May 4, 2000 | Read Time: 2 minutes
Pierre Omidyar, who started the online auction site eBay, is pouring his money into philanthropy — but not before trying to reinvent it, says Forbes magazine (May 1).
Mr. Omidyar and his wife, Pamela, are trying to use the principles of venture capitalism to “demolish” traditional models of grant making in favor of new ones that produce greater accountability in the way charitable dollars are distributed and spent, the magazine says.
“Like a venture-capital firm, they are seeding a number of small causes in a style that has come to be called venture philanthropy,” Forbes says. “The Omidyars will give more money to charities that follow solid business plans and meet the Omidyars’ benchmarks, such as creating earnings streams that sustain the non-profit work. Then their Darwinian, unsentimental aim is to drop the flops and expand the successes, forming national organizations.”
The Omidyars also are trying to build a network of so-called social entrepreneurs, people “who share their uneasiness over how few problems are solved by traditional philanthropy,” the magazine says.
Forbes says that the Omidyar Foundation plans to “start small, dispensing $20-million this year and ending the year with assets of $100-million.” The magazine describes the Omidyars’ agenda as “somewhat evanescent: They hope to rebuild a sense of community in America. They see the phenomena of kids killing kids, hunger among plenty, elderly living alone, and families breaking down.”
The Omidyar Foundation is not alone in trying the venture philanthropy approach, Forbes notes. But whether the idea will work better in the long run than traditional philanthropy remains an open question. “There is no assurance” that the efforts of Mr. Omidyar “will reap any greater good than the old guard,” says Forbes.
The article is available on the magazine’s Web site at http://www.forbes.com.
