about more about their influences on your path toward philanthropy.
Ian McKinnon: So I think it's really interesting because I teach several--I'm a guest teacher at several different business schools. And, I think it was a student at Columbia Business School, said, So what was the background that led you into running a hedge fund? And I said, Well, I had a dad who was a judge, a mom who was a poet, and a grandfather who was a surgeon. So you take those three, and that's what came out. And what I meant was, and I'll get to the philanthropic part was, those different disciplines require viewing reality through really different prisms. And I think investment success requires the ability to do that, and recognize patterns where others see chaos. And it's really hard. And there's all kinds of analytics, and there's all kinds of accounting and quantitative work, but there's also that ability to step back. And I think my mom's poetry was central to that. Certainly my dad's logical rigor and my grandfather's medicine. But what was also important to all three of them, was their impact on society. And so I already mentioned my dad and his work, but my grandfather would often make house calls back then, that's what people did, and wouldn't charge people who couldn't pay. And there were lots of people who didn't have insurance during the war. My grandfather had bad asthma, so he stayed in Albuquerque while other people went. And he was one of the few doctors in town. One thing that's funny--now people are--but back when I was growing up, my grandfather had operated on a lot of people in Albuquerque. And so I would say my last name, they said, I know your grandfather! He operated on my gall bladder! But a lot of people couldn't pay him. And that was just fine by him. And I know that that really hit me, very, very importantly. And then my mom was really adamant about exposing underserved communities to art, and recognizing that poetry could be a vehicle out for many people and a vehicle of expression. So I think all three of them had a really big role. And I think my sisters, who's in the front row tonight, would agree that those three really imprinted themselves on us with very different lessons but all pointing to the moral obligation we have to give back.
Walter Stern: Well, thank you. And just on a personal note, I would just comment that one of the first non-lawyers that I met when I first moved to Albuquerque was your aunt Joan McKinnon, who was married to the Honorable Frank H. Allen, who ultimately became one of my partners. But she is another one of those inspiring women in this community.
Ian McKinnon: So I almost mentioned--so I called her Auntie Joanie. And my Auntie Joanie looked a lot like--I look just like her. And many people thought she was my mother, and I was really, really close to Frank--my Uncle Frank whose nickname was Speedy. He was born a little before his parents were married, so that's why he was called Speedy. And Speedy and Joanie were really like, second parents to me, and I spent a lot of time--their home was just a mile down Rio Grande from ours. And they too imprinted me with this obligation. So I almost mentioned them, but very much so.
Walter Stern: So you've mentioned the fact that philanthropy is not just about giving money, but it's that talent and time and so forth. But tell us what your first experience was, personally, in philanthropy, as you might want to define it.
Ian McKinnon: Now, that's interesting. I'm trying to think back...what the first one that really hit me, and maybe--
Walter Stern: Or maybe it's one that left an impression on you that---
Ian McKinnon: Yeah. I guess I remember one here when I was with you, and this was before Julianne was here, when Eddie Watson was still the head of school. We came and we were on the stage, and I stood [at that], and we talked about the gift we were making. And I had--I don't want to exaggerate--five faculty members, of whom I only knew two of them, because this was quite some time after I graduated, come with tears in their eyes, and say, Thank you for what you're doing and what you're enabling. And I hadn't thought of their perspective as teachers on what it would mean, because it would allow them to do more, have more resources, have more ability to teach, and give, and it really hit me because if we think back--so step back, think back to the--hopefully everyone had one or two teachers who really affected them. And I see some friends in the back--I see Toby that I know we had some of the same--there was--we had one dear teacher who really, I think, impacted like 800 of us, by the way. But we all had one or two. And think about what so many of those teachers had to do. As you know, many of them had to buy their own supplies, many of them had to do all kinds of things on their spare time. For me, it was a guy named [Rawly Verts], who was a chain smoking biology teacher here--of course. And he was also a brilliant chess player, and the chess coach. And I was a chess guy. And so, he would spend hours with me a day, playing chess and blowing smoke in my face. Yeah. Absolutely. But nobody paid him for that. He did that because he loved the school, and he loved teaching, and he loved conveying what chess was. And when I gave that gift, that all came rushing back to me, and I got kind of emotional. And so I guess that's the one I think of, perhaps because I'm sitting here. But there have been many others as well. We're very active at the Santa Fe Institute as well. I don't know if you mentioned that--that's a really special place. And I'm the vice chair there. And we do lots of programs targeted toward the community. And we just did a new one, which I actually don't think it's been--not Santa Fe Institute, another, I don't think has been announced--but one issue I'm very sort of vocal about is making the conditions on our Native American reservations better. I think it's really important. And so I've worked with the state some on that. And then I'm working with another group to try to bring more educational opportunity there. So that's having a big impact on me as well, because that's all around us. And too often we don't go on the reservations, see what's happening there.
