The Irish Independent
Dec. 14, 2002
A little barefoot girl stands for hours in the rain by the side of a muddy track in the Ethiopian highlands, clutching a bunch of four little flowers. She’s come to meet the man whose philanthropy means she can go to school, in her own village. When his four wheel drive finally bumps down the rutted track she shuffles forward, shyly, but smiling a wide happy smile, to give him the flowers. By now the blooms are drooping and not a little bedraggled but they provided Dubliner Philip Berber with one of his most wonderful experiences, the memory of which he will take to his grave. Life, he thought then, just gained a new meaning.
Berber is not a Christian missionary, actually he’s a Jew. He doesn’t work for any of the organisations one automatically associates with Third World development. He is a dot.com multimillionaire; fabulously wealthy, so rich he cannot possibly spend all of his money and still lead a relatively normal life. But he balked at giving some of his money to charity when he realised that, depending on who he gave it to, as little as one tenth of it could end up with the needy. Some charities had expensive overheads, spending large amounts on publicity to solicit donations, and troops of well-paid workers. He discovered there was a saying in Third World circles that with every dollar you got ten Americans plus their bureaucratic counterparts in the recipient countries. He also came across numerous instances of aid being diverted by dictators to the building of prestige projects which had no impact on the lives of the poor; the Third World, it seems is littered with dual carriageways from the airport to the president’s palace while the citizens make do with mud tracks.
Donna, his English wife, especially wanted to contribute towards the poor in Ethiopia and so the idea of A Glimmer of Hope was formed in March 2000 in Austin, Texas, where Berber has lived since selling one of his companies to US owners. If you don’t like the way other charities do things, why not start your own? A Glimmer of Hope is not like a traditional charity. He describes it as a pipeline, a conduit that funnels cash direct to the people who need it, bypassing armies of bureaucrats and the rapacious demands of corrupt dictators. The Berbers were not alone in spurning traditional mechanisms for spending their cash. The Internet generation is bringing the principles of venture capital to philanthropy and innovation is the name of the game. Microsoft billionaire Bill Gates is personally funding a massive inoculation programme of Third World children. Other philanthropists, like George Soros, the currency speculator who almost bankrupted the British Treasury, are equally dismissive of traditional methods of giving and, like Berber, have formed their own aid organisations. Ted Turner, who made his billions from the CNN news network, gave $1 billion to the United Nations when the US Government failed to pay its share.
The son of a South Dublin clothing manufacturer, Berber attended national school in Booterstown, went to Wesley College in Rathgar and then attended UCD where he took his B.Comm. For the first few years, his career mirrored that of dozens of his classmates, gaining experience by working for big-name multinationals like Ford and Avon prior to making the leap into senior management. But in 1985, Berber’s career took an acute swerve, not into the executive suite, but into the risky world of high tech start-ups.
He had already met Donna, the pretty English girl he was to marry, and who was to play such a pivotal role in his life. Accounts differ as to how they met. According to Philip, she accidentally jostled him at a disco and spilled his drink. Her version places them in the same venue, but blames him for spilling his beer all over her. They agreed to date and went out the following day. It was not a success, “a very flat date” as she recalls, and Donna she couldn’t wait for the date to end. Two weeks later they met again by accident and, perhaps freed of the pressures of doing all the conventional dating stuff, they clicked. “Hey, he’s not so bad after all,” Donna recalls thinking. “It was like being with each other for the first time.” After that they were virtually inseparable, moved in together, and later married. One thing is sure, she didn’t marry him for his money.
An early recognition of the fact that computers and computing were about to change the world dragged him away from a comfortable, assured, executive career. He swapped the boardroom for a converted garage, and even his son’s bedroom. There were good times, and bad. At times he had to borrow money to pay the rent and once famously used his son’s computer because he couldn’t afford to buy his own. Another time, on the eve of a major presentation, he was alarmed to discover the software his team had developed just didn’t work. On more than one occasion, as the bills mounted, Donna suggested he resume a salaried career, suggestions which came more frequently, and plaintively, as their family started to grow.
