Real Leaders

Jeff Skoll on Social Enterprise

The first president of eBay explains why he believes both social enterprise and impact investing provide the best model to deal with global challenges.

You are clearly a man with a vision – what makes you tick?

My vision was something that started when I was a kid. I used to read a lot, and by the time I was a young teenager, I started to realize that the world of the future might be a pretty scary and unsustainable place and even back then fears of new weapons, wars and diseases were top of mind for me. So my goal as a kid was to try and make a difference to the big issues facing the world, which I thought I would do by being a writer, writing stories that would get people interested in these issues and react accordingly.

As I grew up and became more immersed in business, I started to realize that I could not only make a contribution by writing stories about people making a difference but that I could also invest in people who were making a difference in the world, hence the Skoll Foundation. I could do more than just write stories, I could find writers, and help them tell their stories through different types of media, hence Participant, my media company.

I also learned that it made good business sense to invest in companies that were making a difference in the world, hence Capricorn, my investment management arm. Through all of this, my vision is for a peaceful, sustainable world… a world of prosperity. All the organizations that I’ve helped set up are working towards this aim.

Is there a right time to start “giving back”?

As a kid growing up, our family never really had a lot of money, we weren’t poor but philanthropy wasn’t really a concept that featured in our daily lives. But, things changed very quickly for me, thanks to eBay. From the time I started eBay with Pierre Omidyar to the time we went public was only two years.

To be honest, we didn’t have much time to think about “giving back” during those two years. So my “giving back” only really started after eBay. I do however believe that you don’t have to wait until you’ve done well before you start doing good. People should consider adopting a “doing good while doing well” theme into the way they run their businesses right now. It’s OK to do both at the same time and, in fact, it makes good business sense.

How do you see social enterprise evolving and what role do you believe it can play in addressing the many challenges and threats that we face?

The last nine years have seen a meteoric rise in social enterprise. If you were to do a Google search on social entrepreneurship seven  years ago, you would have had 10-15,000 hits. Now its more than 16 million. It’s grown considerably, and the number of NGOs being registered around the world is accelerating. I think this is because the traditional institutions of the world – government, church, business, traditional NGOs – haven’t been able to solve all the issues facing us as a planet and as a society… and the world gets more complicated every day.

Social entrepreneurs are one great vehicle for solving the problems that fall through the cracks of these institutions. Their growing importance in society from a “nice thing” to have to a “really important thing” to have is proof of the emergence of this sector. For example, in the United States a Social Innovation Fund has been set up by the Obama administration, and this shows the kind of progress that is being made.

When you hear the term “social entrepreneur” being described by the likes of Bill Gates, President Obama and Oprah Winfrey as “the next great thing,” you realize that in the next seven years the conversation around social enterprise will be elevated. I really believe that the social enterprise model has the potential to become the new normal.

“I realized in my thirties that I couldn’t wait until I was sixty before trying to make a difference”  

Impact Investing – investing for financial as well as social and/or environmental returns – seems to be gaining popularity as a new investment model. Do you believe it is possible to achieve financial and social and/or environmental returns?

All investing is really impact investing because it has an impact on our future in one way or another – for good or not so good. On the day that Lehman Brothers collapsed, we got word from one of our micro finance funds in Gambia that they were returning 28 percent so the contrast was incredible. With the Skoll Foundation we do these things called PRIs (Program Related Investments) and often these investments are as good, or better, than the traditional type of investing one does.

With Capricorn we invest in a number of companies that are oriented towards social good. The reason why investing in this idea makes sense is because you are investing into a growing consumer sentiment and awareness about these things. In the long-term, just by the definition of sustainable, these things will probably be around when others are not. Measurement is important – like any kind of investment, you need to be ruthless about what you are trying to achieve.

It’s more difficult to measure a social return on investment but if you set out with some metrics in mind, you are better able to assess how you’ve done and they provide an important benchmark. There’s a different conversation going on around investment right now, than there was, say, two years ago, when it was all about riding the financial engine.

The financial collapse over the last few years has got people thinking about how sustainable that model is and my experience has been that businesses rooted in addressing the bigger social issues do in the long-run outperform those that aren’t.

How do you believe Impact investors can achieve the greatest impact through their efforts?

It is a bit tough being an expert on all things. When you’re doing impact investing, having some areas where you are more knowledgeable can be helpful. For example, in the case of Capricorn, there’s a certain amount of environmental investing that we do that has run the gamut from palm oil in Tanzania to sustainable salmon farming in Scotland to solar and alternative power-oriented projects.

It’s helpful to have something in which you are personally interested or knowledgeable about. We start with a screening process that we have developed which includes major world issues, such as pandemics, water, nuclear and climate change. Then, other things come along that you wouldn’t normally expect.

For example, a deal on waste biomass conversion or some new kind of water transport. In short, you should be as entrepreneurial in impact investing as you would in any other form of investing – but it doesn’t hurt to have some kind of paradigm vis-à-vis the issues you are trying to impact and focus on those.

 eBay Foundation, Skoll Foundation, Participant Media, Skoll Global Threats Foundation …what’s next?

All of the organizations in the Jeff Skoll Group are at different stages – Participant alone is growing like crazy. We have 70 people there and have released 23 movies in the last five years. Right now, we have more than 40 in production. Trying to work out how we integrate these different entities so that each reinforces the other is important.

So, for Larry Brilliant at the Skoll Global Threats Fund to be able to draw on Capricorn to do due diligence on certain deals relating to climate change is invaluable. To be able to tell stories about the various social entrepreneurs we work with, and then through Participant build these into the campaigns we run, is important. For now, to be smarter and more collaborative in what we do as a group is the next challenge.


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