This week, we bring you a special bonus Rule Breaker Investing: an interview with David Campbell, co-founder of All Hands and Hearts-Smart Response, a nonprofit dedicated to helping communities internationally and in the U.S. rebuild after disasters. His motto: maximum impact, minimum bureaucracy.
Motley Fool co-founder David Gardner talks with him about the events that led him to leave the tech world and refocus his life on projects like constructing new schools in villages devastated by tsunamis or earthquakes, how his organization differs from other similar charities, the unusual story behind a nonprofit merger, and more about the amazing work they're doing.
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A full transcript follows the video.
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This video was recorded on Dec. 16, 2017.
David Gardner: And welcome back to Rule Breaker Investing. A delight to have you join me, and my friend David Campbell, for this Rule Breaker Investing Audio Extra. A little bit of fun for your weekend.
We're delighted this time of year, every year, at The Motley Fool to do what we call a Foolanthropy drive, where you can come and see a new partner of ours. Generally, a not-for-profit. One that we admire, one that we've gotten to know, and one that The Motley Fool community can come together and support.
And, of course, for most of us that might mean a holiday check, and I hope you'll consider that, although I know we're going to talk a little bit about giving away stock. I'm going to talk about that a little later, but you can also just check out AllHandsAndHearts.org. You can see David Campbell's creation. You can see ways that you, yourself, could volunteer.
Well, before I get into that too much, let me introduce my guest. "Maximum impact. Minimum bureaucracy." That's David Campbell's motto. David has been a technology executive, board member, investment banker, humanitarian, field volunteer [this is a very motley life], and for the last 13 years the co-founder of All Hands and Hearts, our Foolanthropy holiday partner for 2017.
He's also the author of two books, most recently All Hands: The Evolution of a Volunteer-Powered Disaster Response Organization. I want to welcome David Campbell to the show today. Welcome!
David Campbell: Thank you, David! It's great to be here! We really appreciate The Motley Fool's support: the economic support from you and your fans; from the organization, itself; as well as from [those on] your team who volunteered onsite with us in Houston.
Gardner: And they had a great time with you in Houston. They were very much inspired. Not surprising, because the work that you do is so inspiring not just to the people who volunteer but, of course, the people that they're serving in disastrous situations. Giving them hope and rebuilding hope, which I know is a big phrase for you.
Let me start by asking you, David. What inspired you to start All Hands?
Campbell: It came not by plan, but by one of those synergistic events. I have had 40 years of running different technology companies. One of them a company up in Cambridge, MA called Bolt Brannick & Newman, [BBN Corp.], that had a lot to do with the development of the internet. And when the tsunami happened on December 26, 2004 I was motivated by the thought of how you would use the internet to help in the largest disaster that ever happened in my lifetime.
I went to Thailand and helped with a group of people -- put up websites and so on -- mainly to tell the story out about what was going on there and what might be needed. And what surprised me is [there's a] phrase called SUVs, but in this space it stands for "spontaneous unaffiliated volunteers." People who saw the need and started coming just to help. And over the next three months, that project did tremendous things to rebuild fishing boats, and rebuild homes, and so on. And I thought it was a one-time event.
Then eight months later Katrina hit the U.S., and several of us who'd been together in Thailand realized that everything we had learned in Thailand was relevant, and so we incorporated as a 501(c)(3) that weekend and literally went from not existing to five weeks later having over 200 volunteers living in a church building in Biloxi, Mississippi and it's all I've done ever since.
Gardner: Wow! Before we go forward, I have to ask you a little bit of a BBN question, because I remember. Was your company not acquired by America Online?
Campbell: It was acquired by GTE. [With] BBN we did a major part of building out the networks of America Online in the 1994-1997 period of time, and then we were acquired by GTE as they were merging with Bell Atlantic to form Verizon.
Gardner: OK, got it. I remember BBN because I was on the AOL side. We were an AOL site and we were AOL shareholders. We were very grateful for the partnership. BBN really enabled AOL to become America Online in a lot of ways.
Campbell: Well, we were building out that network. It was a big project for us.
Gardner: That's great! David, how do you decide whether a site is right for you? Clearly, Houston was one. Were you also, then, in Miami? Can you be everywhere? How do you triage? How do you make those tough decisions?
Campbell: No. 1, we can't be everywhere. We're still a small organization, now, with about 135 full-time staff and today probably 500 volunteers in the field, so substantial but frankly modest in comparison to the needs in the world. One of the phrases that I've used in the organization was "events that overwhelm the community's ability to respond."
In the early years after we did Biloxi, we did mostly international projects. The next year we did Indonesia [and the] Philippines. Then Peru and Bangladesh. It wasn't until 2008 we did our first major response within the U.S. out in Cedar Rapids, Iowa. And ever since then we've done a very large number of modest-scale projects in the U.S. after tornadoes. After flooding. We've done maybe 60 projects within the U.S. and about 30 internationally, so we're approaching having 100 projects going on.