Walter Stern: So tell us--you mentioned education is an important field of interest, and there's obviously, there's sort of a common thread through some of the other things that you've mentioned, including the Native American challenges. But tell us about the other fields of interest that you and Sonnet have embraced and pursued and perhaps why. I know in our family, our interests have evolved over time, depending on what is happening in our lives or in our children's lives or in the community. But tell us a little bit about that, Ian.
Ian McKinnon: Yeah, so--it was interesting. We, about, I guess it was four years ago now. So before four years ago, what we used to do with philanthropy is we would give appreciated securities, or give various forms of consideration cash to various causes. And somebody said, You should probably start a foundation, because you may not have a place you want to give, and it makes sense to have this that can last over time. And the way foundations work is you make a donation to the foundation and then you must give 5% away. And I thought about that and I said, Well that's nice. Because what I immediately thought is, maybe I can put our kiddos on the board and get them used to giving, and going through the process of analyzing where capital should go. And I think this is a place where philanthropy and what I do on the investment side are actually compatible. You want to make really sure that the places your dollars are going are being allocated appropriately to their highest and best use, that they're not going to causes or parts of the organizations that you wouldn't want. And so we've really gotten into healthcare, and answered your question. So we started with with education. And now we've begun helping fund various different health initiatives as well. I'm now on the board of the UC San Francisco, which I don't know how many people are familiar with UCSF, but it's a leading center of the world for medical research in many fields. And I mean, I've been like a kid in a candy store. Like Dammit, I can't believe this is called philanthropy. Like, I joined the board, I get to go with these brilliant Nobel Prize winning researchers who are diving into--oncology is the big cause that I really care about, because I lost my dad and Joanie, and actually everybody on that side of the family to cancer. And so I decided that along with education, we'd make sure we spent time in that field. And, by the way, just to put it out there, we're making real progress. We are. I know it may not seem like it sometimes, but there are some forms of cancer where if you have a particular genetic mutation, we can almost cure you. And I think we're getting better and better at sort of diagnosing those mutations ahead of time, being able to sequence in the right way, and actually making those disease states more accessible to a way that we never would have had hoped before. And I'm really excited about what's happening there. And my hope is, I mean, I think everyone's pretty familiar with immuno-oncology, which is harnessing the body's immune system, T-cells, etc. to fight cancer. I mean, cancer is so insidious. It tricks your immune system into not be able to recognize--and we've now figured out how to change that. And we're making big leaps beyond there. So that's a really exciting area for philanthropy. Because if, I just--when we found out my dad had metastatic lung cancer, there wasn't anything we can do. We could have done something now. And I think about that all the time. I don't know if it would have worked, but I would have tried, and we would have seen. And I want to make sure, when people get that awful sentence, when people get that awful [inaudible], they have hope, and we have some way to help them. So that's the other place. Education and healthcare.
