Many of the new class of super-rich aren't waiting until retirement to start giving back. Instead, they're starting innovative programs that in essence become second careers. Ex-eBayer Skoll, 37, has developed a strategy not unlike the venture capitalist who funds an entrepreneur with a proven track record. Skoll seeks out the most promising social entrepreneurs in the world, nonprofit leaders who have already made a difference on a local or regional basis and need capital to take their idea to the next level. "We're trying to create long-term partnerships with these folks," says Skoll, No. 30 on BusinessWeek's list. "Our hope is to find real inflection points in their work where we can partner with them to make them more successful."
One recent example is a $300,000 grant to Martin Fisher, who created a nonprofit company in Kenya 10 years ago. It develops cheap technologies, from irrigation pumps to earth-digging equipment, and makes them available to poor farmers for as little as $18. Fisher's nonprofit has been so successful in transforming the lives of Kenyan workers that it is contributing 0.5% of Kenya's gross national product.
While Skoll systematically sifts the nonprofit world for high-impact initiatives, other new philanthropists are driven to projects by a searing personal experience. James E. Stowers Jr., founder of American Century Services Corp., an asset-management firm, has put an extraordinary $1.5 billion of his money--roughly three times his current net worth--toward the creation of a medical research center in Kansas City, Mo., to find a cure for cancer. It is no coincidence that he, his wife Virginia, and one of their daughters have all survived cancer. Bernie Marcus first became interested in helping mentally retarded children a decade ago when a Home Depot employee in Atlanta whose child suffered a brain injury had to seek help as far away as Boston. He has spent $70 million to create an institute in Atlanta to serve children with brain disorders--even recruiting a top scientist away from Johns Hopkins University to head the center.
In each case, these big-money philanthropists are placing bets on key ideas and becoming hands-on in their design and implementation. They have heeded Carnegie's celebrated call to employ in the service of their communities the same smarts and diligence that made them rich. Marcus, for one, hopes to give away the bulk of his fortune before he dies so he can oversee exactly where the money goes and how it is used. Just in case he dies before that, he has videotaped himself talking about his priorities and philosophy of giving, to be shown to future foundation trustees who never got to meet him.
By starting his giving early in life, Bill Gates believes he can make a more meaningful difference in eradicating disease in developing countries. If he had waited until his death to use his wealth to good purpose, it's likely that tens of thousands of poor children would have died prematurely because they wouldn't have had the benefit of a measles vaccine that costs only 25 cents. "Bill learned enough about the burden of infectious diseases to believe that his dollars are best used now," says Patty Stonesifer, a former Microsoft senior vice-president who is president of the Gates Foundation. "The cost of him being really smart about malaria at 45 vs. 65 was extremely worthwhile. The impact of this money over those 20 years could be great."
Gates is giving away about $1.2 billion a year through his foundation but is open to spending far beyond that sum annually. His major concern is effectiveness. "It's harder in philanthropy to know you did the right thing," says Stonesifer. "The reason there are big social inequities is because they come from deep, complex, historical pressures. There is no quick fix to these problems. Long-term solutions require thoughtful, committed programs to work." It is that and not an objection to distributing more that determines how much the foundation gives away, she says. "Bill would be excited if we brought him another billion-dollar idea or even a $5 billion idea."
Many other new philanthropists are finding that giving money away can be tough. Eli Broad started two successful companies: insurer SunAmerica Inc. and homebuilder Kaufman & Broad Home, now KB Home. Yet "I'm working harder at this than when I was CEO of SunAmerica," he says.
Copyright 2002, Bloomberg L.P.
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