• October 2, 2014

Young Internet Tycoons Hurry to Embrace Big-Scale Philanthropy

Young Internet Tycoons Embrace Giving 1

Adrian Mendoza

Biz Stone, a Twitter co-founder, supports San Francisco Bay Area schools and nonprofits through his family’s charity. “As we learn and get better, we’ll increase our budget and increase our reach,” he says.

When Mark Zuckerberg, the 27-year-old co-founder of Facebook, announced last year that he was giving $100-million to set up a foundation to help Newark, N.J., public schools, he became one of the highest profile examples of an increasingly common type of big donor: the Internet geek gone good.

Mr. Zuckerberg follows donors like eBay’s Pierre Omidyar and Jeff Skoll and AOL’s Steve Case down what’s becoming a well-worn path for Internet entrepreneurs.

Those entrepreneurs and company officials listed on this year’s Forbes ranking of the richest Americans—who represent Amazon, eBay, Facebook, Google, Salesforce.com, Yahoo, and others—account for at least $1.54-billion in gifts announced to the public over their lifetimes, according to a Chronicle tally (and that’s not including Bill Gates, who has given more than $28-billion).

Mr. Zuckerberg, Mr. Omidyar, Mr. Skoll, and Facebook co-founder Dustin Moskovitz have also signed the Giving Pledge, devoting themselves to giving away a big share of their combined $29.9-billion.

Many more young Internet entrepreneurs­ are giving big, setting up foundations, building charity into their companies, and serving on boards relatively early in their lives. They give to causes such as education and health care as well as projects designed to create economic opportunity and expand access to technology.

And they aren’t waiting to make a difference.

“Internet entrepreneurs work in real time and see results in real time,” says Marc Benioff, the founder and chief executive of Salesforce.com, who has given at least $101-million to charity. “It’s not a group that’s going to wait until they die to make a difference.”

Entrepreneurial Skills

The traits that make these entrepreneurs successful in business color how they approach philanthropy, says Leigh Stilwell, who works with Internet entrepreneurs regularly as senior vice president for donor experience and engagement at the Silicon Valley Community Foundation, in Mountain View, Calif.

“They are really good at the skill of association, drawing themes and finding solutions and connecting ideas across areas and problems that seem unrelated,” Ms. Stillwell says.

That may be why many of these donors say they want to support charitable efforts that solve problems on a large scale.

Reid Hoffman, a venture capitalist and co-founder of the professional social network Linked­In, says he considers the same question whether he’s approaching a business or a charity: How can a fixed amount of money reach the most people?

Mr. Hoffman says he donates to and serves on the boards of organizations like the microlender Kiva, the entrepreneurship charity Endeavor Global, and the volunteerism group Do-Something.org, because he believes they help change society by creating self-sufficiency, businesses, and sweeping changes.

“It’s an investment in order to achieve a result,” Mr. Hoffman says.

Mr. Hoffman’s board positions—all at relatively young organizations­­—highlight another trend among Internet entrepreneurs. They often want to be on the cutting edge, says Ellen Miller, executive director of the Sunlight Foundation, a Washington group that promotes open government.

“They aren’t afraid of new ideas and new ways of thinking of old problems,” says Ms. Miller, whose charity received $50,000 from Mr. Hoffman in 2010.

Quick Results

Naveen Jain, founder of the online background check site Intelius and other companies, is among the donors seeking new solutions. He created a $1-million prize for anyone who creates a low-cost tablet computer that children and adults can use to diagnose and treat common illnesses in places without easy access to a doctor.

Entrepreneurs “want to engage in solving a problem,” Mr. Jain says. “What’s an entrepreneur? It’s somebody who sees a problem, thinks of a solution, and goes and executes on that solution.”

Craig Newmark, who started Craigslist as a hobby in 1995, has recently given to Internet connectivity projects in Kenya, Haiti, and veterans centers in San Francisco. He pledged $100,000 to a similar project for vocational schools in the West Bank.

Even if the solution is more traditional, the emphasis is on quick results. When Biz Stone, a co-founder of Twitter, set up a charity last year with his wife Livia, they focused on small, local projects to produce results.

“It feels like we are making an impact,” Mr. Stone says. (See the related article.)

