For Impact


Omidyar’s ‘Hybrid Model’ For Impact

For Impact Ideas | | Tom Suddes

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.”