I just read a great article in HARVARD BUSINESS REVIEW this morning by eBay’s Founder, Pierre Omidyar on “Innovating the Business Model of Social Change”.
It HBR’s words:
“The Idea: Omidyar was inspired by eBay’s social impact (!) to create a hybrid model for his philanthropic Omidyar Network: a combination of nonprofit and for-profit.”
WOW. Take a moment and read the article. Filled with all kinds of great nuggets including:
- • “Many people don’t distinguish between charity and philanthropy, but to me there’s a significant difference.”
- *Omidyar says that “Philanthropy is much more. It comes from the Latin for ‘love of humanity’.” I think the Greek meaning for philanthropy is ‘friend of mankind’. Same thing. He goes on to say that “Philanthropy is a desire to improve the state of humanity and the world. It requires thinking about the root causes of issues.”
- • “I began looking for ways to harness the incredible power of business in order to make the world better.”
- • He talks a lot about the challenge to structure his organization properly since it was funding both nonprofits and for-profits.
- • “Today there’s a name for people who make investments that can produce
both impact (!) and profit: IMPACT INVESTORS (my bold caps).”
- • He talks a lot about their focus on microfinance and allowing the “poorest of the poor to start enterprises and take advantage of educational opportunities”. (He acknowledges that microfinance has come under a lot of scrutiny but also talks about all the ‘good’ that microfinance has accomplished.)
- • “In the past few years we’ve learned that to have the biggest impact (!), you need the right capital structure and the right leaders.”
- • Finally, here’s his ‘close’: “One of the biggest things I’ve learned in more than a decade of this work is that you really can make the world better in any sector—in nonprofits, in business, or in government.
- It’s not a question of one sector’s struggling against another, or of ‘giving back’ versus ‘taking away.’ That’s old thinking.
- A true philanthropist will use every tool he can to make an IMPACT (again my bold caps). Today business is a key part of the equation, and the sectors are learning to work together.”