TEACHING NOTE FOR SKOLL FOUNDATION

Transcription

1 TEACHING NOTE FOR SKOLL FOUNDATION TEACHING NOTE: SI-67 TN DATE: 10/18/07 (REV D: 06/01/13) The Skoll Foundation was started in California s Silicon Valley in 1999 by entrepreneur Jeff Skoll, ebay s first president and full-time employee. When ebay went public in 1998, Skoll gained sizeable wealth overnight and decided to actively engage in philanthropy. Through his foundation, Skoll sought to fund individuals and organizations that, like promising startup companies, had well thought-out ideas that could quickly grow in scale and impact. Although the foundation did not identify them as such in its early years, these individuals became known as social entrepreneurs, people who acted as change agents for society, capitalizing upon opportunities to improve systems, invent new approaches and create sustainable solutions to social problems. Throughout its short history, the Skoll Foundation worked to evolve its mission, organization and grantmaking, while growing its endowment significantly. One of the foundation s primary objectives was to ensure that its support met the needs of its grantees, which worked across a wide variety of rapidly changing issue areas. In 2002, after several initial years with a broad mission of empowerment and positive change, the foundation decided to write a more focused mission statement. The Skoll Foundation based its programs and grantmaking on a new tripartite mission of advancing systemic change to benefit communities around the world by investing in, connecting and celebrating social entrepreneurs. As Skoll and his team looked to the future, they faced the challenge and opportunity of acting as leading social entrepreneurs themselves in terms of how they organized and structured the foundation s work. Key Facts Mission: The Skoll Foundation s mission was to advance systemic change to benefit communities around the world by investing in, connecting and celebrating social entrepreneurs. Copyright 2013 by the Board of Trustees of the Leland Stanford Junior University. This note was prepared by Lecturer Laura Arrillaga-Andreessen for the sole purpose of aiding classroom instructors in the use of Skoll Foundation, GSB No. SI-67. It provides analysis and questions that are intended to present alternative approaches to deepening students comprehension of the business issues presented in the case and to energize classroom discussion.

2 Teaching Note for Skoll Foundation SI-67 TN p. 2 Grantmaking Focus: The foundation focused on investing, connecting and celebrating social entrepreneurs. Assets, Grantmaking and Staff: In 2000, the Skoll Foundation (including both the supporting organization and private foundation) had $67 million in assets and distributed $1.2 million in grants to 23 organizations. The foundation distributed $1.5 million to 50 organizations in 2001, $6.1 million to 80 organizations in 2002 and $5.7 in grants to 120 organizations in By late 2003, the private foundation had $166 million in assets, and the supporting organization had $180 million in assets. As of 2004, the combined entities had grown to over $351 million in assets and had granted nearly $20 million to hundreds of organizations globally. The foundation staff had grown to 11 members by early 2004, with projected growth to 17 by late spring Key Players: Jeff Skoll, founder; Sally Osberg, president and CEO; and Christy Chin, director of strategy and programs. Position in Course The Skoll Foundation case study is intended for use in a course on philanthropic innovative grantmaking and strategy. The teaching objective is to illustrate how an innovative organization and strategy emerged within the philanthropic field to respond to social entrepreneur needs. The case underlines the mismatch between what a foundation provides and what a social entrepreneur needs. The case showcases Jeff Skoll s entrepreneurial vision for the Skoll Foundation and highlights the foundation s decision to focus its mission and brand following its initial three years of broadly aimed work. This case also explores foundation stewardship and strategy within a rapidly changing landscape. Supplementary Readings Arrillaga-Andreessen, Laura. Altman Foundation. Case Study. Stanford Graduate School of Business. Case No. SI-84. (2007). Web. Arrillaga-Andreessen, Laura. The Broad Education Foundation. Case Study. Stanford Graduate School of Business. Case No. SI-70. (2007). Web. Dees, Gregory. Note on Innovations in Philanthropy. Case Study. Stanford Graduate School of Business. Case No. SI-05. Web. Gross, Daniel. Giving It Away, Then and Now. The New York Times. July 2, 2006, Web. Martin, Roger L. and Sally Osberg. Social Entrepreneurship: The Case for Definition. Stanford Social Innovation Review (Spring 2007). Web. McGray, Douglas. Network Philanthropy: The Men Behind ebay are Leading a High-Tech Revolution that is Turning Charitable Giving on its Head. Los Angeles Times Magazine. January 21, Web.