Walter Stern: Excellent. Powerful and important fields of interest. So let me shift the conversation here a little bit. And a little bit of background about the way the Community Foundation has done it, some of its grantmaking over time. Up until the pandemic, most of the foundation's grantmaking was focused on programs, supporting programs of nonprofits throughout the four county area that is the geographic focus of the Foundation's work. But as the pandemic hit New Mexico, it became painfully aware, it became painfully obvious that there were many nonprofits operating in our community who were facing an existential threat. They were not going to survive the pandemic without some other kind of funding support. And the Community Foundation is not alone in this, but we shifted our grant making so that we were essentially making unrestricted gifts that could be used for operations and not necessarily for specific programs, with the goal that those nonprofits that we were supporting would actually survive the pandemic and live to then support their mission and pursue their mission going forward. And I think the Foundation has decided that it's going to continue to do that, unrestricted giving, and pursuing what I understand is referred to as trust-based philanthropy, which--Thank you, Brad. And the concept being that if you believe in the mission of the nonprofit that you're supporting, you should be trusting the leadership of those organizations to invest the monies that are being granted to them in the right place, whether it's to hire additional staff or to support buying a new computer, or putting it into programs. And obviously, there's--maybe there's a leap of faith involved there, maybe it's just a question of understanding the organization before you are prepared to do that. But tell us about whether that sort of trust based unrestricted funding approach has entered into your philanthropic philosophy or approach.
Ian McKinnon: Yeah, again, we didn't plan this. I believe emphatically in this. And it's something--I'd say 90% of our gifts have been unrestricted, if I had to guess. And my rationale is very similar to what you articulated, which is, remember, I drew an analogy between investing and philanthropy in the sense that in investing, one allocates capital to a business that's run by a management team and a board. And I wouldn't dream of telling that management team and the board what they should do with the capital I entrust them with. I've done research on the business, and I believe in them to allocate capital appropriately. Their job is to do that. And if they don't do that, I can sell my securities or try to change them, but it shouldn't be me telling them. And I've done the same thing with the charities to which we've donated, which is, I spend a lot of time with the leadership to make sure I understand how they think about it, how they prioritize competing--all kinds of competing uses and needs. It's hard, it's really hard. But how on earth could I possibly do that better than they? And so I think it's a really important thing, to the point where--in fact, during the pandemic, we started doing this even more, for the same reasons. And I think we did some things with the state together, where they called me, and we contributed some of the same things together. And I said, Look, you guys decide where it should go. I just want to make sure people have enough food and the food banks are full--the food banks. I remember, that's what it was. We had this terrible problem. The food banks were getting depleted before the shipments could be made. And I said, Well, we got to get more shipments. So whatever it takes to do that, let's do that. And I feel like that trust based aspect, you can always get burned. You can. But far better to take that chance and have the capital go where it should be than me dictating it should go somewhere. And that's one thing I should probably discuss too, which is, for a long time, I wasn't--well, I certainly wouldn't have been comfortable coming up here and talking about philanthropy because it makes it too much about me and my wife and my family. I certainly wouldn't have been comfortable putting my name on something because that makes it too much about me. And I came to get more comfortable with it. When I realized No no no, if we don't step up as an example, then how do we inspire others to do it? I'm making a stand, I'm doing it. And it was interesting, as I sort of went down that path--and I think you remember, when you called to ask me to do this, I think I said no at first. And then I rethought, I said, You know what? I will. But it can't be just me talking, it's got to be a discussion about why giving is important and--where it's not about me and us and my family. It's about what we're doing in the world and how everyone can get involved if they want to. And I do think that turning that sort of prism that you can view through gifts, you can view gifts, is an important way to look at it. And so I think trust based giving is part of that, as well.
Walter Stern: So the time is flying by. Let me ask you a two part question, and then perhaps we can open things up to the audience if there are questions from the audience. So the first part of the question is, What is your sense of the strength of the culture of philanthropy in Albuquerque or in New Mexico generally? And how do you think we can build and continue to improve that culture?
