How did French-born Pierre Omidyar, founder of eBay, uneasy with sudden wealth, decide to become a high-profile champion of microfinance's role in social entrepreneurship?
Omidyar (pronounced "oh-MID-ee-ar") says that the more than 700,000 eBay users who now support themselves part time or full time as online merchants are a prime example of "economic self-empowerment."
About 18 months ago, after learning about microfinance, the Omidyars revamped their philanthropic operation, the Omidyar Network, to invest in for-profit ventures alongside traditional grants to non-profit groups.
The Omidyars have not abandoned traditional philanthropy — giving to charities such as the Red Cross. "I just think the largest potential is in thinking about business as having a social impact," he says.
Housed in Silicon Valley's Redwood City, the Omidyar Network has $400 million in assets and 37 full-time staffers. Before Friday's announcement, it had plowed $15 million into microfinance ventures, including Grameen.
[Grameen was launched about 30 years ago in rural Bangladesh by an economics professor. It now has 3.7 million borrowers, virtually all women. Repayment rates are 95% to 98%, says Grameen Foundation USA, the bank's U.S. affiliate.]
Omidyar figured microfinance needed a big push to prove its profitability and attract really big bucks from Wall Street. "In order to get a large-scale global effort, you need a lot of capital," he says. In other words, "microcredit needs IPO-level capital to demonstrate its true potential as a business," says David Bornstein, author of How to Change the World: Social Entrepreneurs and the Power of New Ideas.
And that, of course, is Omidyar's aim with his $100 million gift.
"Who says philanthropy has a monopoly on making the world a better place?" he says. "There are lots and lots of businesses that make the world a better place by their very existence."
Now, with Friday's announcement, he hopes to prove it.
[Excerpted from an article by Jim Hopkins, USA TODAY]
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