Inside the Omidyar Network, New Thinking About a Changed World

A trump rally in 2017. Michael Candelori/shutterstock

A trump rally in 2017. Michael Candelori/shutterstock

Editor’s Note: This article was originally published on February 14, 2019.

The 2016 election prompted many foundations to play urgent defense to protect hard-won gains in areas like the environment and healthcare, as well as to support immigrants and other vulnerable groups.

But Trump’s election, along with the Brexit vote a few months earlier, also led some philanthropies to ask deeper questions about the rise of illiberal populism—and how to combat this ominous trend.

“The 2016 election was a wake-up call that the institutions of democracy are under threat,” says Mike Kubzansky, who leads the Omidyar Network, which is the philanthropic investment firm of eBay founder Pierre Omidyar and his wife Pam. “Things we once took for granted... had been thrown into question.”

Like so many other observers, Omidyar’s leadership saw a clear line between the new illiberalism and the failure of capitalism to deliver shared prosperity—a failure that was generating new cultural cleavages. They also saw how technology was being used to amplify grievances and spread disinformation.

Last year, after Kubzansky became managing partner at ON, the organization embarked on its first strategic review in 10 years. That process involved grappling with an environment that had changed dramatically since the Omidyar Network was founded in 2004. In a very different world, Kubzansky says, it was important to “think about what really matters” in setting priorities going forward.

A New Approach for a Changed World

Last fall, ON rolled out a revised strategy that outlined several new directions for the organization and repositioned its work in some intriguing ways.

While the Omidyar Network has long believed that markets can be a force for good, and still does, it’s now also looking at ways to move past neoliberalism and “reimagine” capitalism. According to a blog post Kubzansky published in October, ON is aiming to “build more equitable economies that rebalance the social contract among business, the state, and the individual.”

ON is taking a more critical stance on technology, too, after years of evangelizing the beneficial uses of technology to improve the world. Though it still embraces that faith, it wants to offset the negative consequences of new technologies and work to ensure that the drivers of “technological innovation are human well-being and respect for individual liberty.”

ON’s interest in responsible technology has already led it to fund work on surveillance and artificial intelligence, among other activities. It’s also keen to address the ways that technology “can be used to exacerbate tribal instincts and shred the social fabric.” This is part of another new effort it’s undertaking, which it describes as “building bridges in a pluralistic world.” Here, the Omidyar Network is looking to reduce the cultural divides revealed by the rise of illiberal populism. This is unfamiliar terrain for the organization, and Kubzansky says it’s still figuring things out. But one goal is to bring together diverse people and communities in “active dialogue grounded in mutual respect.”

In addition to taking on new issues, ON is looking to become a stronger advocate for its agenda. Last fall, it backed a state ballot initiative (in Maine) for the first time, and it plans to engage in more 501(c)4 giving going forward. This shift tracks with a larger trend that finds wealthy donors stepping up electoral spending in ways that complement their philanthropy.

“The Rules of the Game”

To be sure, much of ON’s revised strategy tracks with its previous work, and is “rooted in our DNA,” as Kubzansky put it. It will continue to mix impact investing with traditional grantmaking to empower individuals worldwide. And it has ambitious plans to use both market approaches and new technologies to drive change.

Still, ON’s more critical stance toward both capitalism and technology is striking. It reflects a larger awakening seemingly afoot among Silicon Valley philanthropists long criticized for their techno-utopianism and embrace of market ideology. These donors, many of whom are engineers by training, have often been seen as naive about larger matters of political economy—and downright dangerous in their faith that technology can solve tough problems.

Lately, though, more tech givers are tuning into issues they once glossed over, talking about the shortcomings of markets and warming up to a progressive community they once carefully kept at arm’s length. Some of these donors, like Craigslist founder Craig Newmark, are even supporting efforts to challenge the power of Big Tech.

Pierre Omidyar’s evolution has been plain to see on his Twitter feed over the past two years, where he’s inveighed fervently against Trump and the GOP. But even before the 2016 election, Omidyar had been investing in new ventures aimed at shoring up the foundations of modern liberalism. He set up the Democracy Fund in 2011 to address the deep problems in America’s electoral system and civic life. And in 2013, he bankrolled First Look Media to “empower journalists who hold the powerful accountable.” Its flagship publication, The Intercept, is a leading platform for progressive investigative journalism.

