More than just about any other philanthropists, Pierre and Pam Omidyar have blurred the lines between their non-profit giving, and their for-profit investments, which can make it even more difficult to assess their giving than it otherwise would be. Becoming billionaires when eBay went public in 1998, the Omidyars quickly developed an interest in philanthropy, and in 2001, Pierre publicly stated his intention of giving away most of his fortune in his lifetime.
So how are the Omidyars doing so far? They have now donated well over $1 billion to a wide range of causes, but with an estimated net worth of between $8 and $9 billion, still have a long way to go.
This may explain why they've stepped up their level of giving over the last several years, making $225 million in charitable contributions in 2013 alone, good enough to rank them No. 7 on the Chronicle of Philanthropy’s list of the year’s top donors, but only No. 9 on our list of the most generous tech philanthropists.
So how does all that money get distributed? It's complicated.
The first thing to know is that the Omidyars have kept the vast bulk of their fortune under their private control, as opposed to endowing a giant foundation. Pierre is still deeply involved in eBay as its board chair and owns over 100 million shares of its stock. He has strong incentives to keep that stock under his control, especially with sharks like Carl Icahn out there. (Icahn recently took a stake in eBay and starting making trouble.) In short, Pierre is no Jeff Skoll, who long ago cashed out of eBay to turn full time to social change, though the long-time friends do share similar sentiments about philanthrocapitalism and social entrepreneurship.
Unlike the many major philanthropists who funnel their money through a single family foundation, the Omidyars have actually developed three major charitable organizations: the Omidyar Network Fund, HopeLabs, and Humanity United, to say nothing of the major personal contributions they've made directly to a number of other organizations. We're dealing with an archipelago here, not a solid land mass, and the overarching entity is The Omidyar Group, which also makes for-profit investments at a rate roughly equal to the Omidyars' charitable giving, mostly to organizations they see as being commercially viable, and also providing some sort of social benefit.
Because the Omidyars haven't endowed their foundations with any sizeable chunk of their vast fortune, they frequently replenish their foundations' coffers, creating a sort of pay-as-you-go operation. In business terms, it makes sense for them, though it leaves their giving suceptible to wild swings if eBay's stock does really well, or really poorly.
With approximately $273 million in assets at the end of 2012, the Omidyars’ main philanthropic vehicle, the Omidyar Network Fund, is the one entity in the mix with a sizeable endowment. That may seem large, but it actually turns out to be relatively small when you compare it to the amounts given by someone like Jeff Skoll, who is less than half as wealthy, but whose foundation has an endowment of around $500 million.
The size of the Omidyar Nework Fund endowment, however, doesn't dictate funding levels. The foundation gives out at least $20 million in grants every year, although in the last few years that number has started to surpass $40 million. They typically make medium-to-large grants to about 100 different organizations in amounts ranging from tens to hundred of thousands of dollars, and focus on diverse causes such as independent media, public policy, entrepreneurship microfinancing, health, and education. Additionally, they run a matching gifts program for their employees, which gives amounts ranging from 50 or 100 dollars to a few thousand to another 150 or so organizations (we like that touch).
Humanity United, a foundation which was established after the Omidyar Network, works on many of the same issues as the Omidyar Network Fund, though it is focused exclusively on international efforts, with more emphasis on human rights, including peace building, pro-democracy movements, and organizations that fight slavery and human trafficking. Humanity United has been averaging between $18 and $25 million in grantmaking per year, including several million to organizations outside the United States. Humanity United does not keep significant assets on its balance sheet, meaning that it gets replenished from the Omidyars' personal coffers on a relatively frequent basis.
The Hopelab Foundation was founded in 2001, and is really Pam's baby. It has spent an average of $5 million per year to create educational games that help kids deal with diseases such as cancer. Spending somewhere in the neighborhood of $50 million in total, including $10.4 million in 2011, the last year for which official numbers are available, it appears this effort is ramping up as well.
Also under the Omidyar Network umbrella, the Democracy Fund is a relatively new entity based in Washington, D.C. that is focused on strengthing U.S. democracy. The Fund is still staffing up and is its own grantmaking operation, with a process that is separate from the other Omidyar organizations.
In addition to their foundations, the Omidyars have contributed significant amounts to other organizations using their personal funds. Indeed, what is probably their signature initiative was done outside their foundations, in partnership with their alma mater, Tufts University, where they donated $100 million in 2005 to form the Omidyar-Tufts Microfinance Fund. The gift was the largest single donation in the history of Tufts University, as well as the largest private allocation of capital to microfinance by an individual or family, and has managed to grow to roughly $115 million in the last decade, while still giving out between $3 and $10 million in grants to microfinance institutions annually. While microfinancing has both its champions and critics, in 2009, Barron's reported that more than $1 billion in microloans were set for distribution as a result of this gift, leading them to put the Omidyars atop their list of most effective givers for that year.
More recently, the Omidyars' have made a $250 million pledge to create an independent nonprofit media venture called First Look Media, in partnership with Glenn Greenwald. (We've written about First Look here and here.) Before that, they committed $50 million to the Hawaii Community Foundation and the Ulupono Initiative, which, true to the Omidyars' philanthropic philosophy, has been making non-profit and for-profit investments in sustainable local food, renewable energy, and waste reduction.
The big chunk of money that the Omidyars laid out for First Look Media, along with the creation of the Democracy Fund, shows just how much their philanthropy remains a work in progress. Yes, there have been a lot of big initiatives and outlays over the past 15 years, but obviously the Omidyars still have both the mental bandwidth and financial resources for major new initiatives.
So what ties together the Omidyar archipelago? What's the governing philosophy? Because from the outside, is looks like one of the more scattered philanthropic operations around.
It's hard to answer those questions cleanly, because the couple's philanthropy has often generated controversy—for example, their support of for-profit microfinance initiatives which some say exploit the poor. But given how quickly Omidyar philanthropy has been changing and expanding lately, a fresh look is exactly what's needed. Simplistic labels don't capture how these donors think or their range of ventures.
The Omidyars try to pull together what they're doing in a statement of their philosophy on the Omidyar Group website. It makes for interesting reading, and suggests that many years of giving have left them humbled. They write:
Complex problems defy simple solutions. For every issue we focus on, we come to the table with specific goals but without preconceived notions about how to best achieve them. Our approach relies on experimentation, iteration and constant learning.
They emphasize the need to be flexible and dynamic, and to adapt constantly. They stress the importance of empowering individuals to make change. This experimental mindset may help explain the seemingly disjointed nature of the Omidyars' giving: Clearly, they haven't wanted to create a single centralized philanthropic entity with a particular way of doing business, like the Gates Foundation.
Also, there's no obvious ideological viewpoint, whatever is said about Pierre's libertarianism. He's taken a lot of heat from critics on the left over the years, but much of the couple's funding falls squarely in the progressive camp, especially with the establishment of the Democracy Fund and First Look. Pam has been a regular donor to Democratic politicians, but Pierre has hardly ever written a campaign check. Overall, the couple doesn't seem very partisan. They say they belive in the goodness of humanity and "work to create the conditions and provide the tools people need to improve their lives and, subsequently, the world around them."
Yeah, we know: That's a big and vague mandate. But then, they have $8 billion to spend. And through their range of involvements, the Omidyars are pulling a lot of different levers to try to change the world.