Wednesday, June 6, 2012

Monish Pabrai - Turning Slumdogs Into Millionaires

Believe it or not, Wall Streeters and other investment professionals can be a generous bunch when it comes to charitable giving. Taking a lead from Warren Buffett, Wall Streeters give away billions annually.
Checkbook philanthropy has its limits, however, especially when it comes to its effectiveness in producing mea­sur­able return on investment—something the investing crowd demands in their professional life but ignores when they give to charity.
Mohnish Pabrai, founder of $500 million Pabrai Investment Funds, wasn’t having any of it.
“The problem most nonprofits have is that they are run by romantics who are great to hang out with, but they have no clue,’’ says Pabrai. “I wanted a strong dose of head in ­addition to heart and a focus on how to actually get some decent returns.” His own review of charities, he adds, found inefficient fundraising, high overhead and a lack of ­measurable results were the norm. “I wanted to make the greatest difference in the greatest number of lives in the most ­efficient manner possible.”
For Pabrai, 48, who moved to the U.S. in 1983 to attend South Carolina’sClemson University, the question of where to give was a no-brainer. He and his wife would focus their philanthropic efforts in their native India.
Growing up in New Delhi and Mumbai, Pabrai was surrounded by both extreme poverty and wealth. He remembers looking out of the classroom window from the high-rise building that housed his elite private school and seeing and smelling a massive slum with its open sewage system and poor occupants.

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