Few of the wannabe tech philanthropists have found it so easy to part with their wealth. Not because they're unwilling to give it away; rather, these payoff-obsessed individuals say it's difficult to find organizations worthy of funding. To their eye, traditional charities are appallingly inefficient. The ideal? A company that simultaneously makes money and makes the world a better place. Failing that, they want to make donations that will produce big change. They've sparked a remarkable spate of charitable innovation, such as Canadian eBay co-founder Jeffrey Skoll's 2002 donation of $475,000 to a Kenyan non-profit that develops cheap agricultural equipment. The project is already transforming the Kenyan economy.
Representing the apex of this value-investing approach to philanthropy is Joyce Young's son, former tech CEO Bill Young, who spent two years researching how to give his money away before he would part with a cent.
At 49, Young retains some of the awkwardness of adolescence; he is thin and guileless, a bit like the title character from Gilligan's Island. He says things like, "Sheesh," and "My mother is a gem." Like his mother, he invested in Red Hat; he also had money to spare, thanks to the Youngs' family business, Hamilton Computers, a hardware reseller. When Young, a Harvard MBA, sold the company to GE Capital Ltd. in 1993, he knew he wouldn't have to work ever again. After travelling and getting married, he returned to his old sector.
But by the dawn of the millennium, Young was tired of the tech boom. "It did seem like the world had gone mad," Young says. "I wasn't enjoying business as much. You know, this marionette dance according to what the capital markets wanted." And there was that big win from Red Hat. So Young left technology and founded a charitable foundation in April, 2000.
Giving away his money proved difficult. He saw little on the nonprofit side that he wanted to invest in. "We've been imprisoned by this notion that there's this big dividing line between corporations and not-for-profit, and they have completely different rules and regulations," says Young. "But what we need are more hybrid solutions"-socially responsible companies. The companies he funded, Young decided, would one day have to break even, independent of donations. His team identified 40 potential companies across Canada, then started narrowing the field by considering factors such as accountability and the public good. They ended up donating to none of them.
Young then decided that if such hybrid companies were so difficult to find, he would help entrepreneurs create some. To that end, he founded Social Capital Partners. "It's not designed to help people get jobs. This is designed to help people have jobs, and own companies, to get the business self-sufficient and profitable."
To date, Social Capital has funded three groups. There's a business that matches disadvantaged youths with summer jobs in Quebec, and a London, Ont., company that packages products for such clients as 3M and Research In Motion while offering transitional employment to people in need of both job and life skills; it has more than 50 employees and generated $1.4 million in revenue last year. But Young's clear favourite is Winnipeg contractor Inner City Renovations, which started up in September, 2002. It now has 25 employees, 18 of whom are aboriginal; it recently billed $130,000 in a month.
When he talks about his ambitions, Young speaks faster, and every so often his voice squeaks. He's as excited as a VC talking about a business plan-which, in a way, he is. And what does he get out of it? "My motivation's never been about making a fortune, but all of a sudden I ended up with one anyway," he says. "I was just in this incredibly lucky situation. What a privilege I've been given. I don't think there should be anything unusual about what I'm doing." Smiling, he adds, "I think we have some real change-the-landscape sort of ideas here."
(4)Getting rich is more fun than being rich
Mark Janoska, the co-founder of Extreme Packet Devices, stayed with PMC-Sierra after it bought his firm. Two years in, Toronto venture capitalists VenGrowth Capital Partners asked Janoska to join them. They wanted him to open an Ottawa office for the firm, which has more than $1 billion under investment. He decided to go for it.Report Typo/Error
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