Mr. Stone’s personal charity complements the work he did at Twitter to support social causes. He helped set up the “Hope140” page to feature charities’ use of the site and sold a Twitter-theme wine called “Fledgling” that raised more than $12,000 and brought a lot of attention to Room to Read, a children’s education charity. That work led AOL to appoint him as its social-impact adviser, to help the company assist the communities it serves.

Even the company he runs now, the Obvious Corporation, a relaunch of the technology company that popularized Twitter, seeks to create “systems that help people work together to improve the world.”

“When you align your company with meaning, you attract more sophisticated consumers, you attract more talented employees,” Mr. Stone says.

Many tech entrepreneurs share Mr. Stone’s view and include philanthropy in their businesses.

The Craigslist Foundation focuses on connecting people and training nonprofit leaders through programs like its annual Bootcamp conference.

Mr. Benioff used what he calls a “1/1/1 model” at the beginning of Salesforce.com, a company that provides databases that help companies and charities keep track of clients and donors. He set aside 1 percent of the company’s equity, products, and time to charitable causes through the Salesforce.com Foundation.

That foundation has given more than $24.2-million to charity and recently announced it would match donations to College Track—the foundation co-founded by Laurene Powell Jobs, wife of late Apple founder Steve Jobs—up to $500,000.

It has also offered its software to 11,525 nonprofits free or at discounted rates, and employees have volunteered at least 265,681 hours.

The program gives employees six days a year of paid volunteer time and matches grants of up to $1,000 to the charities employees support. That’s a big draw for talent, says Barbara Kibbe, the foundation’s chief operating officer who explains the foundation’s services during new-employee orientation.

“The people in the room are essentially thrilled,” Ms. Kibbe said.

Giving Name Recognition

Many Internet entrepreneurs see their work with nonprofits as central to their philanthropy.

“Philanthropy isn’t just about big gifts; it’s about participation,” Mr. Benioff says.

While Mr. Benioff and his wife once gave to a wide number of nonprofits anonymously, they now focus on one organization that these days bears their name: the University of California at San Francisco Benioff Children’s Hospital. They gave $100-million to the hospital for a new building because of research breakthroughs at the hospital and concerns about lack of facilities in the region.

His public announcement of his support for the hospital and a social-media fund-raising challenge drew $25-million more from other supporters, he said, including big-name technology bloggers and investors.

Zynga, the gaming company that was founded by the billionaire entrepreneur Mark Pincus, even sold special digital goods in its FarmVille game for the hospital and raised more than $800,000.

Rather than simply giving money, Mr. Newmark says he also wanted to use his expertise and name recognition to help nonprofits. That led to Craigconnects, a blog he runs to discuss nonprofits and causes he cares about.

“Sometimes the first thing you do is to bear witness,” Mr. Newmark says.

In seven months, he’s used the blog to bring attention to veterans causes, journalism, diplomacy, and open government. He studies how nonprofits use social media and shares the results in infographics.

He also held a contest to spur donations to charities that serve military families by promising to match up to $105,000 in gifts to those organizations and to match up to $25,000 of what people give to Donorschoose.org to support schools that serve military families.

His goal, he says, is to showcase effective charities. “I’m finding that the more effective a nonprofit is in helping people, sometimes those are the [organizations] who need the most help getting a good story out there,” Mr. Newmark says.

Success and Empathy

Mr. Newmark says that his philanthropy jibes with what he calls the ethos of the Internet: that people work together, get along, and get things done.

A version of that ethos is especially strong among people who work on consumer Internet sites, Mr. Stone says.

Because the goal of those Web projects is to improve a person’s life, it creates a deep empathy. When a site becomes profitable, something happens to its founders, he says.

“When you’ve unlocked empathy and you realize you can have an impact, it’s hard to not start doing that. You feel that your impact and your effectiveness are real and that you as a person have a very unique and powerful chance to make a difference,” Mr. Stone says.

Ultimately, the effect could be huge, Mr. Benioff says. “We’re talking about a significant amount here, hundreds of billions [of dollars] over a few decades, and the potential—when you are so driven towards impact—is spectacular,” he says. “We are living in a very exciting time.”

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