Ian McKinnon: That's a really interesting question. And I've been gone for a long time, and so it's--I still, by the way, I still call this home--but I haven't been here for a long time. And as I've gotten more involved, I've wondered about that too. And so, what I think about the culture of giving--maybe I'll tell a little story that helps illustrate where I think it's quite strong and robust. So we lost my mom two years ago, and my mom not only loved poetry, she loved the symphony. And she and my sister-- and Maureen's here--the symphony--my mom and my sister used to go all the time. And the last time I saw my mom alive was actually at a performance of Alice in Wonderland... so when we lost my mom, I had this idea. Okay, let's do something after her, that's about the symphony, that's about expanding their program and what they do. And I--when we announced it, Maureen, when was it, six months ago? I can't remember exactly what it was. We had a memorial for my mom. We couldn't do it during COVID. And so when we were finally able to have the memorial, we did it in conjunction with the symphony. And by the way, I will say, the symphony did original movements to my mom's poetry, which was absolutely magnificent. But when we went up on stage and talked about the gift, everybody stood up and it was loud inside there, and people were so happy. And it hit me that they all felt part of the same thing, and that there was a very strong culture of giving and of philanthropy. And I think what it takes is people stepping up and doing it. There's a--one of my favorite verses from the Bible. So it's the second book of Corinthians, chapter nine, verse seven. And it's: Everyone should give what they have decided in their heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. And I think the cheerful giving part is what fuels this culture. And I think as long as we have people continuing to get behind causes, show they support them, and do it cheerfully--it is infectious. And I think--I've talked to Julianne about this at the Academy, talked to the Santa Fe Institute people, University in New Mexico, it really is that way. And so I compare it to the culture of--well, I'll say this. We lived in Spain for a year. And in Europe, there's a very different view of philanthropy. It's not at all as robust. People don't view it in nearly the same way as we do in America. I look at the data--I'm sure in America we're the leading philanthropists the world. I'm sure we are. And we should be really proud of that as a country. It's something that stands out, I think. And I think in New Mexico it's very strong.
Walter Stern: Excellent. Is there anybody in the audience who has a pithy question that you might like to ask Ian? Or Joaquin--is there--are you getting any input from the folks online?
Ian McKinnon: Looks like you have to keep going, Walter. Oh, we got some. Okay.
Audience Member: [Inaudible question.]
Ian McKinnon: For people who couldn't hear it, the question is a great question about family philanthropy and how do you inculcate the next generation, the generation after that, with the same passion you have? And I think it's a work in process. To be totally honest, I'm still trying. And so when I mentioned that I formed the foundation, one of the reasons was to make sure that William and Ashley could be on the board and see what we're doing and how we do it and why we do it. But I will say it--that's hard. You mentioned the scope. They don't know. Partly because I've wanted to sort of bring them in gently, and I haven't known how to expose them. And so what I've been trying to do is not overwhelm them. And I realized at first I was overwhelming them. I was giving them all the different projects we were working on, why, and how to think about how to do trust-based giving, how to think about capital allocation--so I realized, no no no. Why don't you each pick something you really care about? And then let's talk about it. And we have to give 5% away--that's the rule. So we'll take an allocation, and if you make a good case, we'll do it. And that's proven vastly more effective. Like, it may sound obvious, but it took me a while to figure that out. And so that's how we're doing it, and I think--they're also young. I mean, they're still in college. So I think as they--as they get a little older, I'll bring them more into things, and maybe they'll take more operational roles. We'll see. And I also don't know--I haven't decided how big the foundation should be. I'm very much of two minds about this. Because on the one hand, maybe you make the foundation really big, and then it goes on and on and gives 5% away, and the kids go on, and the grandkids and... On the other hand, maybe that's a little weird. I don't know. Maybe it's better just to give it now, and get it out there. I haven't figured that out yet. But I'm sure they have been inspired by that, and by the fact that they can give from it as well. So that's how we're doing it, but I don't want to claim we have the right answers on that. We're still trying to figure it out.
Walter Stern: Well, I think of--as you're talking about that, Ian, I think of having learned about what the Hewlett family and what the Packard family, who--families that are more mature than your nuclear family, but it has been interesting to see how from generation to generation to generation, members of those families have stepped up and embraced the culture of philanthropy that their parents or grandparents established with their foundations. Other questions--Joaquin, did we get one?
Online Moderator: Yep, we sure do. We have a question from our virtual attendee. Jackson asks, What would Mr. McKinnon's advice be for young people looking to start their careers with the drive to one day be philanthropists themselves.