His forte was developing artificial intelligence software to drive financial and investment decisions. The inspiration for one company, Financia, which developed software to guide currency investment decisions, was gained after watching a demonstration of technology to track enemy submarines. If computers could predict where a submarine might go, or predict the path of a missile, why not forecast investment markets? He sold Financia in 1991 and the Berbers moved to Huston, Texas where Philip managed the company for its new owners. But the start-up bug was soon biting again and he again quit a life of relative comfort to start new companies.
“Whatever way I’m wired, I get a kick out of turning things around and looking for a better channel of distribution, a more efficient means of getting the job done, whether that is buying and selling stocks over the internet or getting aid delivered to the regions in the heart of Africa.”
“He’s very driven, very goal oriented, always able to see the big picture and get things done,” adds Donna.
Philip credits his father with imbuing him with the entrepreneurial drive. “My father always worked for himself. The independent businessman was the only background I knew,” he said. “I watched him run his factories in Dublin and I think that’s where the entrepreneurial spirit came from.”
He started GK Capital, which developed software for predicting currency markets. Then, in 1995 he started CyBerCorp, a company that aimed to produce software which could enable anybody to buy and sell shares using the home computer in their living rooms. At the beginning, cash was tight and Donna was his bookkeeper. For the first time, the ordinary citizen could play the stock market on the same terms as Wall Street moguls because they were gaining instant access to the same accurate information, which drives investment decisions on the DOW and the NASDAQ. Buying shares suddenly became as easy as buying a book or a CD on the Internet.
CyBerCorp revenues grew from $500,000 in 1996 to $4.5 million in 1998 and to $24 million in 1999 and employed almost 300 the following year. It differed from many dot.com startups because, not only did it have turnover, it was also making profits. By then, day trading, as it became known, was becoming a regular feature on the Internet scene, and CyBerCorp attracted hefty bids from its competitors. Berber turned down one $300 million bid but in March 2000 succumbed to a $500 million offer from Charles Schwab, another pioneer of on-line trading.
Suddenly Donna and Philip were sitting on more money than they
could spend. They agreed to place $100
million aside in a special investment trust and use the income
from it for charitable purposes.
Donna visited the Ethiopian Embassy in Washington to see how the new Berber fortune could help. She had friends who had just adopted Ethiopian orphans so she was aware that it was probably the poorest and the most backward country in the world. But she was unprepared for the graphic descriptions of hardship and misery which she heard from the Ethiopian diplomat responsible for the co-ordination of aid to his country. By the end of the meeting, both of them were crying, she admits. Impressed by his passion, she later recruited him to work for A Glimmer of Hope, heading up its Addis Ababa office.
While Donna selected the projects they would fund, Philip relapsed quickly into his entrepreneurial role but instead of a new high tech start-up, and freed of the need to earn a living, he probed new ways of giving to the Third World. “To me the process is similar, not accepting what others tell you, looking at the information you have and trying to synthesise it in a different way by building a better model, in my case, a better model of international aid.”
“We learned much about the power and the prestige and the corruption in the aid business. We chose to work with governments, not through them. We opened our own office in Addis, we send our aid and support directly into the regions and not via the central governments. We have our own financial controls.”
Berber didn’t want to repeat the mistakes of the past but, on the other hand, he also knew it would be impossible to reform corrupt governments or bloated agencies. He describes the United Nations and the World Bank, for example, as bureaucratic, monolithic, cost consuming channels of distribution.
“Generally between 15 and 50 percent of government aid reaches the intended recipients. Non Government Organisations would send between 50 and 85 percent of the cash. We did not feel at all comfortable about mailing a cheque in that direction, knowing that so much of the money was going to get washed away and intercepted by middlemen. We decided to build a better mousetrap, a more effective model of international aid. We’re like the commandos. Our projects are suggested by the local people, not by someone in an ivory tower thousands of miles away.”
Philip and Donna started by visiting the regional development organisations in Ethiopia.
