Executive Times
		2007 Book Reviews
		Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich by Robert Frank
Rating:			***
		(Recommended)
		Click on title or picture to buy from amazon.com
	Boom The Wall Street Journal’s “On Wealth” columnist, Robert Frank, has structured what he’s learned in that role into a book titled, Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich. He segments the rich into levels, and describes the way rich people live in each of these groups. Beyond conspicuous consumption and “Lifestyles of the Rich and Famous,” Frank explores the challenges and opportunities that the new rich in America are facing. Whether you’re in this group, aspire to it, or find the behavior there vulgar, you’ll find something on the pages of Richistan to make you laugh or cry, and the eye-opening experience will lead to thinking about wealth in some new ways. Here’s an excerpt, from the beginning of Chapter 8, “Performance Philanthrophy: Giving for Results,” pp. 157-161: Philip Berber loves picking fights with the status quo. A Jewish Irishman who now lives in Texas, Berber has spent most of his 45-year life dreaming up technology companies that disrupt the establishment. In the mid1990s, he created CyBerCorp, an online trading system that allowed individual investors to buy and sell stocks directly from their home computers. The premise was revolutionary—to bypass brokers like Merrill Lynch and usher in a new era of do-it-yourself (and lose-it-yourself) investing. When the Internet took off, so did CyBerCorp, allowing Berber to sell the business to Charles Schwab Corp. in 2000 for more than $450 million. “For a Jewish kid from Dublin, that was more money than I ever imagined,” he says, in his Southern-fried brogue. Now, from a makeshift office in suburban Austin, Berber is launching a new venture that could be even more revolutionary. Dressed in his dot-commer uniform of khakis and polo shirt, Berber dashes around his conference room outlining his business plan. His new company, he explains, is akin to a venture-capital fund, investing in start-ups and entrepreneurs. Like CyBerCorp, it bypasses an entire industry of financial middlemen to deliver services more efficiently. He talks about his returns on investment, his quantitative analyses and rigorous project management. He fills a notepad with dozens of flowcharts, X-Y graphs and maps of his market area. He goes on a tirade about his competitors, who he says are “wasteful” and “arrogant.” “What I’m doing is very akin to the Dell (computer) model,” he says. “It’s a direct delivery of a product.” The only difference is that Berber’s business doesn’t make a product. It doesn’t have a sales department, or advertising, or growth targets, and it doesn’t make any money. His company, in fact, is in the business of giving away money. It’s called A Glimmer of Hope, and it’s Berber’s personal charity. So far he’s given Glimmer $100 million, or about half his total fortune. And in the process, he’s helping to create a new kind of entrepreneurial charity. Berber insists he’s not “giving away” his money. He hates black-tie balls and the social climbing that poses as charity in places like Palm Beach. He shuns awards and would never think of writing a check to a big institution like the Red Cross, which he says wastes donor money on staff, marketing and useless reports. Instead, Berber calls himself a “social entrepreneur.” An impatient man, with a cleanly shaved head, a runner’s physique and a lightning-fast mind, Berber has decided to run his charity more like a tech start-up. He’s not in the business of donating money; he’s in the business of investing in social change, demanding concrete results and searching for dot-corn-style efficiencies. “I’m not giving anything to anybody,” he says. “There is no charity with me. I’m a social investor investing capital for social profits.” Berber’s plan to save the world through return-on-asset models would be ambitious by any standard. Yet he’s taken his experiment one step further. He’s decided to apply his social-investor theories to one of the most complex and intractable social problems in the world—poverty in Ethiopia. So far, Berber is posting impressive results. Since 2001 Glimmer has spent more than $16 million in Ethiopia. It’s built 1,657 water wells, bringing clean water to more than 886,000 people. It’s built 190 schools, educating more than 112,000 students. It’s created 99 health clinics, serving 766,000 people, and launched 24 vet clinics for farm animals, benefiting 162,000 people. He’s even prouder of his efficiency. Berber’s projects in Ethiopia, he says, sometimes cost half as much as similar projects run by the big aid groups. He can deliver water, for instance, for $5.74 per person, or health care for $4.01 per person. “This isn’t rocket science,” says Berber, who has actually worked in rocket science. “There is no magic to what we’re doing. This is applying fundamental lessons I learned as a business entrepreneur and reapplying it as a social entrepreneur. This is a blueprint and it is wholly applicable to whatever philanthropic cause touches anybody’s heart. I only wish more people would try it.” He’s already winning converts. Computer billionaire and fellow Texan Michael Dell has donated $500,000 to Glimmer, and Silicon Labs founder Dave Welland has also donated several hundred thousand, even though Berber isn’t seeking outside money. In the summer of 2006, Sir Richard Branson summoned Berber to his private island in the Caribbean to seek his advice (along with other global political leaders and business chiefs) on addressing social and environmental issues around the world. “We wanted to have him there to tap into his unique experience in using business principles to approach social issues in order to drive sustainable results,” said a Branson spokeswoman. Berber has also made Ethiopia something of a family crusade. Every summer, instead of heading to the beach, he packs up his wife and three kids and flies to the Ethiopian outback for several weeks to learn more about the lives and needs of the locals. During a trip in the summer of 2006, the Berbers were greeted like kings in the Ethiopian villages, with thousands of locals surrounding their jeep and holding up signs that read “Thank You Berber!” Yet while Berber may be getting accolades from Ethiopians and fellow philanthropists, he’s proving less popular with the big nonprofits. In fact, he’s become their worst nightmare. Through Glimmer, Berber is showing that the wealthy don’t need to give money to the United Way, Red Cross, CARE and the rest of the charity establishment. Just as CyBerCorp bypassed the big brokers, Glimmer is proving that today’s Richistanis don’t need big nonprofits to carry out their good works. The big NGOs, Berber says, are headed toward extinction unless they change their wasteful ways. “Most NGOs, if they were private companies, would be in bankruptcy,” Berber says. “In our lifetime, we’re going to see the winds of change and we’re going to see donors become more educated about directing their dollars. If anyone knew that some of these charities only spend 19 cents of every dollar on the people they claim to be helping, they would be shocked.” For their part, the charities say Berber is a misguided neophyte who should just stick to software. “I have no idea how he could arrive at the conclusion that he would better understand the problems of Ethiopia than our organization,” says Adam Hicks, a spokesman for CARE. “You have to understand the world context in which Ethiopia exists, to understand deeply the food issues and exporting world. We have people who make it their life study to understand these issues. You can’t just go into Ethiopia and say, ‘I know everything there is to know about Ethiopia.” He adds, “CARE staffers are highly trained in what they do. They are agronomists and doctors and engineers. They are more than well-intentioned do-gooders.” Charities like CARE, however, had better get used to people like Phil Berber. Frank’s writing style lends itself easily to information and entertainment, and there’s plenty of both for readers of Richistan. Steve Hopkins, August 25, 2007
Buy Richistan @ amazon.com				Go To Hopkins & Company Homepage
Go to 2007 Book Shelf				Go to Executive Times Archives
Go to The Big Book Shelf: All Reviews
	2007 Hopkins and Company, LLC The recommendation rating for this book appeared in the September 2007 issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/Richistan.htm For Reprint Permission, Contact: Hopkins & Company, LLC • 723 North Kenilworth Avenue • Oak Park, IL 60302 Phone: 708-466-4650 • Fax: 708-386-8687 E-mail: books@hopkinsandcompany.com www.hopkinsandcompany.com