Ian McKinnon: So that's an interesting question, which is, again, I'm always moved by how much more intentional and wise kids are these days than we were, at least when I was growing up. I wouldn't have even thought to ask that question at what I assume is his age. And I would say... I often--I'll tie it back into philanthropy, but let me start with the career question, because I think it's a really important one, which I get asked a lot. And I think there is a--what I think it's an unwise piece of advice, which is often given at commencement addresses, which is to follow your passion. And the reason I think it's unwise is many people don't know what their passion is. And many people, even if they do know, they don't quite know how to do it, and they're not sure what that means. And I always tell people, No, no, no. In the beginning, try lots of different things. Really test and sample, and when you're young, take risk. I am really glad--some people might say, they said, Are you okay that your your sons dropped out of college to pursue crypto? I said, Absolutely. I mean, if it doesn't work out, he'll go back to school. It's fine. I think it's a great time to do that and explore. And so what I would say is, Pick something hopefully that's at the--if you think about the venn diagram--something you like and something that you have some kind of skillset in that's relevant--yes, that's a good idea. But really shoot high and take all kinds of chances. And don't be afraid to sample. And then you'll sort of narrow in on it. And I think in my case, it's interesting. So when I--after business school, I went to Bain. And for those who don't know, Bain is one of those big management consulting firms, where--in fact, one of my clients was Hewlett Packard. You go in and you give advice, and you advise them on corporate structurings. And what I loved about that was I got to see all kinds of different businesses. I got to see HP, I had an airline as a client, I had lots of different clients that gave me a chance to see what I might like and what I might not. And I think if you can find jobs where you're able to have real variety that really tax you, I think that's a great idea as well. And then often, the sort of monetary rewards will follow if you sort of find that right thing where you find yourself spending more and more time. And remember, when it comes to philanthropy, it may be that you get really good at something, and you volunteer and you help businesses. I have a lot of the business school students I teach go out and help small businesses with their accounting and consulting. And that's a form of philanthropy that's very powerful. So there are all kinds of ways to get there. That's what I'd say.
Walter Stern: Anything else on that? Okay. Any other--yes, please. If you want to come up, and--
Ian McKinnon: I can repeat it, it's fine.
Audience Member: So, I'm from here. I've worked in philanthropy most of my career in Chicago, and then I moved home, and I started consulting. The thing I think we need to work on the most in philanthropy in New Mexico is our board service. How we... our boards, how do we recruit our boards, how we manage our boards. What do you look for when you are looking to join a board? How to decide what is an organization board...
Ian McKinnon: That's a really good question. Gosh, it's better than any question Walter asked, by the way.
Walter Stern: I specialize in dumb questions.
Ian McKinnon: I think this governance question is profoundly important. Because if you--nonprofit boards are very different than for profit boards. And having served on both, the nonprofit board--what I really look for--I guess there are three things that pop into my mind, but I don't want to say that list is exhaustive. The first is a leader, whether that be executive director--in Joanna's case, Head of School--who really wants to utilize the board and take advice from the board and actually get involved with the board on weighty matters. And when Joanne came in the middle of the pandemic, I did send her several notes, because I was just thinking, What must she be going through? And I could only imagine, and I wanted her to know that we had her back. But I also think she wanted to work with us as well. So there was a partnership. So that's what I would say, a partnership with the leader. The next is a real diverse cross section of board members. I think it's very important to have people from different backgrounds, and not just different ethnicities, different professional backgrounds, all different forms of diversity. Because it really does lead to much better answers. And I've been on some boards where that really hasn't been as much as it should. And I think they suffer in their decisions. So that's board composition, I guess would be that. And then the third is a commitment from the board to giving. I do think that there's an obligation when you go on a board to actually step up and give. And some boards give more than other boards. And I always like to say, Okay, if I'm coming on, I want to make sure there's people around me have the same point of view. And I always look at that. And it's not that there's a ratio I look for or anything like that, but it's that there's a culture of giving that pervades the board. Those are the three things. I don't--is there anything else you would say, as someone sort of in the industry?
Audience Member: ... and the organization always has to be managing their board. The executive director is going to spend a lot of time with the board. And that should... normal...
Ian McKinnon: Yeah, I do agree with that.
Walter Stern: Well, Ian, it has been--let's have one more question. And maybe one more after that. It's on.
