A New Way Of Giving

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For Microsoft's Bill Gates, that has meant wiring our libraries to 21st century broadband standards--in some of the same buildings that Andrew Carnegie built in the early 1900s. For Gates, it has also meant tackling a host of infectious diseases in the Third World. Former Netscape CEO Jim Barksdale is spending $100 million to teach more kids to read in his native Mississippi, which ranks near the bottom in state rankings of literacy. Jim Clark, legendary founder of Silicon Graphics, Netscape and Healtheon, has pledged $150 million for a biomedical-research facility at Stanford. Pierre Omidyar, founder of eBay, has vowed to give almost all his $4.2 billion fortune to the Omidyar Foundation, which will help build the capacity of nonprofit organizations to become self-sustaining. Ted Turner, CNN founder and Time Warner vice chairman, promotes his brand of globalism through a $1.1 billion endowment for his United Nations Foundation.

Many of today's tech millionaires and billionaires are applying to philanthropy the lessons they have learned as entrepreneurs. They want to make sure their charitable investments benefit their ultimate "customers"--those in need--and don't get lost in red tape and bureaucracy. This has caused some tension with the nonprofit organizations that have traditionally been the recipients of such largesse. "Are charitable organizations ready to deal with all that money?" asks Stacy Palmer, editor of the Chronicle of Philanthropy. "If your scale has always been a lot smaller and all of a sudden you are given major resources, the question is whether you have the people in place to do the work."

One solution has been the founding of venture philanthropies, which use the same aggressive methods as venture-capital firms, whose money typically comes with technological expertise and experience at running lean, efficient organizations. This new breed of philanthropist scrutinizes each charitable cause like a potential business investment, seeking maximum return in terms of social impact--for example, by counting the number of children taught to read or the number inoculated against malaria.

In New York City, the Robin Hood Foundation collects contributions--many by credit card through its website--and distributes them to antipoverty organizations, to which it offers management support and from which it requires accountability. "What we do is not only give money but business skills and expertise in marketing, public relations, technology, financial and business management," explains Paul Brainerd, president of Aldus Corp. and founder of Social Venture Partners, a nonprofit consortium for techies who don't merely write checks but also lend their skills.

It is not just the fabulously wealthy and the entrepreneurial elite who are giving. Average Americans continue to step up, whether by volunteering at their local schools or contributing through churches, mosques and synagogues. "Let's not just praise billionaires," says retired General Colin Powell, founder of the education foundation America's Promise. "This has been American culture--moms and pops who are volunteering as Big Brothers and Big Sisters and running the Boy Scouts and the Junior Achievement."