Okay, we obviously don’t know the answer to that question, since measuring the impact of philanthropy is notoriously hard. And I, for one, am not about to seriously compare the likes of Gordon Moore, Jeff Skoll, and Pierre Omidyar—all of whom have big footprints in parts of the developing world.
But here’s the donor I think has the most effective strategy for giving: Ed Scott.
Wait, you’ve never heard of Edward W. Scott? That name isn’t ringing a bell?
Don’t feel bad. Scott is not a billionaire and he didn’t create a well-known company like Intel or eBay or Facebook.
He made a good chunk of his fortune in the unsexy world of “middleware”—the software that connects operating systems and software applications. Scott co-founded a company called BEA in 1995 that was later acquired by Oracle for $8.5 billion, and he has gone on to make more money through a number of venture investments, like StubHub. Scott was the biggest investor in this Internet ticketing site before it was acquired by eBay for $310 million.
How much money Scott has made is unclear. He’s one of the many tech winners who aren’t at the Forbes 400 level, but have made fortunes of hundreds of millions of dollars.
I interviewed Scott a few years ago for my book, Fortunes of Change, and I could say a lot about his earlier background in government and how he got into global development philanthropy. But instead, I want to get straight to why I think Scott is so savvy:
Because he understands the importance of policy and advocacy better than most funders, particularly in the tech world, where government action is often seen as yesterday’s solution.
While Scott initially got into global issues through a direct service organization working with children in Central America, his interest quickly shifted to policy after he saw a documentary about the link between poverty in Nicaragua and structural adjustment. Since than, he’s been pretty laser-focused on using his money to influence policy. Instead of pouring his fortune into innoculating kids or drilling wells, Scott has mainly invested in groups which seek to increase government funding for development and health.
In 2001, Scott co-founded the Center for Global Development with Nancy Birdsall and Fred Bergsten, which has gone on to become the leading policy shop in Washington arguing for greater U.S. development assistance and reforming trade policies that hurt the global poor. The Center’s growth has been astonishing. Its budget grew to nearly $10 million within ten years, with Scott remaining actively involved as board chair and, presumably, continuing to put up serious money. The details of his giving to the Center are hard to nail down since Scott doesn’t seem to have a foundation, and the Center, like most nonprofits, doesn’t disclose how much specific funders contribute.
What counts most is Scott’s leadership in getting the Center for Global Development set up, because a number of major foundations soon followed him in backing the organization. In 2003, a bevy of heavy hitters got behind the Center in a big way: Gates, MacArthur, Rockefeller, OSI, and Hewlett. And the big money has been flowing ever since. Gates has given over $35 million; Hewlett has done at least $20 million.
A year after he co-founded the Center for Global Development, Scott joined Bill Gates and George Soros to put up funds to start DATA (Debt, Aids, Trade, Africa), which was created by Bono, Bobby Shriver, and other activists. (DATA later merged with the ONE Campaign).
Debt relief (which CGDEV pushed, too) is an incredibly powerful example of the effectiveness of policy changes. Because of significant debt relief over the past decade, developing countries have been able to markedly reduce spending on interest payments and increase spending on social issues. We’re talking billions of dollars across many countries.
It’s impossible to say how instrumental the advocates backed by Ed Scott and other funders were in moving the needle on debt relief, but they clearly played some role, and bankrolling debt relief advocacy stands as one of the best examples of philanthropic dollars well spent.
There’s more to say about Scott’s global philanthropy. He founded and chairs the Center for Interfaith Action on Global Poverty, and also founded Friends of the Global Fight, which focuses on AIDS, TB, and malaria. You can check out the full list of Scott’s philanthropic accomplishments here.
It’s a shame that Ed Scott’s philanthropy is so unusual. Most big individual global donors just aren’t that into funding policy and advocacy. It’s hard to say exactly why, but it seems that many donors don’t actually understand policy, whereas Scott had already spent years in Washington before getting rich in Silicon Valley. Or they tend to be dismissive of government, as I said earlier. Or they want the satisfaction of seeing their money directly save and improve lives.
That’s too bad, because philanthropic resources remain tiny in comparison with government funds, both in terms of development assistance by advanced countries and the resources of developing countries themselves. Steps to influence the size and uses of these pots of money are so much more important, generally, than private steps to address health or development.
No donor has understood that better than Ed Scott. Which is why he’s the most effective global giver to yet emerge from Silicon Valley.