Audience Member: For those of you that don't know me, I'm Maureen Baca. I'm chair of the board of the New Mexico Philharmonic that Ian referred to his great gift to us. And this is really a tribute to you, because I want to say that your gift has done so much. The financial part of it, of course, is huge. But it has been inspiring to our board. As you saw yourself, it's been inspiring to our to our audience, to our musicians. And the impact of it has been amazing. And among other things, we'll be able to, of course, permanently remember your wonderful mother, who we love so much. So this kind of gift has a huge impact that impacts so many people in our community. And I cannot thank you enough for what you've done for us, and in turn, what enables us to do for this community.
Ian McKinnon: Thank you, Maureen.
Walter Stern: Let's take one more question from Billy Gupton. And then we'll wrap up.
Ian McKinnon: No pressure, Billy, you're the last one.
Audience Member: I think ESGFRI, then it was ESG, now it's sort of moving for impact investing. So where do you see the future going, more on the investment side, as far as for individuals or foundations, nonprofits are trying to--still need to answer questions... provide retirement, but want to also be able to be creating an impact in a more proactive rather than reactive way.
Ian McKinnon: Yeah, I think this is a really important question. So for those who couldn't hear, the question is, when ESG and other big trends become important in people's minds, and for those that don't know, that's environmental, social, governance--that there are criteria other than investment return that may go into the investments that people select. And that's become a very important mode of investing. But there's also some real criticisms of it as well, partly because I think there's a real definitional issue about what it means. And what I have always said about this, and I think it's funny you ask, because I think there is a link to trust based philanthropy, is, I will say, there have definitely been some businesses in which I thought the business model was excellent but I didn't care for the CEO in certain respects that had impacts on what would now be called ESG. And I decided, I don't need to have my capital there. There are plenty of other places to go. And so I have steered capital away... So, as an example, I won't invest in a tobacco company, because of what it did to my family. I will not do it. But that's a choice I make as an allocator of capital. I think where it gets more difficult is where you have a fiduciary duty to others who have given you. And do you have the right to make that decision? I think you do if it's in your charter, but it has to be in your charter. So these are very tricky questions. And what I say is, Let's find ways to use the market to fund the things we want. So green energy, let's go to green energy, because I think it's really exciting. If you go back--so let's take solar and wind, and let's look at the cost curves on each. So we've made far more progress in cost per gigawatt or however you want to measure it over the last seven years than anybody thought possible almost every step of the way. And part of the reason is because of investment, part of it has been because we've gotten a little lucky. But it's also been that it's been a very popular place to get capital. And now we just passed a big piece of legislation, we'll get more capital going into that area. I'm actually really excited about that, because I think--that bill's not perfect, and no bill out of Washington is, but at least some of the projects really actually do make sense. And we may see some real sort of good outcomes from it. And I think that's the way to attack it, which is to make sure there are market incentives to do the right things we need. And so just one more thing on this--I think it's really important. When we think about pollution, and carbon, an economist calls that a negative externality because economists had to come up with really stupid jargon to say obvious things. So all that means is an economic output that isn't properly priced. In this case, it's negative. So there's an incentive to pollute, because no one's penalizing you for it. I think we can all agree in the audience, Well, that's stupid. We should have a price for that. There should be a penalty for it. You shouldn't be able to do something that has negative costs for everyone else, and not have to bear that burden. How you accomplish that, though? That's a very different question. And I think we're making progress here. California's certainly doing some interesting work in it, which we're involved in. And so that is another area we're beginning to get involved, is on the environmental side. Because--climate change, and what's happening--this is--the data are incontrovertible. The question is, how can we bend the curve? What can we do about it? And I think we have an obligation to really try. And fortunately, we're beginning. So that's why I'd say. That's a long winded answer, but that's what I'd say.
Walter Stern: So, the two of you have just opened up a whole new reason for another conversation, Ian, with you to talk about ESG and diversity, equity and inclusion, and impact investing, and perhaps sacrificing some financial return in exchange for a social return of some kind. And actually, just incidentally, the Community Foundation has an impact investment program that if people are interested in, we can share information about that with you. But let me wrap things up. And Ian, you and Sonnet are a true treasure, to use the term that you used earlier, and I want to, on behalf of the audience and the foundation and the Academy, thank you for the time and talent that you've provided with us this evening. So thank you.
Ian McKinnon: Thank you. Thanks everyone.
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