Now, the Omidyar Network—which is part of a small fleet of philanthropic entities created by Pierre and Pam, tapping a fortune estimated at $11.7 billion—is also evolving. It’s looking to focus “upstream on the rules of the game” that structure society, as Kubzansky put it, and engage in more policy combat if that’s what it takes to make those rules fairer.

A Different Kind of Philanthropic Entity

Pierre and Pam Omidyar first created their foundation after eBay went public in 1998, part of an early wave of dotcom-era winners who turned to large-scale giving. But they found traditional forms of philanthropy limiting. So in 2004, they formed the Omidyar Network as an LLC, with the goal of investing in social enterprises alongside grantmaking to nonprofits.

While hybrid entities like ON have now become more common, the organization had a lot of people scratching their heads during its early years—or gnashing their teeth. Pierre was sometimes referred to as a libertarian, and his promotion of for-profit microfinance approaches attracted controversy—including a 2006 New Yorker article about his rift with Nobel Peace Prize-winner Muhammad Yunus on this issue. A few years later, Omidyar would be held up as a leading example of a “philanthrocapitalist” by the authors Matthew Bishop and Michael Green. To many, the eBay billionaire’s embrace of market-based solutions to social problems seemed to exemplify how philanthropy was being reshaped by neoliberal ideology.

These days, though, the Omidyar Network’s impact investing strategies are much more widely embraced (and understood), including by leading progressive foundations like Ford. Meanwhile, the story of Pierre and Pam Omidyar’s philanthropy has continued to evolve—with much of that work conducted via conventional channels. Through the Omidyar Group, the couple manages seven organizations. Besides the Omidyar Network, these include the Democracy Fund, First Look Media, and Humanity United, which works on issues like human trafficking, mass atrocities and violent conflict. The newest of these groups is Luminate, which spun out of the Omidyar Network last year to become an independent organization working on what had been the priorities of ON’s Governance & Citizen Engagement initiative.

Still, the Omidyar Network remains the biggest island in what I’ve called the “Omidyar archipelago.” So far, it’s committed $1.4 billion to more than 700 organizations, with those investments roughly divided between investments in for-profits and grants to nonprofits. (In a recent year, the ON’s foundation arm made around $85 million in grants.)

Mike Kubzansky says that the Omidyar Network has a small but active board of directors that meets as often as five times a year. Pam and Pierre both serve on the board, but Pierre is more actively involved, with Pam focusing a greater share of her attention on Humanity United and another Omidyar entity, HopeLab. Kubzansky says that Pierre mainly engages on the big-picture issues facing ON, like last year’s strategic refresh, and he’s not involved in day-to-day grantmaking decisions.

Beyond Neoliberalism

Perhaps the most intriguing part of Omidyar’s revised strategy is its focus on “reimagining capitalism.” The leadership of ON remain strong believers in markets, but see the need for a new model of capitalism to ensure greater equity.

Over the past year, ON has become part of a conversation catalyzed by Hewlett Foundation President Larry Kramer among a small group of funders regarding how philanthropy can develop an alternative to neoliberalism. While this effort is still evolving, the idea is to support new long-term thinking and ideas generation to develop a “new, post-neoliberal political economy paradigm,” as Kubzansky puts it.

More immediately, the Omidyar Network is getting involved in labor policy and other economic issues. “Productivity has gone way up in recent decades, but workers haven’t shared in that,” Kubzansky says. Given the demise of labor unions, ON believes that new kinds of organizations are needed to empower workers. “There needs to be some way in the modern era that workers can organize and collectively advance their interests.”

The Omidyar Network’s new interest in labor issues is what got it involved in supporting the ballot initiative in Maine, which was aimed at improving the pay and career opportunities for home care workers. While the initiative was unsuccessful, Kubzansky says that ON plans further work on the “gig economy” and the larger challenge of creating a “21st-century social contract.”