eBay founder gives $100 million for microfinance to help world’s poorest people
mongabay.com
November 4, 2005
Ebay Inc. founder Pierre Omidyar and his wife, Pamela, have given $100 million in eBay stock to Tufts University to create a fund that will invest in microfinance.
Microfinance, the practice of loaning small amounts of money to people who are often too poor to qualify for conventional lending, is increasingly seen as a promising means to help the world’s poorest people. Supporters argue that microfinance can fund microenterprises that generate broad-based, long-term economic growth opportunities in developing countries.
The $100 million gift is the largest that Tufts — a university near Boston — has ever received. The Omidyar-Tufts Microfinance Fund will be administered by the university
eBay and Omidyar Network Founder Launches $100 Million Microfinance Fund in Partnership with Tufts University
Tufts University news release
MEDFORD/SOMERVILLE, Mass—Tufts University today announced that Pierre Omidyar, founder of eBay and co-founder of Omidyar Network with his wife, Pam both graduates of Tufts will invest $100 million in international microfinance initiatives through a unique partnership with their alma mater.
The $100 million endowment gift is the largest single gift in the history of Tufts University as well as the largest private allocation of capital to microfinance by an individual or family. The Omidyar-Tufts Microfinance Fund will be invested solely in microfinance initiatives. An independent supporting organization controlled by a Board of Directors will have fiduciary responsibility for investing the funds with the expectation of risk-appropriate financial returns.
“Partnering with the Omidyars to advance microfinance is a strategic fit for Tufts on many levels,” said Lawrence S. Bacow, president of Tufts University. “As an economist, I’m attracted to microfinance as a financially self-sustaining model for making a difference in the world. Tufts’ commitment to active citizenship is a global pursuit that runs deep, and we are pleased to leverage resources that yield so many positive returns.”
Fifty percent of earnings from the fund will be reinvested in the original pool for additional microfinance programs. The remaining 50 percent of income will advance important Tufts programs such as support for faculty, financial aid, debt forgiveness for graduates pursuing careers in public service, and scholarships that will enable economically disadvantaged students to attend classes during summer session.
“We believe that business can be a tool for social good. Microfinance has already shown that enabling the poor to empower themselves economically can be good business,” said Pierre Omidyar. “By engaging Tufts as an institutional investor in microfinance initiatives, our hope is that the microfinance industry can better meet the demand for financial services among the world’s poor, while also demonstrating its potential commercial viability to a wider institutional investor audience.”
The $100 million investment will bolster international microfinance institutions in their efforts to scale their capacity to make loans to poor, predominantly female heads of households, who lack adequate income to provide the basic necessities of food, shelter and clothing for themselves and their families. Microloans averaging $600—often as low as $40—enable the poor to launch their own entrepreneurial pursuits.
Pierre Omidyar noted that strategic alignment with Tufts was ideal for many reasons. “The university has not only demonstrated leadership in educating active citizens, but Tufts also has consistently engaged in seeking practical solutions to real-world issues around the globe,” he said.
This investment in international microfinance builds on the Omidyars’ well-established partnership with Tufts. In 1999, the University College of Citizenship and Public Service at Tufts was founded through the generosity of the Omidyars, and it has gained international attention for creatively embedding public service values, skills and learning opportunities across the curriculum. Outreach activities involve students, faculty, staff, alumni and members of surrounding communities in programs ranging from child literacy to environmental cleanup.
“Through this venture with Tufts, Pierre Omidyar is using the same creativity that produced eBay to influence the world in profound ways,” said President Bacow, “and we thank Pierre and Pam for this opportunity to be their partner.”
More information on the Omidyar-Tufts Microfinance Fund is available at www.tufts.edu/microfinancefund.
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