B-School for Global Social Enterprise

Stanford's Graduate School of Business has received an unprecedented gift of $150 million to create a new institute to fight global poverty. The institute, called the Stanford Institute for Innovation in Developing Economies, is expected to put the renowned B-school at the forefront of a growing movement to fight poverty through social enterprise.

Stanford's Graduate School of Business has traditionally been among the handful of global business schools that regularly churns out its fair share of social entrepreneurs. With the new largesse, it may well become the B-school for global social enterprise. Stanford says that a key part of the effort will be to build an "on-the-ground" initiative that will help social entrepreneurs create organizations that make a real impact on the lives of the poor.

Robert E. King, a 1960 Stanford Business School alumnus who made the gift along with his wife, Dorothy, says, "It's not just a think tank. It's going to transform lives." The institute will train and support students to build for-profit social enterprises that make a grassroots impact in the developing economies to improve the lives of the poor. King, who is the founder of Peninsula Capital, and an early investor in the Chinese Internet search company Baidu, sums up the vision of the institute when he says, "More than a billion people live on less than $1.25 a day. That's just not right."

The exceptionally large size of the gift for a purpose that is usually not considered mainstream for a business school should help establish Stanford as the world's top business school for social enterprise. The school is already searching for three new faculty members with special expertise in developing economies to scale up its mission in this area. It will focus on social innovation and entrepreneurship as the key engines of growth that can lift people out of poverty.

Hau Lee, a Stanford professor who has been named the leader of the new institute, says, "The majority of our graduates and most business schools will focus on consulting firms and multinational companies, but the entrepreneurial spirit we try to instill in our students can steer some -- a small percentage -- to work with local entrepreneurs for the betterment of the under-served economies. That trend is happening. In the last couple of years, we have seen our own graduates go to India and other countries to build companies in irrigation systems and water purification. We hope this accelerates."