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A Perfect Partnership

A Perfect PartnershipIn their alma mater, eBay founder Pierre Omidyar and his wife, Pam, have found a partner who is uniquely poised to help them further their mission to change the world through microfinance.

Medford/Somerville, Mass. [11.07.05] A decade ago, Tufts graduate and trustee Pierre Omidyar (A’88) changed the world when he launched eBay, a first-of-its-kind online marketplace that has become a booming, billion-dollar business. Now, the tech entrepreneur with a strong belief in microfinance is trying to change the way the world does business once again. This time, he has turned to Tufts to help him prove that for-profit business can make the world a better place.


Related Coverage:

$100 Million Gift Puts Tufts On Cutting Edge



“We ought to be looking at business as a force for good,” Omidyar, frequently described as both a pioneering businessman and innovative philanthropist, told USA Today.

To demonstrate the possibilities in this area, Omidyar and his wife Pam (A’89), an advisor to the University College of Citizenship and Public Service, committed the largest single gift in Tufts’ history – $100 million - to create the Omidyar-Tufts Microfinance Fund. In aggregate, the Omidyars’ philanthropic commitments to Tufts exceed $143 million.

The new fund will make loans to banks and other microfinance institutions, which, in turn, will make “microloans” to poor heads of households in developing countries so they can start their own businesses. At the same time, half of the income from the fund will enable Tufts to advance several key programs for faculty and students, including financial aid and debt forgiveness for graduates who enter the public service field.

For Tufts, joining forces with the Omidyars to invest in international microfinance initiatives is a strong fit, according to President Lawrence S. Bacow.

“I think what we are doing here is absolutely consistent with our mission as an institution,” Bacow said in USA Today. “Partnering with the Omidyars is a strategic fit for Tufts on many levels,” he added in The New York Times.

The Wall Street Journal noted that the partnership was about a year in the making. “Mr. Omidyar later approached [President Bacow] with the idea of creating the microfinance fund, emphasizing that not only would Tufts benefit by receiving income on the investment, but that the university would be creating a new type of investment that would appeal to other institutions,” the Journal reported.

Newspapers including The Boston Globe and USA Today pointed to Tufts’ unique collection of schools as evidence that the University is well-poised to partner with Omidyar in the initiative.

“Tufts, home to the prestigious Fletcher School for international affairs and the new University College of Citizenship and Public Service, prides itself on internationalism and commitment to playing a positive role in the world,” reported the Globe.

While helping the world is an important objective of the Omidyar-Tufts fund, the Omidyars and Tufts are also equally committed to proving that microfinance is a viable institutional investment strategy. Tufts’ Chief Investment Officer Sally Dungan told BusinessWeek that the University aims to achieve the same nine percent return rate on that fund that it has set for the rest of its endowment.

“We need to make this work,” she told The Chronicle of Higher Education because “Tufts has an ‘opportunity to be in the forefront of the market.’”

And through this joint venture into microfinance, both Tufts and the Omidyars also have an opportunity to improve the quality of life for millions living in poverty in developing countries.

“It’s a fundamentally different way of looking at how to make a social impact,” said Omidyar to the Wall Street Journal. “It’s using business as a tool to make that happen.”


Past E-News Coverage: Omidyars Invest In Active Citizenship, Public Service At Tufts

Omidyars, eBay Founder, Invest $10M in New Tufts University Program

"From Self to Society: Citizenship to Community for a world of change"

Omidyars To Deliver Commencement Address

 

 

 

 

 

 

 

 

 

 

 

 

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