I have been following the story of the Facebook Initial Public Offering (IPO) with interest. The IPO will make several senior staff billionaires, and will turn at least a thousand others into millionaires.
How many of these new millionaires will use their wealth philanthropically? This is a question that we in the foundation world should be asking. We can encourage philanthropy among the new Facebook millionaires, help them learn the ropes and even learn a little something along the way.
What do I know about IPOs and philanthropy? As executive director of the Firelight Foundation, I lead a foundation endowed from one couple’s stake in the 1999 IPO of Juniper Networks, a California-based producer of computer networking equipment. Juniper had one of the most successful initial public offerings in history, with a 190% single-day increase in value on its first day of public trading.
Firelight’s founders, Dave Katz and Kerry Olson, saw their personal net worth skyrocket with the IPO. A skilled software engineer, Dave had worked hard to earn their stake, but he and Kerry also felt that in some ways the wealth had fallen into their laps. They looked at the IPO as an opportunity to make a real difference on a large scale. Kerry had a doctorate in child development and a concern for the welfare of children affected by AIDS in Africa. So Kerry and Dave made the decision to take $13 million of their IPO stake and create Firelight Foundation.
Kerry and Dave were astute in their guidance of the organization, setting up a very solid grantmaking program that funds emerging African grassroots organizations that are too small or too new to be funded by larger, more established foundations but make the biggest impact in a child’s life. Firelight helps these organizations grow and develop.
Over 12 years, Firelight has leveraged Kerry and Dave’s initial contribution, attracting substantial additional funding. To date, Firelight has made more than $16 million in grants to 330 African organizations, and has also actively used its experience on the ground to play an important role in global debates about how best to get resources to the grassroots.
There are many ‘potential Firelights’ within the Facebook IPO, each one a reflection of the passions and convictions of those who will come into wealth. We have already seen significant philanthropic gestures from Facebook CEO Mark Zuckerberg, such as his $100 million gift to the struggling Newark city school system. We know as well that most of Facebook’s revenues are from outside the United States, and most of its users also live outside America. Thus we can hope that ‘giving back’ will be approached through a global lens.
Let’s think about how to welcome the Facebook philanthropists to create a philanthropy game plan. To help them think through the many issues that every philanthropic start-up faces: defining mission, vision, goals and approach. To create ‘dot orgs’ that are built to last, to grow and to innovate in the way that Facebook has.
A significant group of the Facebook team will want to use sizable chunks of their IPO stakes for social good, and they will likely approach this challenge with creativity and drive.
Let’s meet that creativity with what we know best – how to give and engage well in a networked world.
Peter Laugharn is the executive director of the Firelight Foundation