Alexander Buffett Rozek on Learning to Be a Skillful Donor

"Philanthropy is one of the toughest businesses there is."
--Warren Buffett on Bloomberg News

The Oracle of Omaha isn't the only person in his family who works with money. Alexander Buffett Rozek, the grandson of Buffett's sister, Doris, has made great strides in the world of philanthropy.

Rozek has been a leader in philanthropy education since 2003 at the Sunshine Lady Foundation, which his grandmother founded. In addition to managing an investment partnership in Boston, he served as director of the Learning by Giving program, which began at Sunshine Lady before growing to become a separate foundation that now partners with more than 35 colleges and universities. Rozek is the foundation's chairman and president.

With a team from Google, the Learning by Giving Foundation has developed a massive open online course, or MOOC, in philanthropy, the first of its kind; more than 10,000 people participated in it last year. Those participants collectively identified high-performing nonprofits, 40 of which won cash grants from the foundation at the end of the course. Now the course has been retooled and is available on edX, a nonprofit online learning site created by Harvard and MIT. Registration is open and free, and you can participate in each section of the course on your own schedule.

If you want an easily accessible way to increase your skill and intelligence as a donor, take this opportunity to register for Giving With Purpose. If you have questions about online philanthropy education, Rozek may have an answer for you -- I recently interviewed him, and here's what he had to say:

Mark Ewert: What goals were you trying to meet by developing Giving With Purpose as a massive open online course?

Alexander Buffett Rozek: The goal was to take what has been pioneered in brick-and-mortar college and university classrooms over the last decade and expand it to an online classroom. We are passionate that this can be a useful mechanism to get large amounts of philanthropic capital into communities where it can be the most effective. It's hard to distribute money thoughtfully. This course and the MOOC platform give participants the tools to do just that.

Mark: Did the response to the first round of the online course last summer take you, and the developers, by surprise? If so, what was surprising?

Alexander: Yes, in good ways and in bad. The demand exceeded our expectations, and so did the passion of the students! The good news is, people care, and that passion translates into the thoughtful grants. As a result of this course, 40 grants went out, and that was due to the collective effort of thousands of students. It's inspiring to watch what can happen with a collective effort.

Mark: A good part of Giving With Purpose is dedicated to a framework called RISE [Relevance, Impact, Sustainability, Excellence in Management and Operations], for understanding and evaluating nonprofits. Each course participant is invited to apply the same RISE framework to herself or himself as a philanthropist. What role do a person's own motivations, values, faith, or family culture have in being skillful with philanthropy?

Alexander: In my opinion, personal motivations, values, culture, etc., are the raw materials. Learning how to apply them allows them to achieve the maximum effect. A good example is a baseball player with a ton of raw talent. With a great coach, they can become an All-Star.

Mark: The Giving With Purpose course encourages analysis of nonprofits based on their sustainability and results. This would favor organizations that deliver consistent, predictable outcomes. Yet your uncle, Howard G. Buffett, emphasizes risk-taking as essential to good philanthropy in his book, 40 Chances. How can donors navigate this tension between conservative and high-risk investments in social change, and make good choices about their charitable giving?

Alexander: I think the variable is learning and education. The more we all learn from the challenges, risks and achievements of others, the more we will be able to achieve ourselves. That is true in any endeavor. The Wright brothers took great risks and were followed by generations of aviators and engineers. Now aeronautics is a science. We needed both, over the past hundred years, to get from there to where we are now.

Mark: Toward the end of the course, either in the classroom or on online, the participants use money from the Learning by Giving Foundation to make substantial grants to nonprofit organizations chosen by the course participants. How can participants expect that to be different from when they are making donations from their own financial resources?

Alexander: If the course is successful, it will not be any different. Hopefully, they will take the lessons learned and apply them to their own donations and philanthropy. Staying with the aviation theme, if you took a course on building a plane and your final project was a success in the air, we hope that what you build on your own would fly as far or further than what you built in class!

Mark: The new and updated Giving With Purpose MOOC has its registration open and will be starting soon. What changes have you made this time, using what you learned in the first round, and what new materials have you included?

Alexander: The biggest change is that it is now on edX. The edX version has the benefit of a user interface and user experience refined over a much larger audience and a much broader set of subjects, so we feel the students will have an experience far improved over our first offering. In addition, the lesson material has been reshot, we have a new guest speaker, and the brand-new grant app allows for a better level of peer review and grant-making experience than we have ever seen.

Mark: The Motley Fool community is made up of intelligent, independent investors. What would you say to these people as they consider stepping more intentionally into philanthropy?

Alexander: Whether investing in securities or investing in humanity, the goal should be to do so intelligently. And any intelligent process is the outcome of careful study. If you are interested in making a difference in your community and want to make the most of every dollar you distribute, sign up for Giving With Purpose on edX!