CGI: Omidyar Network, A Philanthropy That Invests in For-Profits Too

CGI: Omidyar Network, A Philanthropy That Invests in For-Profits Too

Old school charity and “philanthropy” once referred exclusively to financial contributions to nonprofits. Today, Omidyar Network (ON) takes a more innovative and inclusive approach, called “flexible capital.” As a philanthropic investor, ON invests in for-profits, as well as nonprofits.

Here’s the deal. Whether they are for-profits or nonprofits, ON’s beneficiaries are chosen because they seek to achieve the ultimate outcome that ON strives for: “individual participation that can catalyze economic, social, and political advancement on a global scale.”  Omidyar Network was established in 2004 by eBay founder Pierre Omidyar and his wife Pam. To date, ON has committed more than $363 million to enterprises in microfinance, property rights, consumer internet, and mobile and government transparency. 

Flexible capital, human capital & technology

“Half of the funding we provide is in the form of grants to nonprofits, and the other half in investments – early stage, venture capital – to newly formed for-profits,” explained Amy Klement, Vice President, ON, in a private interview with me at the Clinton Global Initiative (CGI) last week. ON also provides value in the form of human capital, applying the principles of venture capital to philanthropy. For example, explained Klement, “as engaged investors, someone from ON takes a seat on the board...

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