November 27, 2003 | Read Time: 14 minutes
Former eBay executive uses wealth to encourage activism
Growing up in Montreal in the 1970s, Jeffrey S. Skoll often daydreamed about becoming a writer who could
inspire people to solve the world’s social ills.
“The future seemed very tenuous, even from a kid’s perspective,” Mr. Skoll recalls. “It just seemed that the world was headed down a path of ever-escalating troubles for the environment, problems with wars, diseases, new and terrible weapons. It struck me that, if the world didn’t take notice of what was going on and just let these trends continue, by the time I was older and had kids, the world would not be a very great place to live in.”
But when the time came for Mr. Skoll to start his career, he opted instead for an engineering degree and an M.B.A., hoping that a stint in the business world would generate the means to allow him later to pursue his original dream.
That plan succeeded beyond his wildest imagining. The start-up business he chose in 1995 — the online auction company eBay — has grown into a financial giant with more than 75 million buyers and sellers worldwide. Mr. Skoll developed eBay’s business plan and was its first president, and he became rich when the company went public in 1998. Forbes magazine this year placed him 123rd on its list of the world’s wealthiest people, with a fortune of $2.8-billion, though recent estimates value his eBay stock as high as $3.6-billion.
Now, at age 38, having left his management job at eBay, Mr. Skoll has the freedom and the means to pursue his childhood dream — though not in quite the way he had imagined.
Rather than write about social problems himself, Mr. Skoll is devoting an increasing share of his considerable wealth to identifying scores of people with big ideas for changing the world and then helping them do it, in the hope that such positive actions may prove contagious. In the process, he is giving a major push to build and publicize a movement that has mostly occupied the margins of philanthropy.
A Growing Foundation
The Skoll Foundation, which Mr. Skoll founded in 1999, currently ranks among the 125 wealthiest foundations in the country, with assets of some $335-million — and is likely to grow much bigger once Mr. Skoll transfers the bulk of his fortune to it, as he says he intends to do.
So far it has given away $14.5-million, and this week was scheduled to announce its largest grant to date: $7.5-million to the University of Oxford’s Saïd Business School, in England, to teach M.B.A.’s how to become entrepreneurs for social change.
The foundation operates out of a small office in San Jose across the hall from the Community Foundation Silicon Valley, where it began life as one of the community foundation’s supporting organizations, with an initial endowment of $10-million. Its rapid growth over the past four years has led to several changes, including Mr. Skoll’s decision last year to create a separate private foundation, and his plans to move to a bigger office in Palo Alto next year.
“We’ve outgrown it strategically and we’ve outgrown it physically,” says Sally Osberg, the foundation’s president, noting that the current eight-member staff is likely to double in size next year. “It’s time to leave the nest and spread our wings.” Both foundations will continue to make grants, she says, but she notes that “the outside world will see it as one foundation.”
The foundation is infused with much of the energy and optimism that pervaded Silicon Valley before the high-technology boom went bust. In its brief life it has evolved to keep pace with Mr. Skoll’s changing views about the best way to accomplish his vision of helping to shrink the growing gap between the world’s poorest and most affluent citizens, which he thinks is at the root of many social problems.
Unlike many foundations, the Skoll Foundation focuses on no specific cause, like health, education, or economic development. “We think problems come in all shapes and sizes, and they’re usually connected to every other problem,” says Ms. Osberg, who previously directed the Children’s Discovery Museum of San Jose. “Poverty is connected to education, it’s connected to women, it’s connected to health, it’s connected to hunger, it’s connected to war and famine and pestilence.”
The foundation initially did make grants in several program areas, she observes, but it now focuses most of its efforts on identifying and promoting “social entrepreneurs.”
Although definitions vary, social entrepreneurs are usually seen as using entrepreneurial strategies in pursuit of social ends. Such people “go beyond the immediate problem to fundamentally change communities, societies, the world,” says William Drayton, who founded Ashoka in 1980 to find and assist such social reformers and visionaries around the world. They include, according to Ashoka, people like Susan B. Anthony, John Muir, Florence Nightingale, and Maria Montessori, as well as more contemporary examples like Ralph Nader, the consumer advocate, and Moham-med Yunus, a pioneer of the microcredit movement in Bangla-desh.
Mr. Drayton, who has been an adviser to Skoll as well as one of its grantees, has built a network of such people gradually over more than two decades. Now Mr. Skoll hopes to accelerate that process by helping the institutions that nurture social entrepreneurs to extend their reach.
