Meet the venture capitalist who launched a kickstarter for war

Meet the venture capitalist who launched a kickstarter for war

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It was December in northern Syria and the temperature was dropping fast. Local militias fighting the Islamic State had suffered heavy casualties after a tough battle, and U.S. special operations forces urgently needed to get blankets to their partners. They turned to a small charity run by Jim Hake, a former venture capitalist who made his fortune on tech startups in California.

Within eight hours, 200 blankets had arrived for the wounded Syrian fighters, paid for by Hake’s non-profit organization, Spirit of America.

A government agency would have been hard pressed to respond so quickly on short notice. And that’s why some top U.S. generals and lawmakers believe Hake’s organization has found a promising new way of delivering foreign aid, by avoiding cumbersome bureaucracy or government contracts.

And Hake argues, if extremists are relying on private donations to launch terrorist attacks, why can’t private citizens in America donate money to help U.S. forces fighting them? “To prevail, we need all elements of national power — private and public,” Hake said.

But the approach — which relies on the advice of U.S. troops on the ground — reflects the increasingly blurred lines between aid work and military operations. And skeptics say the mingling of aid, private charities and Western military missions could carry potentially damaging consequences for civilians and aid workers alike.

Sean McFate, a former U.S. Army officer who has written about the role of private security firms, said he worries about the precedent of introducing private money tied to wealthy entrepreneurs in a warzone, and that imitators of Spirit of America could have financial or political agendas at odds with U.S. interests.

“There are a lot of unintended consequences that can come from what are benevolent intentions,” McFate said. “Someone else comes along and imitates that [model], and their intentions are not pure, and it becomes a slippery slope.”

Hake’s organization represents a challenge to the traditional model for humanitarian aid, at a time when U.S. aid efforts are under unprecedented scrutiny from Donald Trump’s White House. The group shuns government funding in favor of private donations, and explicitly seeks to support American military missions instead of identifying itself as a “neutral” humanitarian actor.

Although his unconventional approach might rankle some well-established aid organizations, Hake’s entrepreneurial model could be ideally suited to the political moment.

The Trump administration has a skeptical view of conventional foreign aid and is proposing drastic cuts to international assistance. The White House also has put a premium on applying expertise from the private sector to every aspect of the federal government, and shown a clear preference for assistance tied to national security objectives over humanitarian goals.

Spirit of America seems to fit the bill for the new administration’s mindset, as it offers to provide international assistance quickly without demanding a penny from the federal budget. And Spirit of America has backing from some heavy hitters at the Pentagon, which has emerged as the dominant force in Trump’s cabinet. Defense Secretary James Mattis was an early supporter of the group’s work, as well as the chairman of the Joint Chiefs, Gen. Joseph Dunford.

“It’s natural to say — how we can harness that entrepreneurial energy? I think there is a sincere interest in that in the new administration, and the new leaders in the Department of Defense,” Hake told Foreign Policy.

With a tiny staff of mostly retired American troops, Spirit of America relies on private donations to support U.S. military and diplomatic missions around the world, from the Middle East to Africa to Central America. Its projects include conventional humanitarian aid, like beds for a hospital in Tajikistan. But more often, the programs fit the definition of “security assistance” — providing non-lethal gear and support for local forces backed by U.S. troops. Spirit of America has funded mine-clearing gear for Kurdish Peshmerga fighters in northern Iraq and first-aid kits for local soldiers in Niger. Hake said the group’s venture capital approach — fast, flexible and small scale — means it can move with more agility than a government agency or a contractor.

It’s unclear if the organization represents a trend, though it coincides with growing calls in Washington to bring private sector know-how to aid projects. But Spirit of America is venturing into unchartered legal territory, raising fresh questions about the relationship between foreign assistance and the military.

Hake and his colleagues are quick to point out that they are not contractors and do not seek U.S. funding, their projects are always approved by ambassadors or commanders, and that they have gotten consistently positive reviews from the field.

Stanley McChrystal, the former commander of U.S. forces in Afghanistan who serves on the board of advisors for the organization, said Spirit of America has taken pains to ensure every project is carried out with “great rigor,” and adheres to ethical and legal standards.

“To my knowledge, every case goes through Americans on the ground, their parent organization has gotten approval and approved this relationship,” McChrystal told FP. “This is not funneling arms to the Contras. It’s very above board.”

The group has faced legal hurdles over the years, as the U.S. military forbids troops from soliciting gifts. In 2010, the Pentagon and U.S. Central Command — then headed by Gen. Mattis — weighed in to clear the way for Spirit of America projects, permitting the charity to deliver aid if it met needs “identified” by U.S. commanders.

Still, the group often has to explain its work to military attorneys. As a result, several members of Congress have drafted legislation that would clarify the rules for non-profits working with the U.S. military. The proposed language, contained in this year’s National Defense Authorization Act, would require the charities to be based in the United States and registered with the U.S. Agency for International Development.

Republican Sen. Tom Cotton of Arkansas, an Army veteran who served in Iraq and Afghanistan, has endorsed the new legislation.

“If there are civilians who can help our troops, then of course we should welcome their assistance,” Cotton said in an email. “It will save money and, more importantly, save lives. This legislation is a win-win.”

With a 12-member staff and a modest budget of about $3 million raised from private donors, Spirit of America doesn’t seek out large-scale aid projects that major NGOs handle under Western government contracts. Instead, it sees itself as filling an unmet need similar to “angel investors” in the startup economy, betting on new ideas and experimental initiatives.

Underlying the group’s work is the premise that providing assistance to civilian populations or local militias can help counter the threat posed by Islamist extremists. Although the U.S. military embraces the idea, scholars and development experts disagree as to whether aid money can undercut militant violence and stem the recruitment of volunteers by extremist groups.

At the height of the U.S. military’s involvement in Afghanistan and Iraq, American officers had large sums of cash at their disposal to provide aid projects that they deemed crucial to their counterinsurgency mission. The program, the Commander’s Emergency Response Program, was the brainchild of the former commander in Iraq, Gen. David Petraeus. The program came in for heavy criticism, as some of the money was never accounted for, and experts now question if the haphazard and costly approach really won over “hearts and minds.”

Spirit of America’s work bears some resemblance to the military program, but the organization says its projects are much smaller and go through more rigorous vetting — often with the approval of a U.S. ambassador or senior diplomat.

When the State Department wanted to provide hundreds of hand-cranked radios to civilians in northern Syria in 2014 to give them access to news from an opposition station, Spirit of America was able to deliver the radios within weeks, a task that would have taken a government agency or contractor months.

“They were not reckless, but they were fast,” said John Jaeger, who worked for the State Department on the project. “As someone who constantly struggled against the bridles of bureaucracy, it was really helpful to actually get assistance on the ground.”

Like Petraeus’ aid projects, the group’s work is built on the notion that delivering equipment or humanitarian relief can help win over local populations, and keep violent extremists at bay.

William Easterly, a professor of economics at New York University, argues that there is no conclusive evidence proving aid can reduce extremist violence or undercut the appeal of militant ideology. Moreover, tying aid projects so closely to armed forces sends the wrong message to civilians that need humanitarian help, and can endanger aid workers who are then associated with soldiers, he said. “Military force is about coercion and shouldn’t play any part in aid,” he said.

Veteran aid workers say the key to countering extremism is less about plastic sheeting for blown out windows or restoring electricity and more about ensuring a local government has the trust and confidence of its citizens.

“Surging in the aid on its own is not going to get you what you need,“ said Jeremy Konyndyk, a former senior official at USAID and now at the Center for Global Development. “People need aid, but more importantly, they need to believe that there is a legitimate governing authority.”

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