The Austin Business Journal
Dec. 1, 2006
by Jenny Robertson
The opening piano chords of The Pretenders' "I'll Stand by You" ring out from loudspeakers, and then photos flash across a large, white screen. They show Ethiopian women in brightly colored headscarves carrying water jugs across a field, and a mass of children huddled in a new schoolhouse.
The images illustrate the results of an Austin-based foundation, and Philip Berber, former owner of local daytrading technology firm CyBerCorp Inc., is hoping it resonates with the roomful of Austin's professional fundraisers -- his peers.
The Central Texas millionaire, originally from Ireland, is talking about his latest entrepreneurial effort: a family foundation started six years ago with a $100 million pledge, garnered when Berber sold CyBerCorp to brokerage giant Charles Schwab Corp. for $488 million.
Since that time, A Glimmer of Hope Foundation has quietly and steadily grown.
Started by Berber and his wife, Donna, in a CyBerCorp cubicle, the foundation now spans three continents. It has doubled the amount of grants disbursed each year, focusing mainly on projects in Ethiopia. And its unusual model has drawn the attention of other philanthropists.
"Seeking to redistribute God's wealth to others -- that's at the heart of what we do," Berber says.
Now, Berber is looking for someone who can take the day-to-day reins of the organization.
Later, leaning back in a plush green chair in his foundation's local office, Berber explains the next phase of the organization's life. Hiring the foundation's first chief operating officer will allow the Berbers to continue forging relationships with the group's donors and clients, while allowing them to focus on new directions for the nonprofit. Berber says he has whittled the initial pool of 90 applicants to five finalists and could make a hire early next year.
The step marks a period of expansion for the foundation:
| - | It has stepped up the money it grants from $2.24 million in 2001 to $5.56 million this year. In total, the foundation has granted about $26.6 million, an impact it estimates has touched almost 2 million people. |
| - | It has opened offices in Ethiopia, London and Austin. Three years ago, the foundation announced it would grant $5 million over a decade for projects in East and South Austin to help underprivileged children. It has since funded more than 50 local efforts. Berber says the foundation will likely augment its local presence, though he isn't yet sure by how much. |
| - | It has grown to employ about a dozen people, most of them in Austin. Once the group brings a chief operating officer on board, Berber expects the foundation's staff to increase. |
The Berbers' interest in Ethiopia comes at a time of substantial growth in giving among U.S. foundations to international efforts. According to a report released this fall by the New York-based Foundation Center, American foundations gave $3.8 billion to international causes in 2005. When adjusted for inflation, that marked a 12 percent increase over 2002 -- while overall giving grew by only 2 percent in the same period.
The Foundation Center attributes much of that jump to the work of the Bill & Melinda Gates Foundation, known for putting billions of dollars to work around the globe. Also, Americans have given more money to relief efforts following international disasters such as the 2004 Asian tsunami.
For its part, the Berbers' foundation has set a somewhat unique model for giving.
Rather than granting funds to other large nongovernmental organizations around the world, it has chosen to act in a way as its own NGO. In Ethiopia, for instance, it works directly with local groups to determine a community's need, ranging from water pumps to schools. And A Glimmer of Hope uses its approximately $61 million endowment to cover operating expenses.
Because of that, the group has attracted the attention of local donors looking to piggyback on the foundation's efforts -- though it hasn't actively sought donations, Berber adds.
Last year, it received about $1 million in outside donations, all of which it disbursed. Of that amount, $400,000 came from the local Michael & Susan Dell Foundationto dig 128 Ethiopian wells. This year, the Dell's private family foundation has granted another $500,000, says Mukta Pandit, who oversees international programs for the Dell foundation.
Pandit says A Glimmer of Hope's model aligns with many of her own group's standards: measurable outcomes, heightened accountability and an eye toward making sure projects are sustainable.
"It doesn't come at any cost to us," Pandit says. "They don't actually charge us any overhead, so 100 percent of our money goes" directly to helping those in need.
Such a gift, from one private foundation to another, is fairly rare, says Loren Renz, vice president for research at the Foundation Center. But it might develop into a more popular trend, she says, most recently illustrated by Warren Buffett's gift of more than $30 billion to the Bill & Melinda Gates Foundation.
"People are becoming more entrepreneurial in the way they're thinking about getting money to the populations that they really believe are most in need," Renz says.
And that type of entrepreneurial chord is exactly what Berber hopes to strike, he says, running his foundation with an eye on "social profit" rather than than financial gain. He speaks of "the business of philanthropy," which engages both the head and the heart.
"We looked at and studied how things are done traditionally," Berber says, "and we started with a clean slate."