Austin American-Statesman
Aug. 20, 2000
First, the children stole Donna Berber 's heart. Then they broke it.
Anguish flits across Berber's face as she describes being transfixed one year ago by photographs of Ethiopian youths. Earnestly leaning forward on her plush, beige couch, she recalls melting at the children's timid half-smiles and shining eyes burning through sunken faces, but crying over bodies ravaged by famine, war, disease and poverty.
Berber craved a way to touch their lives -- something more personal than licking a stamp to send a check. But at the time, the idea of financing a massive relief effort in Ethiopia seemed as distant as the country itself.
Suddenly, high-tech changed everything for Berber and her husband, Philip, co-founder and chief executive of CyBerCorp Inc.
In March, Charles Schwab Corp. bought CyBerCorp for more than $500 million in stock. From their part of the windfall, the Berbers earmarked $100 million to finance and manage their own charity, A Glimmer of Hope.
The organization is dedicated to relief efforts in war-torn Ethiopia, a parched nation plagued by starvation, AIDS and other epidemics.
"It felt like divine guidance," said Donna Berber , 41. "I feel strongly that the money comes through us. We are not of it, and it is not of us. We're just blessed to have this wealth we can distribute to improve people's lives. It's a privilege."
As the technology boom begets a crop of new multi millionaires, some of the money that has poured into their pockets is flowing back into charitable and community causes.
In Austin, high-tech executives have given millions of dollars to the arts. The United Way/Capital Area alone raised a record $17.1 million last year. More than half of the donations of $1,000 or more came from tech executives, spokeswoman Diana Sokol said.
A Glimmer of Hope catapults the Berbers into a growing group of high-tech entrepreneurs who embrace a more proactive style dubbed "venture philanthropy," whereby donors demand a visible -- even tangible -- social and financial return on their investments.
"People who have earned a good deal of money at a very young age in life want to be directly involved, which is a marked change in the last 15 years," said Eugene Miller, assistant director of the Center for the Study of Philanthropy in New York. "They want to use that money to personally change the world, as opposed to just writing a check that then gets sent to an established place."
The most conspicuous example is the $22 billion Bill and Melinda Gates Foundation, which works extensively on global health issues, education and projects in the Pacific Northwest. Even Oracle Corp.'s leader, Lawrence Ellison , who admits he thinks his entrepreneurship benefits society more than his checkbook could, gives $100 million annually to the medical-research-oriented Lawrence Ellison Foundation.
Michael and Susan Dell last year quietly set aside $114 million to start an eponymous family foundation targeting education and children's health, the Chronicle of Philanthropy said.
For the Berbers, starting A Glimmer of Hope melds heart and head - - Donna's empathy and emotion, matched with Philip's more pragmatic, business-focused mind. She wants to save the world; he wants to draw the business blueprint that aids her.
Ever the entrepreneur, Philip Berber sees his new organization as a non profit startup company -- a prototype for a wave of Web sites he predicts will change the way charities embrace the Internet. Berber wants "dot-org" to join "dot-com" in the vernacular.
"The truth is, this is a business. But instead of personal gain, you measure success in terms of human profit and social gain," Berber said. "I have in mind a next-generation dot-org, meaning that it's being run in a practical, efficient and financially viable way." A team effort.
Curled up on the sofa in her West Lake Hills home, Donna Berber admits that CyBerCorp's success ultimately spawned A Glimmer of Hope - but that her affinity for philanthropy developed much earlier.
Growing up near London, wandering streets that bustled with people from all walks of life, Donna longed to parlay her own good fortune into someone else's. Eighteen years ago, when Donna met an Irish entrepreneur from Dublin, she found a like-minded mate.
"It's something that's always turned our lights on," Donna Berber said. "It's wonderful to be in a partnership where we're both working toward the ultimate goal of touching others' lives."
Philip Berber , 41, started his business career and his family in London. His first startup, Financia, was bought by Houston-based Frontier Financial Corp. in 1991, and the Berbers became transplanted Texans.
Captivated by hilly Austin, the Berbers moved to the city five years ago and co-founded CyBerCorp. The software company makes programs aimed at real-time stock watchers -- commonly called day- traders -- who use the Internet to get immediate market information and make purchases.
The couple grew busy with CyBerCorp and the birth of a third son, causing them to drift farther further away from their goal of investing significant time and money in philanthropic acts.
Donna Berber can pinpoint the moment things changed. Jumping slightly and pointing excitedly at her husband, she singles out June 1999 as the first time she and Philip felt financially free to follow their instincts.
Just talking about it gives her goose bumps.
"I remember it well -- the company got a small private placement, and we became more liquid then," Donna recalls with a shiver. "It was nothing like the scale we're talking about now, but at that point we said, 'Stop dreaming about it; stop talking about it. Do it."
"It was a long process, a full year of meticulous research and carefully sought advice from experts in blighted regions. Cobbling together a plan required stealing any spare moments they could squeeze from each day -- mostly midnight marathons after tucking in their children.
"Starting a charity is an extremely labor-intensive thing to do," said Ann Kaplan, editor of Giving USA, a publication from the American Association of Fund-Raising Counsel . "It's not a common response. People don't do it without considerable planning, because it's not an inexpensive thing to do."
Donna Berber barely blinked before settling on programs that benefit single mothers and children.
Curious about Africa, she studied the region, met with a native -- now an Austin resident -- who had worked with orphanages there, and found Ethiopia's calling rang loudest. She was horrified at news of abandoned babies slowly dying on unsanitary streets, and mothers widowed by war and forced into prostitution to sustain their families.
Finessing the details became a team effort. While Donna's blood boiled at each tale of human plight, Philip's cooler head reveled in the tidy logic of finding point A, defining point B and bridging the chasm between them.