3 Teaching Note for Skoll Foundation SI-67 TN p. 3 Murray, Sarah. Social entrepreneurs: Focus grows on financial viability of doing good. Financial Times. December 1, Web. Nee, Eric. Q&A with Jeff Skoll. Stanford Social Innovation Review (Spring 2012). Web. Schwartz, Beverly. Rippling: How Social Entrepreneurs Spread Innovation Throughout the World. Jossey-Bass, Print. What s Next for Philanthropy: Executive Summary. Rep. Monitor Institute, July Web. Assignment Questions 1. The Skoll Foundation based its founding mission and operating principles on Jeff Skoll's vision and values. What is Skoll s vision, and what are his values as translated into the foundation s work? While continuing to adhere to these values, what steps could staff and board members take to evolve foundation strategy as the needs of social entrepreneurs change over time? a. Timing for Class: 10 minutes for class discussion. 2. What are some of the potential challenges associated with the Skoll Foundation s lack of issue-oriented program areas? How might the organization overcome these challenges through external communications to potential grantees and the philanthropic field? How might the organization overcome these challenges internally throughout its operations? a. Timing for Class: 15 minutes for class discussion, allocating approximately 5 minutes for each of the three questions posed above. 3. The Skoll Foundation strives to practice social entrepreneurship in its own operations. Building on its current entrepreneurial practices, what mechanisms could the foundation implement to encourage innovation within its own organization and grantmaking practices? a. Timing for Class: 10 minutes for class brainstorming. Analysis 1. The Skoll Foundation based its founding mission and operating principles on Jeff Skoll's vision and values. What is Skoll s vision, and what are his values as translated into the foundation s work? While continuing to adhere to these values, what steps could staff and board members take to evolve foundation strategy as the needs of social entrepreneurs change over time? Jeff Skoll believes that the world s increasing complexity demanded ever more innovative strategies and solutions and that people with the imagination and will to address our greatest challenges would be the ones best equipped to determine a better future for our world. Thus, Skoll sought to fund social entrepreneurs, individuals and organizations that, like promising startups, had well thought-out ideas that could quickly grow in scale and impact. From its inception until late 2002, the foundation s mission was to empower those who have the greatest potential to make lasting positive contributions to their communities and the world. The foundation s operating principles were aligned with achieving this mission:

4 Teaching Note for Skoll Foundation SI-67 TN p. 4 1) We support nonprofit organizations rather than individuals. 2) We look for organizations with a proven track record whose work is based in empowerment. 3) We believe a focus on unlocking potential in those with the greatest potential will yield greater benefits for more people. 4) We seek leverage through our grantmaking, looking for multiplicative and long-term impact. 5) We see greater benefit in projects or programs with wide-scale or universal application. 6) We consider community benefit essential, and we look for evidence of significant, tangible results. 7) We are inspired by innovation, creative ideas, and new solutions to problems. In 2002 after a branding exercise, the foundation redefined its mission as a foundation that advances systemic change to benefit communities around the world by investing in, connecting and celebrating social entrepreneurs. The following examples illustrate how the Skoll Foundation aligned its social mission and operating principles with Jeff Skoll s vision and values: Evolving the foundation s program areas to reflect Skoll s vision. The Skoll Foundation s first President and CEO, Sally Osberg, narrowed the scope of the foundation s existing nine programs into four areas that resonated most closely with Skoll s vision. These areas were learning and education, micro-enterprise and economic development, technology and the philanthropic and public benefit sector. Basing foundation core principles on Skoll s vision and values. The core principles that Skoll articulated informed the foundation s mission and guided its actions. According to Osberg, The core vision of the organization remained true to Jeff s values and philosophy and was formally defined during this time as a vision statement: To live in a world of peace and prosperity where all people, regardless of geography, background or economic status, enjoy and employ a full range of their talents and abilities. Re-branding to ensure that the foundation s mission aligned with Skoll s vision. Based on his ebay experience, Skoll encouraged the foundation to go through a branding exercise. This helped the foundation reshape its mission to more specifically steer its work while simultaneously remaining aligned with Skoll s values and vision. The re-branding effort reinforced the foundation s goal to empower innovators and pioneers of change, while reorganizing operationally around the core areas of invest, celebrate and connect. While continuing to embrace these values, staff and board members could take the following steps to evolve foundation strategy as social entrepreneurs needs change over time: Dialogue with key leaders in the social entrepreneurship field. As part of the branding exercise, the marketing firm talked with Bill Drayton of Ashoka, a nonprofit that also funds social entrepreneurs. He noted that, What a social entrepreneur needs and what a