We don't go to countries where we think a cluster of mainly Western volunteers would actually be [in danger]. That tends to [be limiting], to some extent. But we've done projects in 20 different countries. Today we're in Nepal and Peru. Very large projects in both Texas and Louisiana, and new projects because of the tremendous spate of activity in the last several months based in the U.S. Virgin Islands and the Florida Keys. An assessment team in Puerto Rico as we speak. And one going to Mexico because of the recent earthquake activity there.
Gardner: I'm just guessing that it's much more complex to do this internationally as opposed to domestically. That may be a misconception. And you started internationally, so if that is harder, then you were doing the harder stuff. How do you assess international vs. domestic?
Campbell: They're very different businesses. I refer to them as businesses. We really look at international and domestic [as having] two different sets of rules and issues, and then within each of those response vs. recovery. As part of the merger, we talked about the phrase of being "smart response." But smart response is not just focusing on the first 30 or 60 days, but looking at the two-or-three-year needs of these communities, and so we really are those four different business units: international response and recovery, domestic response and recovery.
In a way the international are easier, because we're generally going into, frankly, underdeveloped countries. Haiti and Nepal are marginal places like Peru and Ecuador. And there are, frankly, less rules. We can get directly into communities that have a great need. In the international process, much of our current focus is on rebuilding schools.
For example, when the earthquake hit Nepal in April of 2015, in 60 seconds there were 8,000 schools destroyed. So, in infinite need it's easy to identify communities that no longer have a school and as my partner, Petra Nemcova, says, if you don't get a school replaced for four or six years, you've lost a generation of kids that will never have a school. So, Petra started an organization called Happy Hearts Fund.
She actually was in Thailand when the tsunami hit back in 2004. She lost her partner in the tsunami and was injured. And when she went back to thank the people who had taken care of her, she was shocked to find that schools weren't being rebuilt. So, she created her organization to raise money [using her celebrity and frankly wonderful personality], to raise money to rebuild schools. We first met in Peru 10 years ago, but then we started working together in Nepal, and over the last year decided we could be better together. So, we officially merged the organizations and just announced that four weeks ago.
Gardner: I started by using the phrase "All Hands Volunteers," but that's not really the phrase these days, just in the last few weeks.
Campbell: Correct. Our new name is "All Hands and Hearts-Smart Response." And all of those things are important to us. It's important to use the power of the hands: the volunteers who show up. We really do pay attention to having the heart and wanting to be part of bringing a community back. And we're very focused on the need for really systemic change in the disaster response space -- and Smart Response is part of that -- allocating capital to be there for the recovery, and doing the recovery as rapidly as you can, but also as effectively as you can.
I was [in Peru] with Petra last month. We dedicated the first new school built in Peru after an event that had happened 12 months ago. That school was opened within seven months of when we started that project, and that's important.
Gardner: I want to go back there in a sec, but let's step back for one minute. I know you've been a CEO. You were an investment banker, as I mentioned, so you have a business mind. And as business people, you and I recognize [that] very frequently in the corporate world there are mergers. But this is more unusual in the not-for-profit world. How did the decision come about and how do the finances comingle? What is the process by which these things merge?
Campbell: It is quite different, and again, in my corporate life I was involved in more than 30 transactions, either acquiring companies or being acquired a couple of different times, so I was very familiar. There's a very simple motivational system in the capital markets to combine things that doesn't exist in the not-for-profit space.
We were both financially strong organizations. We both had several million dollars plus on our balance sheets, but we were working together and recognized. Frankly, to some extent Petra presents and accesses a different community of donors, and we bring the ability to commit to a schedule of delivering a result like building a school.
And when we're building a school, we look at it as we really do three things. No. 1, we hand over the physical product like an earthquake-resistant, safe school that probably will also become the center of a small community.
No. 2, when a group of volunteers come into a community that's had tremendous loss, it's a great psychological benefit to them to see the outside world coming to help them. That's important.
And honestly, I think the most important thing we do is [have an] impact on the volunteers. In our theoretically connected space, we don't have people connected to each other the way we might want them to be. And when our volunteers live in a village in Peru, or Haiti, or Nepal, or anywhere -- and actually work with the people in those communities -- they get a bond with the community of respect, and affection, and mutual support that creates space unlike, really, almost anywhere else in the world of people united by purpose and doing something for someone else. And those are very powerful forces that I think, honestly, are needed in our world.
Gardner: You bet, and the phrase that I led off with, and that you use on your website, "Maximum Impact. Minimum Bureaucracy." Can you give me an example of each of those?