The creation of the Skoll Center for Social Entrepreneurship at Oxford will offer another avenue for cultivating such leaders. Ms. Osberg says Skoll chose the Saïd Business School over American institutions because it has “the most international student body of any business school around the world.”
The gift will underwrite five scholarships a year for M.B.A. candidates studying how to apply entrepreneurial strategies to effect social change. The Skoll grant will also finance research projects, a lectureship, and an international forum on social entrepreneurship.
Long-Term Support
Unlike many grant makers, the Skoll Foundation seeks to build long-term relationships with its award recipients. It often expects to support organizations for an indefinite period, usually at least several years, and recognizes that grants to support specific projects are not always the best way to achieve results.
Jim Fruchterman, who founded Benetech, a charity that develops technology to help human-rights advocates and people with disabilities, says the Skoll Foundation initially rejected his group’s application for project support — but then offered it $50,000 for general operating support, the most difficult kind of money to raise.
“When someone like Skoll says, I’ll give you general support, that means we can prototype new ideas or do business planning, knowing that, when the riskier phase is done, it will be easier to find support from other foundations for the programs themselves,” says Mr. Fruchterman.
Reshaping Grant Making
Last month, the Skoll Foundation announced the realignment of its grant making, scrapping program areas like microfinance and creating three awards programs aimed at identifying, supporting, and celebrating the achievements of such social entrepreneurs and their organizations.
Through its Skoll Awards for Social Entrepreneurship, the foundation will give about 60 percent of its grant money to organizations in the middle to late stages of development.
The foundation hopes that the awards, to be selected through a nomination process that is still being refined, not only will draw public attention to their work but also may help them take it to a new level, perhaps spreading their concepts to other cities or countries.
About 25 percent of the grant money will be used to help build the capacity of organizations that serve the whole nonprofit sector, while the rest will go to groups working in Silicon Valley.
In seeking organizations to support, the foundation will look for groups that have demonstrated the value of their innovative approach and are ready to propagate it more widely.
Typical of the kind of organizations the Skoll Foundation hopes to support through its new awards program is the Manchester Craftsmen’s Guild, founded in Pittsburgh by William E. Strickland Jr. in 1969 to help inner-city youths focus their energies by learning pottery and photography.
The guild has since expanded to become a multidisciplinary center that uses the visual and performing arts to train and inspire young people and nonprofit executives alike.
After hearing Mr. Strickland talk about his work several years ago, Mr. Skoll approached him to discuss the possibility of creating similar centers in other cities.
“He said to me, ‘Bill, you remind me of eBay in the garage phase, when we couldn’t even get a bank loan,’” Mr. Strickland recalls. “‘But you’re scaleable, man! You’ve got the potential for being a national model.’”
Fueled by $1.7-million from Skoll, Mr. Strickland has spent the last several years helping to develop the Bayview Hunters Point Center for the Arts and Technology (known as Baycat) in San Francisco, with a mission similar to that of his own organization. And, again at the foundation’s urging, he is now developing a plan for creating similar centers in five more cities.
“As we look for permanent public financing, having 10 or 20 cities makes it a lot more powerful” than just one center in a single city, Mr. Strickland says. “You can also transfer good ideas from one city to another, so you’re not constantly having to reinvent the wheel.”
Sharing Ideas
Promoting such sharing of ideas is a key goal of the Skoll Foundation. One way it tries to accomplish this is through Social Edge, an online forum for and about social entrepreneurs that it started four months ago at http://www.socialedge.org.
“We saw a need for social entrepreneurs to get together in a way that was beneficial, but there was no forum for people working in different parts of the world,” says Mr. Skoll. “In the first week we were up, we were getting posts from people in Calcutta and Bangladesh and Australia and Singapore. And they weren’t just coming in for a post and leaving. They were very prolific. We still really haven’t done a public launch of this, yet we’ve already got a couple of thousand users.”
Among them are Mr. Skoll and Ms. Osberg, who are active participants in many of the discussions. And both are accessible for questions and comments from other people posting to the site.
Entertainment Business
Mr. Skoll’s commitment to celebrating the achievements of social entrepreneurs and inspiring the next generation has both a charitable and a commercial face.
The foundation has given $1.7-million to Oregon Public Broadcasting to produce a four-part television documentary called The New Heroes, describing the work of a dozen social entrepreneurs in eight countries. The show is expected to be ready for broadcast next year.