"When you come face to face with that kind of pain, it's hard to deal with," Donna Berber said. "But we didn't look away. We chose to engage."Who's who of high-tech The size of the Berbers ' donation puts the couple in high-profile company.
Steve Case, America Online Inc.'s co-founder and chief executive, runs a $100 million foundation. Pierre Omidyar, founder of eBay, will have given $100 million to his foundation by the end of the year and plans to give away all but 1 percent of his wealth in the next 20 years. Virginia-based billionaire software executive Michael Saylor, whose wealth is estimated at $13 billion, seeded his own $100 million charity -- with the promise of more each year -- dedicated to making a college-level education free to anyone, according to the Chronicle of Philanthropy.
"Most of the entrepreneurial community views philanthropy as a contact sport," said Peter Zandan, himself a philanthropist and co- founder of Zilliant Inc. and IntelliQuest Inc. "That's how they built their businesses, and that's how they view the world."
In Austin, tech pioneer George Kozmetsky and his wife, Ronya, have led the way. Thirty-four years ago, the duo started the RGK Foundation, which awards grants to educational, medical and community causes.
Now, the list of entrepreneurs starting foundations reads like a who's-who of high-tech: the Dells; Vignette Corp. co-founders Ross Garber and Neil Webber; Zandan; Tom Meredith, who heads Dell Ventures, the computer company's venture capital arm; and others.
"We have not seen the creation of this level of wealth in the country since the turn of the previous century," Miller said of the Center for the Study of Philanthropy. "Fabulous wealth has brought a change in what philanthropy looks like."
In Philip Berber 's eyes, it looks like a business.
Discussing his dot-org concept, Berber peppers his speech with lingo like "project management," "investible capital" and "sustainability." He's as passionate about the cause as he is eager to set an example with A Glimmer of Hope.
He relishes sketching this strategy from scratch.
"Part of it is about using the Internet to communicate video and text, showing people how to make a difference and giving them easy opportunities to do so," Berber said. "The other part is building a long-term, lasting foundation. I'm looking seven generations ahead."
The theory is vintage entrepreneur: Keep it small, and make the money work. Berber said he'll manage his initial pledge so that it grows and then reinvest the income into A Glimmer of Hope.
As far as distributing the money, Berber has exacting standards. He wants pie charts, not pie-in-the-sky; proposals will need financial projections, a management team and a solid understanding of the social impact the dollars will have.
A Glimmer of Hope will operate from three offices -- its Austin headquarters, plus centers in Dublin and London.
Berber said he'll hire a staff of professionals to manage A Glimmer of Hope, eyeing people with experience in Ethiopia, financial expertise and other business skills.
Both Berbers plan to actively participate in A Glimmer of Hope -- Philip will remain at CyBerCorp, and Donna will work part time with the organization and said she plans to engage her sons in its activities as well.
The Berbers ' $100 million donation will underwrite operating expenses and finance the nitty-gritty details needed to keep a non profit organization afloat. Doing that frees up a donor's money, meaning 100 percent of every contribution goes directly to the project of the giver's choice.
That touches on an issue central to charitable giving in the dot- com arena -- how much of a donation actually makes a difference.
"To date, people have been cynical about giving because they don't know how much goes back to bureaucracy," Miller said. "The influx of businessmen running their own organizations has made other nonprofits more accountable in how they spend their money."
Said Donna Berber , "People should know they're making the entire difference they intended, not just two-thirds of it."Defining their cause
Early incarnations of A Glimmer of Hope were born quietly in the same small office, tucked away behind the kitchen, where Berber first crafted CyBerCorp's mission. Friends signed on as staffers. CyBerCorp employees offered to design the Web site.
At 1 a.m. in a London hotel room early this summer, fighting fatigue even as their 2-year-old slept next to them, the Berbers scribbled a rough mission statement for A Glimmer of Hope.
But the Berbers still needed eyes and ears in Ethiopia -- someone to witness firsthand the hardship against which native women and children battle. Most of their contacts came third- and fourth-hand through a string of sources, such as Jayne Gallagher, who runs an adoption program in Ethiopia.
Donna Berber flew to Washington and met with officials at the Ethiopian embassy. Impatient to move A Glimmer of Hope from conceptual to concrete, she wanted to understand the culture, the government and any language barriers the organization might encounter.
She didn't expect tears.
"We made an incredible connection," Berber said quietly. "I sat there with senior government officials, and we were all crying. Imagine that."
A Glimmer of Hope has started covering some costs related to Gallagher's program, such as helping to reduce fees for prospective parents interested in adopting orphaned Ethiopian babies.
The organization also has started A Mother's Village, a shelter near the capital of Addis Ababa, that initially will house up to 100 women and children in an effort to give them economic independence. They cook and clean the shelter, and the children go to school while the mothers receive vocational training, often in making crafts they can sell. Next on the Berbers ' list is an irrigation program digging wells near parched Ethiopian communities. In September, Donna will make her first trip to the region.
"With everything we do, we want to maintain respect for Ethiopia and Africa and the traditions, culture and heritage," Donna Berber said. "Their way is not our way, and we cannot go in thinking that everything must be done as it is in America."
The lure of Ethiopia aside, Philip Berber insists he's not ignoring cries for help from Austin's community.
As deliberately as he researches everything -- slowly, carefully and in low-key style -- Berber is studying the city and meeting with its leaders and various non profit organizations.
He's resolved to give back to the city that cradled his company and embraced his family when it moved to Austin in 1995.
"There's a crying need in Austin, problems that will be tougher to solve than it is to build a business," Berber said. "I'm committed in my head and my heart to spend time on that."