5 Teaching Note for Skoll Foundation SI-67 TN p. 5 foundation provides is almost a perfect mismatch. According to Drayton, foundations tended to support predictable and planned projects whereas social entrepreneurs valued flexibility and creativity in their work. Drayton s insight reflected the importance of remaining informed about social entrepreneurs changing needs over time to evolve foundation strategy. Dialogue regularly and openly with grantees. Grantees benefit from having the opportunity to honestly dialogue about what they need and how the foundation can support their work. The foundation could also consider using anonymous grantee surveys, such as the Grantee Perception Report administered by the Center for Effective Philanthropy. The Grantee Perception Report would enable grantees to provide candid feedback without jeopardizing their funding relationship. Dialogue with other non-grantee social entrepreneurs. In addition, the foundation could consider talking to non-grantee social entrepreneurs whose organizations are at stages other than the Skoll-funded mezzanine level. This would enable the foundation to better understand grantees needs before and after they are eligible for Skoll funding. Consider hiring staff or appoint board members with social entrepreneurship experience. This staffing practice would help to ensure that social entrepreneurs had a voice within the foundation and would also provide a unique contact for grantee partners. Collaborate with other social entrepreneurship funders. The desire for continued learning about entrepreneurs needs provides an opportunity for the Skoll Foundation to collaborate with other foundations that focus on social entrepreneurship. Foundation partnerships could consist of sharing data or actually co-investing in grantees. Consider creating a formal social entrepreneurship learning network. The Skoll Foundation should consider forming a network of social entrepreneurship funders. In addition to collaborating on philanthropic and social entrepreneurship topics, network partners could work together to better understand social entrepreneurs evolving concerns and challenges. Create a vehicle to share and disseminate lessons learned both by social entrepreneurs and funders. In addition to establishing a formal learning network, the foundation could also facilitate knowledge sharing through its online network, Social Edge 1, and supplement this effort with online and print publications. 2. What are some of the potential challenges associated with the Skoll Foundation s lack of issue-oriented program areas? How might the organization overcome these challenges through external communications to potential grantees and the philanthropic field? How might the organization overcome these challenges internally throughout its operations? 1 At the time of the case, Skoll s network was called Social Edge; however, at the most recent revision date of the Skoll Foundation Teaching Note, Social Edge is now the Skoll World Forum.

6 Teaching Note for Skoll Foundation SI-67 TN p. 6 Challenges associated with lack of issue-oriented program areas: Grantee Solicitation. The lack of issue-oriented program areas may create confusion for grantees about whether they qualify for a Skoll Foundation grant. Grantee Selection. Without having issue-oriented program areas, it could be hard for the Skoll Foundation to establish objective criteria to guide grantee selection, as well as to balance the types of social entrepreneurs and geographies that the foundation funds. Staffing. The Skoll Foundation will have to develop guidelines for the type of expertise and experience it looks for in staff members and provide avenues for staff to develop knowledge of issue areas that emerge as funding priorities. Evaluation. Because the Skoll Foundation funds so many issue areas, it could be difficult to determine common indicators of success that would enable comparison and learning across grantees. Sector Relationships. The foundation s departure from typical foundation (issue-areaspecific) practice may create confusion for grantees and other foundations about what niche the Skoll Foundation serves within the field of social entrepreneurship. With interests and investments across various issue areas and geographies, the Skoll Foundation s sector relationships are likely to be broad rather than deep as its work would relate loosely to a broad diversity of organizations. Knowledge Management. Because the foundation s grantees are so diverse in issue-areas and geographies, gathering and sharing best practices may prove more difficult. Since standard programmatic similarities do not exist among grantees, it may be challenging to apply learnings from one grantee to another. External communication strategies to help overcome challenges: Grant Guidelines and Criteria. Clarify on the website and in print materials what grantee qualifications the foundation seeks (e.g. the type of work and stage of organizational development that the Skoll Foundation funds). Develop clear and consistent funding decision guidelines and share these with potential grantees and others in the philanthropic sector. Funding Landscape. Create, support and/or share in the development and usage of a public database or website for social entrepreneurship grantmaking. Building a public database or website would enable social entrepreneurship funders to benchmark themselves against others in the field while helping grantees to distinguish the funding sources available. Hiring Criteria. Traditional foundations often hire staff members with issue area expertise in particular program areas. In order to identify the characteristics of successful staff