But so strong is Mr. Skoll’s belief in the power of stories that he has also started a business, Ovation Entertainment, to produce movies and television shows that highlight the work of social entrepreneurs, in the hope that audiences will be inspired to engage in similar efforts to improve their cities and neighborhoods.
Movies like Amistad, The Grapes of Wrath, Schindler’s List, To Kill a Mockingbird, or even a comedy like Trading Places can highlight troubling social conditions and show people trying to improve them, he says. But only a relative handful of the films produced in the past two decades carry that kind of social freight, he adds, and given the financial pressures on movie studios, such films are even less likely to be produced today.
“The studios can only do a certain number of films, and they can’t go to their boards of directors and say, ‘I’m going to do a story about some social entrepreneur in the rain forest.’ Because the board will go, ‘We can’t afford that. We need that spot for The Incredible Hulk, or Seabiscuit, or Scooby-Doo.‘”
That dynamic leaves a big niche that Mr. Skoll hopes Ovation can occupy. “It really struck me that this would be a good application of time and energy and resources to really try and make a difference in this equation, because nobody’s really doing it,” he says. “It turns out there are plenty of projects like Gandhi or Stand and Deliver that are on the shelves because they just can’t get out. And unless you can come in with a different mindset, and the vision and dedication and resources to actually push these things through the ecosystem, they’re not going to get done.”
Evolving Ideas
On the philanthropic front, Mr. Skoll and Ms. Osberg acknowledge that the foundation’s activities are likely to evolve further as they get feedback on how various programs are working and as new ideas bubble to the surface. But already the foundation is attracting favorable reviews for its creativity and nimbleness.
Mr. Drayton is confident that even as the Skoll Foundation grows, it can avoid the structural problems that create a mismatch between the needs of social entrepreneurs and the kinds of support typically offered by foundations.
Social entrepreneurs seek long-term support from foundations and other donors who can get as excited about their ideas as they are, he says, and who are unfazed if those ideas transcend traditional grant-making program areas and evolve significantly as they are tested against experience.
“This is a dynamic that’s utterly disrespectful of boundaries,” he says.
Yet foundations and government agencies do have boundaries — of grant size and duration, of project expectation, of program area — that tend to restrict their grant making to supporting what is predictable and fits into grant-making program areas. The result: “This madness, where social entrepreneurs have to spend 70 percent of our time running around getting little grants,” Mr. Drayton says. “The Skoll Foundation wants to have a different pattern.”
David Bornstein, author of a forthcoming book called How to Change the World: Social Entrepreneurs and the Power of New Ideas, which profiles activists in several countries, puts the problem slightly differently.
“One of the criticisms of a lot of traditional foundations is that, because they have money and power, they don’t always have to respond to the needs of the market,” he observes. “But the gut instinct of any entrepreneur is to look for leverage points, to think big, to constantly look for new opportunities, and to respond to the clients’ needs. That’s a very important set of skills and attitudes that the Skoll Foundation and others are bringing to the table.”
In the business world, entrepreneurs with good ideas and a bit of a track record can attract other investors by selling shares in the company, Mr. Bornstein notes. Even though social entrepreneurs may lack that option, he says, many of them are creating organizations to serve the public good.
“Increasingly, as people like Jeff Skoll support this career path, we’ll draw more talent into the field,” he predicts. “And society as a whole will greatly benefit.”
History: Created in 1999 by Jeffrey S. Skoll as a supporting organization of the Community Foundation Silicon Valley. Mr. Skoll, the first president of eBay, had also been instrumental in setting up the online auction company’s foundation. In October 2002, Mr. Skoll also created a private foundation to expand his philanthropy, which was outgrowing its initial home in the community foundation. Though the two Skoll funds are legally distinct and have separate boards, they share staff members and operate as a single entity.
Mission: To promote systemic change throughout the world by supporting “social entrepreneurs,” people who use entrepreneurial strategies to pursue social objectives. The foundation’s long-range goal is to promote “a world of peace and prosperity where all people, regardless of geography, background, or economic status, enjoy and employ the full range of their talents and abilities.”
Assets: About $335-million
Grants: About $6-million this year; next year’s grants are expected to total $13-million
Key officials: Jeffrey S. Skoll, founder and chairman; Sally Osberg, president and chief executive officer
Application procedures: Most Skoll awards go to organizations that have been nominated or invited to apply for support. Inquiries about its programs may be sent to grants@skollfoundation.org.
Address: 60 South Market Street, Suite 1000, San Jose, Calif. 95113; (408) 278-2200
World Wide Web site: http://www.skollfoundation.org