Campbell: We have tremendous trust in our people in the field. In the early days when I was running the organization and also doing the fundraising, it would be one person's decision on the field. You could see the need. You could buy more chainsaws. Get more vehicles. Approve materials to tarp a house.
From that beginning, at each of the projects we have tremendous confidence in the individuals on that project, and we have a very interesting unfair advantage. If I'm running a project in Nepal, and I have 75 volunteers working, I'm getting a free opportunity to meet potential new employees who are going to live with us for weeks or months. They would love to have an entry-level position in our organization... so we get to see people like no corporation ever does. We see them work. We see them interact. And after three projects, we all know that "Margaret" is a wonderful person interacting, and then we offer her an entry-level position. All the people in the organization have come up, initially, as volunteers, and we really know them well before they get to join the organization.
Gardner: Yes, I'll bet.
Campbell: Therefore, we put tremendous trust in the people at that local project to make decisions about pace and about economics. That allows us, I believe, to continue growing as long as we can maintain the culture at really the project level.
Gardner: Obviously, David, you're not the only one doing this kind of work, in the world, and that's good news, because we want as many people there for disaster relief and response as possible. How do you differ from somebody, let's say, like the American Red Cross or other organizations that are dealing with disaster relief?
Campbell: Well, No. 1, the demands created by disasters are significant, and they're increasing rapidly. The total number of people impacted by disasters has doubled in the last 25 years, partly because people are moving to urban areas on an international basis. Partly because of climate change -- an increase in the amount of flooding -- and so on and so forth.
It's very important to look at how organizations define their actual mission. The actual responsibilities of the Red Cross are to do things like provide temporary shelter immediately after a major event. Provide food immediately after a major event. They don't have a responsibility to rebuild schools, for example. That's not in their mission, so it would be important to understand the whole tableau of disaster needs.
For example, there's tremendous media coverage immediately after an event, but the recovery activity is two, three, five, seven years long. As we know, New Orleans was recovering after Katrina for more than 10 years. There were still homes needing recovery.
So, it's important for donors to think, "Where do I want my support to go? Do I want it to be in shipping cartons of water to people in the first 30 days, or do I want it to be helping people in Houston return to their homes over the next year?" We're recovering homes in Louisiana that were flooded starting in March of 2016, and there are people that haven't been able to move back into their homes in almost two years.
Part of our motivation is to get people back into their homes, so you can hold communities together. The disaster space has great needs. Has multiple players. I think it's important to pick trustworthy players, and we advise people to go to things like Charity Navigator, and GuideStar, and services like that. We've always been frugal, and so we get great ratings, but partly because we're living in the community we're very cost-effective, and we're directly engaged with immediate impact.
Gardner: Well, I'll certainly be donating and I'm going to donate appreciated stock, because that's the way that I like to give. We've talked about this certainly before. My Rule Breaker Investing listeners will know that that's the most efficient way that I found, so far, to give. There are some really interesting other ways -- donor-advised funds and those kinds of things -- and David you might want to speak to that; but at least for me, I'm going to be finding one of my stocks that has run up really well over the years, I'm going to find some shares of that, send them off to Hands.org, and know that any capital gains tax I would have paid is forgiven, and so all of the money that you give from appreciated stock reaches your organization.
Campbell: And I would second that, David. I've funded my donor-advised fund with appreciated stock, too. There's two other things that occur to me. One, for people who have 401(k)s and are past the age of 70, anyway, they can give up to $100,000 a year directly from their 401(k) to a not-for-profit. The tax code is a 501(c)(3). And that has no compensation implications at all, and that's still in the current code.
More significantly, with the impending changes to the tax code, it may be worthwhile for people in 2017 to think of setting up a donor-advised fund with a gift in 2017, which would be deductible, and then you could give from the donor-advised fund several years in the future just in case you may no longer be able to get charitable deductions under the new tax law. So even if people have a more modest donation ability [$5,000 or $20,000], putting money into a donor-advised fund in 2017 to get the tax deduction this year may be a prudent step.
Gardner: Of course, consult your tax professional. We all have our different situations. A donor-advised fund is not something we regularly talk about on this particular Motley Fool podcast but, again, I'm a Schwab customer. Typically, you can ask your broker about these. It's a very effective, more convenient way to give, because you just make your one-time stock donation into that fund, and then you just write checks off of that. You don't have to do all these individual, "I'll give you these three shares, and this other guy I'll give 10 shares." [This] can be a little time-consuming.
Campbell: Plus, you can basically pre-fund years of donations. All the donations you might make for the next three to five years, you could put into a donor-advised fund in 2017, be certain of getting a deduction, and then still make your donations over the next five years.
