After becoming one of the richest 31-year-olds in history, eBay founder
Pierre Omidyar cleared out his cubicle, sold his modest home, and set off for
his native Paris with his wife, Pam. It was a change born partly of the Omidyars'
need to escape Silicon Valley's bubble frenzy of 1999, when they got mobbed at
cocktail parties and endlessly hit on by business-plan-pushing MBAs. But the
Paris chapter also stemmed from a deeper dilemma. From the moment Omidyar became
rich, it was apparent to his friends that he was overwhelmingly uncomfortable-embarrassed
even-by the money. "Don't make it grow," the accidental
billionaire once told an investment adviser, so fearful was he of the burden of
his multiplying commas.
In Paris, the Minitel-entranced French didn't care much about the Web or
the e-commerce mogul. So Omidyar had the time and space to sip black tea at
smoky cafés and ponder his next big question. What does a ridiculously rich man
with so little interest in money do? Solving the first part of the problem was
easy: the Omidyars had already vowed to give away virtually all their wealth.
The next part was harder: how to spend their billions and have an impact as
immense as eBay's.
Total StrangersÂ
Just as his vision of the perfect marketplace revolutionized commerce, so
too are Omidyar's ideas about philanthropy likely to disrupt the rules of
traditional giving. Omidyar is at the forefront of a new trend that is starting
to blur the old church-state divisions between the for-profit and non-profit
worlds, creating structural shifts that could lead to a new, hybrid
philanthropy. In March, he shocked the philanthropic community with news that
instead of investing purely in nonprofits, the Omidyar Network would house both
a foundation and an arm that would also invest in for-profit companies. All the
money made from the stakes in those companies-chosen by Omidyar and his team
of due-diligence specialists for their emphasis on open information, giving
power to the little guy, and fostering social capital-would flow back into the
investing arm to leverage into yet more charitable giving. "I don't see
why we ought to make an artificial distinction that says for-profit is all about
making money and only nonprofit is about helping people," says Omidyar in
an interview in the library of the network's offices, which sit amid the
thrift shops and antique stores in blue-collar Redwood City, Calif.
|
What influenced Omidyar most in this decision was the inspiration he took
from watching eBay users learn to trust 125 million total strangers. Disabled
people on public assistance turned into self-supporting entrepreneurs;
Guatemalan villagers started selling their handwoven wares to people on Park
Avenue. Says Omidyar: "You have to ask yourself, is it really true that
business can only be about making money? And is it really true that if you want
good things to happen in a community it has to be through a nonprofit?"
That's not the only radical move Omidyar is making. In many ways, Omidyar
is the anomaly among BusinessWeek's Top 50 givers. Philanthropists like Bill
Gates, Gordon Moore, and Michael Dell went beyond old-school giving, where you
give your money to a foundation, which then doles it out for you. Instead, the
new superphilanthropists applied the same brilliance that built their businesses
to their philanthropic causes.
Omidyar is pioneering a third way, a philanthropy that's fanatically
bottom-up. It's anti-vision. Anti-dictate. And, in a sense, Omidyar isn't
even choosing how his $10 bn is given away-or to what causes it goes. He wants
you to do that. How? For starters, there's omidyar.net, where Pierre and Pam
recently opened up a conversation with the world to discuss the direction of
their philanthropy.
Secondly, the foundation arm of the Omidyar Network, which still hands out
the vast bulk of the money, focuses on grants to individuals who are already
creating social change through their nonprofits. The critical tool of these
mostly smallish groups is the Internet, which enables people to take tiny ideas
and give them a global launch, in much the same way Omidyar created what fans
call the "first truly democratic marketplace" after selling, among
other things, his broken laser pointer online. (It went for 14 bucks.)
|
Rather than dictating bold prescriptions, then, the nonprofits Omidyar funds
flank problems, attacking them from the sides. Consider the story of the
toilets. Two years ago, Whittle's Global Giving designed a site that allowed
anyone, from anywhere in the world who was properly screened and vetted, to post
projects for funding. One such group was a slew of schoolteachers in Coimbatore,
India. Every year, they watched scores of girls leave school when they hit
puberty. And they had a sneaking suspicion as to why.
ONE SIMPLE FIX
The teachers posted a small, bedraggled project on Global Giving -- so tiny,
in fact, that it initially embarrassed Whittle, who had quit his job as a lead
economist at the World Bank to start the nonprofit. The project ad read:
"New Toilet Block for School. $5,000." Within a few weeks, four donors
from around the U.S., including a writer from New York City and a banker from
J.P. Morgan, put up the money. In less than three months, the school had its own
separate toilet block for girls; the donors had thank-you letters and photos
from the kids. Turns out the teachers had guessed right: The girls were dropping
out in droves because of the embarrassment they felt once they started
menstruating and had no private facilities. Now, two years later, 100 of them
have stayed in school because of this tiny addition. Within 10 years, Global
Giving estimates that 440 will have stayed through graduation. And the ripple
effect from this one simple fix is huge, given the fact that attaining an
education makes it much more likely some of these girls will eventually climb
out of poverty.
With conventional giving, whether it be to the Red Cross, United Way, or
small local charities -- once you write your check, you're often clueless as to
any particular outcome achieved. What's unique about Omidyar's projects is that,
like eBay, there's often a transparent system in place that allows donors to
monitor where their money goes and who receives it.
By Michelle Conlin With Rob Hof in Redwood City, CalifÂ
In BusinessWeek. Copyright 2004 by The McGraw-Hill Companies, Inc