Why I gave away my company to charity

As the rain falls heavily in Extrema/MG where I'm spending a public holiday, my friend Eric talks about the entrepreners he admires the most. One of them, Derek Sivers, wrote an article I find fascinating, combining inventiveness, competence and self consciousness.

Enjoy it!


Extracted from: http://sivers.org/trust


Why I gave away my company to charity

Two friends were at a party held at the mansion of a billionaire. One said, “Wow! Look at this place! This guy has everything!” The other said, “Yes, but I have something he'll never have: enough.”

When I decided to sell my company in 2008, I already had enough.

I live simply. I hate waste and excess. I have a good apartment, a good laptop, and a few other basics. But the less I own, the happier I am. The lack of possessions gives me the priceless freedom to live anywhere anytime.

Having too much money can be harmful. It throws off perspective. It makes people do stupid things like buy “extra” cars or houses they don't use - or upgrade to first class for “only” $10,000 so they can be a little more comfortable for a few hours.

So I didn't need or even want the money from the sale of the company. I just wanted to make sure I had enough for a simple comfortable life. The rest should go to music education, since that's what made such a difference in my life.

So I came up with a great way to do this. I created a charitable trust called the “Independent Musicians Charitable Remainder Unitrust.” When I die, all of its assets will go to music education. But while I'm alive, it pays out 5% of its value per year to me, to cover my living expenses.

A few months before the sale, I transferred the ownership of CD Baby and HostBaby, all the intellectual property like trademarks and software, into the trust.

It was irreversibly and irrevokably gone. It was no longer mine. It all belonged to the charitable trust.

Then, when Disc Makers bought it, they bought it not from me but from the trust, turning it into $22 million cash to benefit music education.

That's one way to sleep well at night, huh?

So instead of me selling the company - (getting taxed on the income, and giving what's left to charity) - that move of giving away the company to charity then having the charity sell it saved about $5 million in taxes. (That means $5 million more going to music education instead of another tank in Iraq or a banker's bailout bonus.)

Also, the move of giving it away into a trust now - instead of holding on to it until I die - means its investments get to grow and compound tax-free for life, which again means more goes to musicians in the end.

I'm writing this article because many people have asked why I gave it away, so I thought I'd write my long explanation once and for all.

It's not that I'm altruistic. I'm sacrificing nothing. I've just learned what makes me happy. And doing it this way made me the happiest.

I get the deeper happiness of knowing the lucky streak I've had in my life will benefit tons of people - not just me.

I get the pride of knowing I did something irreversibly smart before I could change my mind.

I get the safety of knowing I won't be the target of a frivolous lawsuit, since I have very little net worth.

I get the unburdened freedom of having it out of my hands so I can't do something stupid.

But most of all, I get the constant priceless reminder that I have enough.

What matters to you?

Wish you get involved with something that matters to you in 2010.

Happy new year!

Multiculturalism at COP

One of the great things about COP15 is its multicultural environment. It's common to have lunch with a Saudi official representative, see smiling Nigerians in the trains and find ourselves in a circle of 12 people from 9 different country.

The top moment, though, didn't happen in Bella Center. A couple of days ago, I was in train from Copenhagen (Denmark) to Malmo (Sweden) and saw Danish parents playing with a happy baby. In the next stop, a group of English speaking Africans got into the train. The baby was fascinated by the woman who sat behind his mother and basically spent most of the rest of the trip on the lap of the unknown loving lady.

Copenhagen breaths global warming

First published on www.g-1billion.org

An amazing thing in Copenhagen is how everything in the city reminds us of COP15 and the climate change issue: corporate ads, unexpected events, protests and the NGO manifestations.

Out of all, 2 are my favorite:

- The fossil of the day award, by CAN – a shame award, highlighting the 3 top countries blocking the negotiations on each day.



- The Greenpeace tck tck tck campaign – spread posters featuring some of our global leaders across airports and public spaces all over the world.



Wonder how much leaders are touched by these things. As representatives of the public will, I really hope they are!

What's lacking for negotiations' progress?

First published on www.g-1billion.org

Have you noticed that some of the most admired and care attracting people we know are the helpful ones? Have you realized that the best way to earn somebody's respect and commitment is trust?

Those seem like very obvious statements, lessons we learn very early in life. Well, maybe not as much.

Observing the COP plenary this morning, some mental paradigms were clear:

- Tell me the size of your commitment and I'll do just a little less (when discussing greenhouse emission targets)

- I will just sign an agreement obliging me if we all sign another one obliging others (developed countries trying to suspend the Kyoto Protocol, because it was not guaranteed that the Long term Climate Agreement would be ready)

- I wanna take advantage of somebody else, even if I need to create a doubtful reason (oil producers, wanting money from developed countries to compensate their revenues loss with a low carbon economy)

- I share the dream, but don't want to take the sacrifices to get there (all countries, when trying to lower their commitments)

If we seriously want to keep global warming under 2 degrees, we urgently need to change this win-lose mental model. This is not a trade negotiation when the less I conceive, the more I gain. In the climate discussion, the more I do, the better for everyone (including me!). And if trust inspires commitment, who is going to step up and announce a seriously challenging target?

Biggest climate change demonstration in history!

ZoeCaron's picture of the civil society march this afternoon.

Brazil is mobilized for the COP 15 – and for what comes after

First published on www.g-1billion.org

Have you ever heard the statement “if only the media would cover this critical issue…”? It’s fair enough, because the media, particularly TV, has an unbelievable mass reach. Well, when it comes to global warming and COP 15 coverage, Brazilian media is behaving exemplary.

In the last week or so, all news sessions on TV, all newspapers and most of the most read magazines are featuring at least one piece of news focusing on the theme. In practice, this means that every Brazilian is being exposed to what global warming is, what the consequences might be and what each one of us can do. Personally, I received 2 calls from friends who don’t care much about sustainability to congratulate me for taking part of COP 15 – quite impressive, huh?

Good news is the media is not the only mobilized sector. On top of environmental NGOs and individuals, commonly resistant sectors are standing up for a courageous position. A good share of the Brazilian most influential companies signed, in the last 3 months or so, letters and agreements pressuring the government to establish a greenhouse gas emission cut goal and stating their commitment to efficiency, supply chain policies and low carbon innovation.

The initiative paid off. The government announced a 36 – 39% reduction goal for 2020 and dropped all the excuses about the damage to Brazilian business competitiveness internationally.

I’m curious to talk to people from other nationalities to see how other countries are acting and how the population is being involved. I hope it’s going to be a tough race with many great examples. This way, countries might fell empowered to set daring goals in Copenhagen and work hard, after the conference, to establish a system stimulating the productive sector to be innovative towards solving the world’s biggest problems.

Brazil is definitely on that race!

PS: I’m arriving in Copenhagen tomorrow, so you can expect more posts about Brazil, the companies’ position and craziness of engaged individuals.

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