John Michael and Timi Sobrato are passionate about animals, democracy, climate change and evaluating how to fund those areas through the lens of effective altruism.
They also have both the intention and the means to do more than most. They’re heirs to a vast real estate fortune — and signatories of the Giving Pledge.
John is one of three children of John A. and Susan Sobrato, as well as the former CEO of the family’s real estate business, which reached $10 billion in assets in 2019 and whose board he still chairs. The Bay Area clan’s wealth is estimated at close to $6 billion.
I recently had an hour-long conversation with John and Timi to learn about the family foundation’s new $23 million climate portfolio. But the conversation also touched on how the couple approach giving, their perspective on the Giving Pledge, the family’s burgeoning interest in affordable housing, and what John thinks is “ridiculous” about donor-advised funds.
Below are seven things to know about John and Timi Sobrato, along with some highlights from that discussion, edited for clarity.
They are effective altruists, mostly.
John: I wouldn’t say we’re staunch effective altruists, but we believe in that as an interesting way to sort of narrow down from all the possible things you might do to what could be most effective.
The Sobratos’ fortune is in real estate, but they have left tackling that sector’s emissions to the family business and focused their climate philanthropy elsewhere.
Timi: As we went through that process of figuring out the most effective place to give in climate, we did go to buildings first. [Rob Hollister, the president of real estate for the Sobrato Organization,] was already doing a lot of the work that could be done on the business side, which was amazing. It was like, “Let’s let him carry on there.” And we moved to other areas.
John: Yeah, we’re using more sustainable materials, we’re using green concrete. We’re going to be trading off some profitability in projects to demonstrate, as well as create markets for, the feasibility of some of these new materials. My final Bill Gates reference: The Green Premium is still very significant in a lot of construction building materials. You have to create markets for them to get the price down.
The family plans to leverage its philanthropic, investment and real estate power to help alleviate the Bay Area’s housing crisis.
John: There’s a lot of [family] energy around affordable housing. The integration [of these various approaches to housing] will probably first occur on a local project — like our philanthropy, start locally and figure it out — rather than a global one. We’re just in the early stages of investigating how we might work together. We might do some workforce housing, wraparound services or something of that nature locally. The housing shortage is one of the biggest problems in Silicon Valley. Not just the most underserved have to look elsewhere, but our whole middle class. I used to chair the board at Santa Clara University, and even our professors can’t afford to live here, let alone the service workers and everyone else it takes to run a university.
Their concern for animals led them to impact investing.
Timi: I’ve been an animal activist and environmentalist since grammar school. I’ve evolved over the years of chasing this or that. You have to pick something you think is going to be a cornerstone issue instead of just trying to fix little things that have gone beyond fixing, really. So we looked at factory farming and how animal agriculture, if done in an industrial way, causes so many problems: environmental degradation, climate change, air and water pollution, loss of biodiversity. It is crucial in declining public health: antibiotic resistance, viral outbreaks, food contamination, health problems, food insecurity. And then, of course, animal suffering — industrialized animal agriculture subjects tens of billions of thinking, feeling animals to lives of extreme confinement, emotional trauma, painful mutilations, inhumane slaughter. It’s an unsustainable model with such huge effects in so many areas, and it is also under-recognized. So it was a good place for us to focus and think, “Perhaps we can make a difference.”
John: In all the effective altruism screens, the animals always come out on top. It’s hardest to convince your friends, and maybe society, that with all the problems in the world, animals should be at the top of the list. But Timi was passionate about it. What really interested me was the intersectional nature of this issue, as Timi was saying. As we started to develop our theory of change, we saw that the percentage of vegans and vegetarians has been 5% to 10% forever. Even with greater awareness, it hasn’t changed much. It’s a pretty difficult commitment to make. Timi has done it, but I haven’t. So we started doing impact investing in the world of alternative protein.
Other Giving Pledge couples have informed their philanthropy.
John: Like most large groups, only 10% or 15%, maybe 20%, of the pledgers really have their act together. They’re heavily featured because that’s the whole idea: to learn from those who have made the journey and are generally considered very successful in their philanthropic endeavors. People like John and Laura Arnold, who I really admire. Sometimes they’re a little controversial—doing good work, you’re going to be controversial, depending on your perspective. They’re very strategic, very data-driven. Dustin Moskovitz and Cari Tuna are another young couple. They’re super-thoughtful. And, of course, the Gateses and many others.
They say the Giving Pledge is pushing for action amid criticism that most signatories are gaining wealth faster than they give it away.
Timi: They really advocate to give more now. It’s very much, “What are you waiting for? There are problems that need fixing and you can’t just wait. You must do, now.” And that’s been very influential for the family.
John: The Giving Pledge has moved in response to the criticism. They used to be pretty passive. Now, there’s definitely more of a push to do something. They do a lot more presentations of funding collaboratives that are shovel-ready: Blue Meridian, the Audacious Project. Collaboratives where the needs are identified, the staff is in place, the theory of change. All you need to do is write a check.
I don’t think it’s because people are not philanthropic. I think it’s because they are overwhelmed by the philanthropic choices and the complexities of the problems. It’s a lot of work. But that’s not an excuse. If you don’t want to give it away, or you can’t figure out how to give it away, then don’t put it in a foundation. Figure it out or don’t take a tax cut.
There’s no chance they will be establishing a perpetual foundation.
John: I don’t believe in perpetual foundations. You owe it to society. It needs to get out into the community, that’s why you got a tax deduction. There ought to be a 30-year spend-down, or some kind of spend-down. Yes, you want to be strategic, take your time and provide a long funding runway. But 30 years is a long time, as an example.
There’s no payoff requirement on a donor-advised fund. That is just ridiculous. And it’s 5% on a private foundation. It should be 10% or some number that would ensure it’s given out over a period of time you could plan for. I think the criticism is valid.