Semuels: There are some things in which government is not effective. Does that mean we should trust government less to do things and ask philanthropists and private businesses to step in more?
Hoffman: I think that’s a bit of a false dichotomy. I think the answer is both: Help government improve and do private philanthropy. Should we say that we are helping police do their job better so we shouldn’t have a neighborhood crime watch? It’s not an either/or kind of thing.
I do think there are some irreducible inefficiencies in government. But we still need to have government, we still need to make government effective if we can. In the Code for America case, private philanthropy helps amplify government effectiveness.
Semuels: So Code for America is a way you are using philanthropy to improve government.
Hoffman: Yes. For example, the government spends like $470 billion on safety-net functions. Philanthropy, on parallel, spends $42 billion. So the government is at a much larger vector of how many resources are put to work on the safety net. What Code for America says is, we can direct some of the philanthropic money to build interesting pieces of technology. Doing things that a nimble, small group of engineers can then add into that government process and make it that much more effective. It’s a democratically selected thing, democratic politicians, but then we’re using this kind of philanthropy to help make that much more effective.
For example, through Prop 47 in California, 8.4 million people could clear their records, which helps with getting jobs, renting places, making them economically much-better integrated through opportunity. Code for America made that easier to do.
Semuels: Prop 47 was supported by a lot of philanthropic funding. Why should we trust philanthropists to fund propositions that are in the best interest of everybody?
Hoffman: I think life has a lot of grays. One of the things that happens that’s challenging within the democratic process is that people say, “Look at this failure, so we should totally change this whole thing.” And then you add in tons of bureaucratic process, and checks and balances, and all of a sudden it doesn’t work that well. Broadly speaking, I think you have to allow for some error. It’s good public policy to say, broadly speaking, the portfolio of outcomes is very good, and there’s occasionally an error and we try to tune against it.
As I recall, I think it was the Robert Wood [Johnson] Foundation that helped set up 9-1-1. It’s really good we have a 9-1-1 system.
Semuels: Like many philanthropists in the tech world, you’ve said you wanted to spend your money in your lifetime. Why is that a priority?
Hoffman: I believe I’m pretty good at this kind of capital allocation for massive-scale results in entrepreneurship, in technology, in backing projects and people. I think I have a good track record, both in commercial investing and in philanthropic investing. I don’t have any interest in creating a named foundation, I have an interest in really good impact for capital. I think I’m pretty good at doing it, so I’m going to apply myself to doing it in my lifetime.