Silicon Insider: High-Tech Philanthropy

Nov. 19, 2002 -- There are times when you are ecstatically happy to be wrong.

For years, the knock on high-tech entrepreneurs has been that they are cold-blooded misers. That they are classic self-made men and women, who pulled themselves up by the bootstraps and believe they owe neither society nor good fortune any credit. That they will never donate a dime to charity until they are old, guilty and bored.

This has proven to be quite an enduring myth, one to which even most of us in Silicon Valley have long subscribed. I've done my own share of stories over the years comparing today's high-tech tycoons to the Robber Barons of the past — the Carnegies and Vanderbilts and Rockefellers — who either became philanthropists to buy a last-minute ticket to heaven, or put off the charitable work to the softer second generation.

Counter-examples, when they appeared, were often written off as cynical exercises by the rich and powerful to recruit employees, stave of union organizers or distract the Justice Department. Thus, employee stock options, which created more wealth than all the government programs in history, were seen merely as a clever hiring and retention tool. Ditto with company scholarship programs.

When a company like Applied Materials kept scores of local charities and arts programs alive with its donations and loaned executives, or when hundreds of high-tech companies donated tons and tons of items to the Second Harvest Food Bank, or when numerous Valley executives wrote checks to save crippled local United Way… well, that was just good PR after all, a clever investment against future zoning violations or property tax hikes.

Lately, however, it's getting harder and harder to buy into the old myth of Tightwad Tech.

Hewlett and Packard's Prediction Comes True

Before they died, Bill Hewlett and Dave Packard warned us cynics that we were wrong. And, as with most things, we should have taken their wisdom to heart.

Hewlett, as it happened, was asked a few years ago why, given that he and Dave were among America's greatest and most admired philanthropists, hadn't their Silicon Valley successors fallen suit.

Give them time, Hewlett replied, you forget that Dave and I didn't start giving away our fortune until we were 50 years old. Before that, we were too busy running our company. Just wait: they'll come around, too.

I was reminded of Hewlett's prediction last week as I sat in a San Jose hotel ballroom for a luncheon recognizing the best fund raisers in Silicon Valley. It could just as easily have been Austin or Seattle or Salt Lake City or any other high-tech enclave in the United States.

It had been a hard year for the Valley's non-profits, from hospitals to schools to battered women's shelters. The economic downturn had hit tech harder than anyone else, personal bankruptcies were at the highest levels in 20 years, stock portfolios that were meant to be retirement pensions had been destroyed, and tens of thousands of people had been laid off. The need for charitable organizations had never been greater, and yet most were now desperately short of funding.

And yet, nearly all had survived — thanks to the hard work of volunteers, of fund raisers (most of them volunteers as well) and of good-hearted local citizens, both rich and poor. So much for hard-hearted Silicon Valley.

Young Philanthropists' Club

I was sitting at the table belonging to the Skoll Foundation, to whose board I'm proud to say I've just been elected. Jeff Skoll, who founded this fund for social entrepreneurship, sat across from me, next to his parents, who'd flown in from Florida for the event. Sitting next to me was Pierre Omidyar, now the head of an even larger charitable fund, based in Las Vegas. Pierre too had come to watch his old partner receive the award for Philanthropist of the Year.

I was struck by the symmetry of being in that table with those two men. Ten years ago, we sat in this same hotel, downstairs in the soda fountain, debriefing after a meeting. We had just left the offices of a giant corporation, which had offered to buy Pierre's and Jeff's company for an astonishing $40 million.

I was much more impressed than they were. We drank coffee and debated… and in the end the two young men, neither yet 30 years old, decided to turn the offer down. Instead, they would take their little company — eBay — to venture capitalists and build it themselves. That decision ultimately made them among the wealthiest men on Earth.

Now they had also become great philanthropists.

Hewlett was right — but even he didn't account for the acceleration of the high-tech world. It took Bill and Dave 30 years to do what Pierre and Jeff had done in fewer than 10.

Good Week for High-Tech Philanthropy

Skoll, for example, has already given away more than $80 million — in one extraordinary move last year, after 9/11 had understandably shifted most giving to New York City, he stepped in and bailed out dozens of local charities — and yet he is still not yet 40 years old.

Nor can the usual cynical claims be made against Skoll either. He isn't old; there is no Homestead Mine massacre in his past he must atone for, and he isn't hiring. Nor is he in the charity business for self-aggrandizement: I challenge you to even tell me what Jeff Skoll looks like.

Skoll is, in fact, just a shy, very smart man, who knows he has been both good and lucky, and now wants to do some good in the world. In that respect, he is a kind of secular saint — but a tough-minded one.

The Skoll Foundation is a not a give-away program, but a very sober-minded venture capital fund for seeding "social entrepreneurs": people around the world whose good works aren't just local, but reproducible; not just anecdotal, but scalable. So is the Omidyar Foundation.

In fact, these two foundations, with their new, entrepreneurial view of giving, may prove as revolutionary to philanthropy and eBay was the world of reselling.

It was, in fact, a good week for high-tech philanthropy. The great biologist E.O. Wilson announced that was naming a new ant species after Intel's Gordon Moore for the gigantic contributions the latter has made to worldwide conservation. And Bill Gates, that supposedly cold-blooded robotic genius of Redmond, announced that he was giving $100 million to fight AIDS in India.

High tech's entrepreneurs, always in a hurry to the Next Big Thing, have now set off out to make the world a better place… and to do it fast.

As a standing ovation accompanied Jeff Skoll to the stage, I decided that maybe it was finally time to temper my reporter's skepticism and see the good works of high tech's business leaders for what they really are: working hard at doing good … and not waiting until old age to see the payoff.

Michael S. Malone, once called “the Boswell of Silicon Valley,” most recently was editor-at-large of Forbes ASAP magazine. His work as the nation’s first daily high-tech reporter at the San Jose Mercury-News sparked the writing of his critically acclaimed The Big Score: The Billion Dollar Story of Silicon Valley, which went on to become a public TV series. He has written several other highly praised business books and a novel about Silicon Valley, where he was raised. For more, go to Forbes.com.