Stanford University's Graduate School of Business has received a $150 million gift -- one of the largest in the university's history -- to create an institute to alleviate poverty through entrepreneurship, officials have announced.
The gift from Dorothy and Robert King of Menlo Park was inspired by 40 years of hosting international students in their home. As hosts, the Kings saw the impact that education and entrepreneurship can have on individuals and on a larger scale, they said in a Stanford announcement.
The funding will create the Stanford Institute for Innovation in Developing Economies (SIID, but referred to as "SEED"), which will help develop entrepreneurship in countries where the per-capita income is less than $1.25 per day. An estimated 1 billion people worldwide live at that level, business school officials said.
Robert King is an investment partner at Peninsula Capital in Menlo Park and a 1960 Stanford graduate business school alum. He said he was inspired by the success of one entrepreneurial venture, led by two entrepreneurs whom one of his houseguests introduced.
King provided seed money for Baidu, a Chinese-language search engine, which later debuted on NASDAQ in 2005. Baidu now employs 10,000 people in China, he said.
"We believe that innovation and entrepreneurship are the engines of growth to lift people out of poverty. And we believe Stanford's tradition of innovation coupled with a forward-thinking global bias as well as its multidisciplinary resources will make a real impact," he said.
Hau Lee, a professor of operations, information and technology at the Graduate School of Business, will head SEED. He said the institute will provide on-the-ground support for entrepreneurs, offer new courses and engage in research. Training programs could help local farmers to be independent, while funding and mentoring could help expand the work of overseas entrepreneurs, he said.
Stanford students will be able to travel to developing countries to work on socially conscious projects, such as product development, through the institute.
Employing entrepreneurship to build up economies "is distinct from providing humanitarian aid and relief. It is turning people from receivers of aid to self-employed or the working," Lee said.
The Graduate School of Business and Stanford's Hasso Plattner Institute of Design have already pioneered a program in which students collaborate with overseas organizations to identify needs and create new ventures. Two such examples are d.light, a consumer-products company serving people without electricity, and Driptech, a water-technologies firm that produces affordable, high-quality irrigation systems designed for small-plot farmers.
Garth Saloner, business-school dean, said many students want to work on the global level, making people's lives better through business, education, health care and governance.
He called SEED "an enormous opportunity for Stanford students, faculty and on-the-ground entrepreneurs."
"There are very few settled solutions about how best to alleviate poverty in a wide range of contexts, which means there is plenty of opportunity to uncover, share and apply new insights," Saloner said.
Lee has had his own first-hand experiences with the societal impact of business.
"I did a hazelnut plantation in Bhutan so that people didn't have to be migrants," he said. Prior to the project, village children were mostly raised without their fathers, and many areas had been deforested. But now, locals are able to stay home and work at the plantation. The fields and woodlands have been restored.
And 25 percent of the company's profits go back to the community, he said.
Social entrepreneurship also has positive political effects, he said. Local farmers are welcoming foreigners.
"They are not viewing it as Western capitalism coming in. It's having a positive impact," he said.
Stanford has received other large gifts: $400 million from the Hewlett Foundation in 2001 ($100 million for matching undergraduate scholarships and $300 million to the School of Humanities and Sciences); $100 million from real-estate developer John Arrillaga in 2006; $105 million from Nike founder Phil Knight in 2006; and $75 million from Business Wire founder Lorry Lokey in 2008.