Gardner: So, David, you are, again, coming from the corporate world. I'm curious. Have you done some work, or have you had partners who are public companies today? Are there some companies that you think are doing good work out there? They're for-profit, but they're partners. They're doing good stuff in the world.
Campbell: We have some wonderful partners. One of the reasons is they like to have their employees engage with what we do. Motley Fool sent a team of people to work with us in Houston. Companies like Southwest, who give us great support for our travel but then send teams of their people to volunteer when there are particular events, as there were in Texas. Medtronic has been a great partner of ours. We're looking to partner with them because they have facilities in Puerto Rico where we're looking to launch a project.
One of the things that we offer to corporations is that your employees can live with us and see the benefit of the corporate donations helping communities. And to me it's like the ultimate transparency. We've always pushed transparency. Our financial reports, our audited reports are on the website. But the ultimate transparency is, say, come and live with us. You'll be on-project. See how we manage. See that we don't waste a dollar. And [for those] corporations who want to have employee engagement, All Hands and Hearts is a great partner. [We're] enthusiastic and open to partnering with corporations for a combination of employee engagement [along with] support in an area that has tremendous need.
Gardner: It's interesting to hear you mention those two companies, much admired, especially by Americans since they're both American companies. I know there are others, too. But throwing a little love to LUV, ticker symbol [LUV], and then, of course, Medtronic. [These are] both companies that have been led by people who are very visionary...
Campbell: Correct. Absolutely.
Gardner: ... and big-hearted, so I'm really glad to hear that. I guess I have to ask you the Rule Breaker question, as we close. This is the Rule Breaker Investing podcast. Underneath our name is this concept that we don't like conventional wisdom. We like to look at the world as Fools and say, "Maybe we should break the rules of how things are being done in this industry or this context." Birds of a feather flock together, David, with people who, themselves, are visionary and looked at the world and said, with Robert Frost [this line is on his gravestone], "I had a lover's quarrel with the world." They have something that they think can be fixed.
Could you briefly share one angle, here, where you've gone after conventional wisdom? Maybe a story? A Rule Breaker story?
Campbell: Well, certainly the conventional wisdom for people who see a disaster [is to] say, "I wish I could help," and most organizations would say, "Stay home and send money." Since I had chosen to go, I realized that with the right approach and the right platform, individuals can be successful. The Thailand experience taught me that and certainly the post-Katrina, Biloxi experience.
So, the breaking of the rule is not a yes or no, "Can I go and help?" It's find the right vehicle to go and help. There is nothing quite the same as being personally engaged with the people you're helping, whether you're cleaning out a house and the family is going to be able to move back into it, or building a school and celebrating that with the community. Throwing yourself against the need, whether it's after a disaster like ours, or helping in a day care center. I think engagement is an important way to link your soul with your philanthropy and find organizations that you are proud to work with and live with, and then support them. That's really a double benefit.
Gardner: Well, David, I want to thank you very much for spending a little time with me and my listeners this weekend. A delight to learn more about AllHandsAndHearts.org, this wonderful, charitable organization that you have co-founded. You initially founded it, but having merged, you're now a co-founder and that's just a great story, too.
For Fools everywhere it's Give.Fool.com. That's the page you can go to on our website to make a donation. But I also want you to think -- and I hope you will think about that, because I'm going to do that myself, as well -- about volunteering. And David, as we close, if I raise my hand and say, "I want to go to the next place, wherever it is," what is that actual experience like?
Campbell: Well, it's different if you go domestic vs. international, and if people go again to the website AllHandsAndHearts.org, there's a volunteer button. You click that button and you can start to get information. You can look through that site as to what it's like on our project in Nepal, or Houston, or wherever.
We'll then start the process of looking at your dates and your skills, and assign you a bunk bed that you're going to move to. And you're going to live in a community of the nicest, most generous, most purpose-driven people in the world. You are going to work hard, starting early in the morning until late in the afternoon, six days a week, and have the most interesting conversations in the evening with people from all across the world that work together with you on accomplishing a result for someone else. And that's the most powerful and positive and wonderful evening you'll ever spend.
Gardner: And do I have that opportunity to say, "I have this much time." How does that work?
Campbell: You can identify one day and in places like Houston we'll actually have groups from companies come out just for the day. Then we have people on a project that will stay for three months. My objective was to eliminate barriers that prevented people from volunteering, so we're flexible with when you can come, and we're flexible with how long you can come.
Gardner: That's tremendous. So, a lot of ways for us all to give and help others, and that's kind of a lot about what this season is about. David Campbell, thank you so much for joining me on Rule Breaker Investing.
Campbell: Thanks so much, David! Enjoyed it.
As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at RBI.Fool.com.
David Gardner has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Verizon Communications. The Motley Fool owns shares of Medtronic. The Motley Fool has a disclosure policy.