“They looked at us as if we had two heads. I don’t think they understood or believed what we said because they had become so dependent on the old way of doing things. But after about 18 months they discovered that we did what we said we would do. When we say we will send the cheque we will, provided they have met their own goals. We ask the people what they want rather than what we say they want.”
The money soon started to flow into hospitals, local water supply schemes and schools, a total of 141 projects so far in Ethiopia. Berber says that, because of the approach he has taken, he has encountered no problems with corruption, a statement other aid workers say they find hard to believe. “Ethiopia is one of the most repressive and corrupt places on Earth, where you need permission just to cross the road,” said one Irish aid worker. “He must have cut a special deal with the government to be able to operate unhindered. We find it very difficult to do a lot of work, no matter how bad things are.”
Another aid worker points to Bob Geldof in 1985 trying to spend the Live Aid cash without incurring large administration costs. Geldof learned the hard way that a certain amount of overhead is essential if, as he discovered, you are not going to have money wasted by discovering that you cannot use the trucks you have bought to deliver all the aid. “There’s a certain amount of naivety in all of this and I wonder if sometime in the future he’s not going to end up giving money to NGOs because that’s the most efficient way of doing it after all.”
Berber remains convinced that he has arrived at a new formula for channelling aid to those who most need it. But he, says, it will not remain frozen in place but will evolve as circumstances dictate. The original concept, for example, was for an organisation entirely funded by the income from the Berber’s trust fund but already they have started to make changes. Other wealthy denizens of Silicon Valley are being approached to see if they would like to channel their charitable bequests into the Glimmer pipeline.
“We have now decided to regard our investment as the seed capital, rather than the only capital and are offering other wealthy families and the public the opportunity to piggyback on our pipeline into the heart of Africa,” says Philip Berber. “They will do so with the knowledge that 100 percent of the funds will get to the people in the projects.”
Both Donna and Philip have come to the realisation that their cash is only scraping the surface of the Ethiopian problem and much more is needed. Both regularly quote a recent comment by Bono, made on the Oprah Winfrey show, which ran: “Africa is a continent going down in flames while we stand around with a watering can.”
And, in another of those adroit swerves for which his career is noted, Philip Berber is now devoting a lot more time to inner city problems, in Austin, and in London. Some A Glimmer of Hope funds are being released to projects designed to wean youngsters away from a life of delinquency and into a trade. In one project, for example, kids who once may have stolen vehicles to go joyriding, but who sign up to train as car mechanics, are given motorcycles to ride at the weekends. In another project, people needing a house built are asked to allow disadvantaged youth do the job so they can learn useful skills.
“Hunger is the same thing the world over, whether it’s physical hunger, or emotional hunger, it’s painful”, said Donna. “One of the saddest things is to watch kids give up hope because they don’t see the point of making any more effort,” adds Philip.
This story started with Philip Berber’s vision of African hope. Here’s Donna’s.
They had journeyed to a remote village to perform a little ceremony of turning on the new clean water piped supply they had funded. Life for women in the area had not changed for hundreds of years and they often trudged for six or eight hours at a time, fetching water in massive clay jars they strapped to their backs with thin cord which pressed uncomfortably into their breasts. Donna could barely lift one empty, let alone full. To compound their misery, the water they fetched was often contaminated and sometimes made their families very sick. Some even died.
As Donna turned on the tap for the first time and clean water gurgled out she was looking into the eyes of the Ethiopian woman beside her and realised that for that woman, a miracle was happening right there. From now the most she had to go for water was 30 minutes, not several hours,
“I looked into her eyes and I knew her life was being altered exponentially in that moment, beyond any comparison we can make. Suddenly that simple tap held out the promise of that woman being able to spend more time with her children, get them educated even, because she didn’t need to walk so far and so long for water, the promise of being able to grow healthy vegetables, the promise of her children not getting sick from contaminated water. I saw those things in her eyes, and I made a connection, woman to woman, and mother to mother, and I knew that both our lives would never be the same again.”