‘Inc.’: the Economy and Venture Philanthropy

The Entrepreneurs’ Foundation, an effort to encourage philanthropy at companies in the start-up stage, is running into some obstacles in its own development, says Inc. magazine (April).

The fund was started in 1998 by Gib Myers, a Silicon Valley venture capitalist. It has thus far persuaded 73 companies to donate equity and volunteer time to the foundation, which selects charities to support. The Entrepreneurs’ Foundation takes the so-called venture-philanthropy approach, typically supporting efforts to improve the management and operations of a nonprofit group, not specific projects. Volunteers from the companies that support the Entrepreneurs’ Foundation also provide expertise to the grantees.

The problem for the foundation, however, is that the high-technology companies that were expected to sustain the foundation are facing financial problems of their own. “As the market turmoil that began in April 2000 dragged on toward year’s end, many entrepreneurs politely stalled when asked to donate the stock and time that E.F. requires,” the magazine says. “Even among some of the companies that have signed up, the dramatic downturn in tech stocks has drained some energy from volunteer work.”

Nevertheless, Mr. Myers is still optimistic that the foundation can reach its goal of attracting a total of 500 companies as members by 2006. Though he started off by focusing on Silicon Valley, he now is taking his idea to other parts of the country. He says affiliates of the foundation will soon open in Atlanta, Austin, Dallas, and a New England city.

The article is available at http://www.incmagazine.com.