7 Teaching Note for Skoll Foundation SI-67 TN p. 7 members within the new organizational structure, the Skoll Foundation should assess existing staff members and identify common strengths and skills. These findings could form the basis for future hiring criteria. Assessment Indicators. Clarify on the website and in print materials what the foundation aims to achieve in funding social entrepreneurs. These objectives could help establish a set of indicators that identifies successful social entrepreneurs across issues areas. Knowledge Aggregation and Dissemination. Publicize examples and case studies of social entrepreneurs that the Skoll Foundation has funded as concrete illustrations of the foundation s work. Work with a consortium of social entrepreneurship funders to compile and update best field practices. Sector Relationships. In addition to communicating the value of the Skoll Foundation s advancement of the social entrepreneurship field, the foundation could also identify the innovations and contributions it made within specific issue areas. This will allow it to help develop relationships with funders with common issue area priorities (e.g. clean water, education and marine conservation). Internal communication strategies to help overcome challenges: Grant Criteria and Process. Maintaining a positive relationship with the grantee and potential grantee community is essential for attracting and retaining top quality grantees. Establishing clear, standard grant criteria and processes that program staff follow consistently throughout the grant development process will help ensure that grantees feel respectfully treated and will also maintain cohesion in the foundation s own operations. Staff Organization and Coordination. Because the foundation spreads its funding across diverse issue areas and geographies, Skoll could build deeper internal expertise and stronger external partnerships by organizing its staff into groups focusing on different issues or geographic areas. Evaluation and Internal Knowledge Management. To enhance continuous improvement of grant selection and management, Skoll Foundation staff could meet regularly to share updates on grant progress and build their knowledge of what works and what does not. 3. The Skoll Foundation strives to practice social entrepreneurship in its own operations. Building on its current entrepreneurial practices, what mechanisms could the foundation implement to encourage innovation within its own organization and grantmaking practices? Since its inception, the Skoll Foundation has modeled social entrepreneurship in its own practices. Here are some ideas for how the foundation might build upon its existing culture of innovation:

8 Teaching Note for Skoll Foundation SI-67 TN p. 8 Instill a culture of entrepreneurship within the organization. Staff members could be given the opportunity and time to engage in collaborative brainstorming sessions about new directions for the foundation s work. The foundation could highlight resulting ideas in regular newsletters, s, staff meetings or with an idea of the quarter award. These techniques would encourage staff to continuously innovate and would reinforce the foundation s culture of entrepreneurship. Staff member externships in social entrepreneurship. Give staff members the opportunity (or require them) to do an externship on the ground working with social entrepreneurs. An externship would not only help them better understand their grantees viewpoints but also would help them think and make decisions like a social entrepreneur, thereby incorporating those values into the foundation s daily work. Create a social entrepreneur-in-residence program. Modeled after the venture capital industry, this type of program would bring social entrepreneurs through the Skoll Foundation on a rotating basis. Exposure to social entrepreneurs would help Skoll Foundation staff continue to evaluate and evolve their own work. Interaction with the social entrepreneur-in-residence might also motivate existing staff to serve grantees in new and more effective ways. Provide staff members with discretionary funds and time to innovate and take risks. Give staff members the opportunity to directly allocate a small portion of foundation funds to organizations at a pre-mezzanine level stage of development. This would enable staff to think and work more like social entrepreneurs and less like traditional program officers. In addition, the foundation could allocate several hours per week for staff members to work on higher-risk projects (with potentially higher-reward), allowing the organization to test and learn over time. Hold itself accountable to the same metrics it applies to social entrepreneurs. The Foundation could regularly conduct internal and external self-assessments. The evaluation could assess whether its processes and staff members are ambitious, missiondriven, strategic, resourceful and results-oriented thus using the same metrics it applies to social entrepreneurs. Self-Assessment. Use an external evaluator to assess the foundation s strategy and outcomes. Refine grantmaking based on learnings and continue to evolve the foundation s branding based on changes. Impact Investing. The Skoll Foundation could expand its financial investments in social entrepreneurs. In addition to giving grants to mezzanine-level social enterprises, the foundation could use its financial capital in new and different ways, such as equity or debt investments in social enterprises, thus aligning its endowment investments with its social mission (mission-related investing and socially-responsible investing). They could also invest in for-profit media or marketing companies that could promote its grantees work.

9 Teaching Note for Skoll Foundation SI-67 TN p. 9 Market Research. The foundation could create surveys for regular dissemination among its grantee and partner communities to continually assess emerging market needs. The surveys results could identify unmet community needs and improvement opportunities as well as guide the development of new processes, products, services, programs and investment opportunities at both the Skoll Foundation and other foundations. Teaching Approach The Skoll Foundation case study is appropriate for a 45-minute class session including both a lecture and a discussion. Key themes for discussion include: Philanthropic innovation Institutional evolution Alignment of grantmaking and foundation strategy Global philanthropy Knowledge sharing Staff expertise Donor-advised funds Building capacity Social entrepreneurship and innovation Inflection point Experiential and knowledge capital Foundation stewardship Advancing a field Please see the Giving 2.0 website (giving2.com) for Stanford Graduate School of Business Lecturer Laura Arrillaga-Andreessen s complete portfolio of philanthropy Stanford Graduate School of Business case studies, teaching notes, frameworks and learning resources that she has created since 2000.