News

Stanford gets $150 million gift

Menlo Park couple donates to spur entrepreneurship in poor countries

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.

Comments

Posted by Adri, a resident of Old Palo Alto
on Nov 4, 2011 at 8:20 am

Wow! This is so awesome! Can they also provide a part of those funds to support "developing" cities around the Bay Area? Like E. Palo Alto, E. Menlo Park and such? Wouldn't mind contributing some volunteer time to assist.


Posted by local parent, a resident of Another Palo Alto neighborhood
on Nov 4, 2011 at 9:57 am

A friend in Switzerland told me that their elementary school kids learn about the chocolate business the way ours learn about the California missions. It would be awesome if the business school could look into augmenting our elementary curriculum with entrepreneurship education as well. My sibling who got into trouble buying gum and other candy wholesale and selling it on the playground at a mark up is now the business tycoon in the family...


Posted by KD, a resident of Menlo Park
on Nov 4, 2011 at 2:09 pm

BizWorld, a nonprofit foundation, offers business education for elementary kids. The program can be brought to any elementary school. I recommend that you check it out. it's roughly a week-long program and the kids enjoy it while learning a lot.


Posted by Perspective, a resident of Midtown
on Nov 5, 2011 at 5:41 am

Perspective is a registered user.

Wow..what a novel concept...decrease poverty through ENTREPENEURship?? Who would have ever thought that one could risk, work and sweat through a new business in the hopes it would pay off for the one who did it..while employing many more? Sounds like horrid capitalism to me.

I am pleased with the intent, and grateful to the donor, but saddened that such a concept need to even have an Institute to promote it in the what was the Country that founded the cradle of opportunity.


Posted by neighbor, a resident of another community
on Nov 5, 2011 at 8:34 am

Note that the $150 million gift has a specific purpose/guidelines. It is not for local projects.

From the SU GSB website:
"The Kings' donation will start the Stanford Institute for Innovation in Developing Economies, which will seek to stimulate and spread research and management techniques for healthcare, transportation, agriculture, banking, communications and other sectors in poor countries. Faculty and students are expected to work in the field to support local groups in Africa, Asia, Latin America and other regions."


Posted by Steve C, a resident of Menlo Park
on Nov 5, 2011 at 8:56 pm

Real heroes. Such a relief amongst so many self-indulgent wealthy people. Examples for all.


Posted by musical, a resident of Palo Verde
on Nov 5, 2011 at 9:19 pm

Stanford's $16 billion endowment grows. Another example of the economic imperative that big piles of wealth get added to bigger piles. (See Gates/Buffet.) How else can you assure that your legacy is spent wisely rather than just vanishes? I wonder where the 99% would have deployed $150 million. Could have made each of themselves 50 cents richer.


Posted by stan, a resident of College Terrace
on Nov 6, 2011 at 9:17 am

More wealth piled upon an even larger mountain of wealth. It seems to me that the GSB is great at promoting kumbaya business practices at the school, which is great for PR. However, once those students graduate, it's pretty much business as usual:
Maximize other peoples effort, and exploit
other peoples money for your personal gain.
Extract maximum value out of a company, leave, and claim 'success'.
Rock bottom wages for your employees,
maximum stock option for the executives.
etc.

How many MBA's do you suppose have had a hand in the mortgage melt down, the global economic crisis, and in general, just about every disastrous, but otherwise GREAT! business plan in recent memory? Something to be real proud of for sure.


Posted by neighbor, a resident of another community
on Nov 6, 2011 at 9:42 am

Once again the PA "community" twists some very nice news about a philanthropic gift into something nasty and selfish. They didn't get any King$$, or get to tell the Kings how to spend theirs.

Dorothy and Robert King gave a huge sum in the hopes of making a lasting difference in the futures of people with no real chances in Life who live is the worst poverty on earth.


Posted by Jim, a resident of Mountain View
on Nov 8, 2011 at 11:52 am

To Stan "College Terrace" resident:

If you go to the mall and expect to see old people, when you go to the mall you will see old people.

Check out Web Link for a Stanford MBA who is doing something useful. Every once in awhile things are different than you are expecting.


Posted by Amadu Massally, a resident of Palo Alto Hills
on Nov 8, 2011 at 6:08 pm

This is great! I wonder if my country (Sierra Leone) with the most arable of land in the world, arguably, can be a host nation to the agricultural students/department at Stanford. Being one of the poorest countries in the world, with strong historic ties to the US, it will be a worthy cause and a win-win situation.

FYI, Sierra Leone is one of the poorest countries in the world in spite of our many natural resources and where many people live on less that $1 a day. If you want to make a real difference with poverty in developing countries, you need not look any further.

Can Palo Alto Online and Stanford University make that happen?

amadu.massally@gmail.com


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