- Special Projects
Writing about the boss is always dicey.
News outlets have never been good about reporting on themselves due to obvious bias and conflicts of interest, real and perceived.
But after a lot of Pierre Omidyar’s money showed up behind two initiatives on the 2014 ballot, it became apparent we needed to get a little more up to speed on what our Omidyar cousins are doing in Hawaii. Civil Beat has always tried to stay arm’s length from other Omidyar-funded efforts for obvious reasons. It doesn’t matter what we write, there will always be a handful of critics who complain that we are Omidyar apologists. I predict that will happen with this story, too.
This piece is not intended to be a deep dive into Omidyar operations in Hawaii and what’s been accomplished or not. It is simply an attempt to lay out where the money has gone, an idea triggered by the $850,000 that went into the two ballot measures. Any investigative story ought to be done by someone who doesn’t work for the guy.
I’m actually a bit surprised no other media outlet has written much about the Omidyars in Hawaii. It’s a valid business story whether you buy into their vision or not.
It turns out that the Omidyars have pumped more than $100 million into Hawaii philanthropic causes and social-change projects since 2006 when they began calling Hawaii their home, according to a detailed accounting provided by Omidyar executives and fund administrators with the Hawaii Community Foundation.
That figure doesn’t include the money that has gone into operating Civil Beat or the $850,000 that was spent on the two ballot initiatives last year.
Pierre Omidyar acknowledges that’s a pretty healthy chunk of change for a single state, considering the Omidyar Group has given more than $1 billion to hundreds of organizations around the world. He says that he and Pam have always believed in supporting community foundations wherever they’ve lived, but Hawaii has become more of a focus because it’s the place the Omidyars have decided to stay put, at least for a while.
“Because we live here, because we want to raise our family here, because we see living here for decades at least … we see our futures here,” he says. “We want to invest to make this a better place to live for everyone.”
In 2009, the Omidyars gave $50 million to the Hawaii Community Foundation, a long-established funding source for hundreds of organizations in Hawaii.
That same year, the Omidyars launched the Ulupono Initiative, a for-profit investment firm that specializes in agriculture, sustainability and energy projects. Another $62 million has been spent by Ulupono including investments, grants and operating funds.
In addition to a short interview with Pierre Omidyar, I recently sat down with Mike Mohr, who is the managing director of Omidyar Group, and basically the man behind the Omidyar curtain.
Mohr has worked for the Omidyars for 15 years, since not too long after Pierre made his fortune creating the online marketplace, eBay. Although Mohr has a large hand in running the Omidyars’ worldwide network, he has gotten so involved in Hawaii that he recently sold his house in California and lives much of the time in the house he owns on our island.
While many people presume Pierre himself is intimately involved with decisions being made in Hawaii, both he and Mohr insist that is not the case. In fact, Pierre describes his role as simply high-level direction, his only involvement usually through occasional meetings in which he is updated on strategy.
That’s certainly how he operates with Civil Beat.
When I started here nearly four years ago, Pierre often sat at a desk in the corner, literally a spit-wad’s distance from me. He worked quietly on his MacBook, occasionally taking part in the newsroom banter and story gabfests, even a game of Foosball. But for the most part, he was an unobtrusive presence in the back corner of the room. He never tried to direct news coverage.
About a year ago, Pierre largely disappeared on us. He’s still in the building somewhere but he rarely shows up in the Civil Beat office anymore, focusing his attention instead on his new national media venture, First Look Media (also part of the Omidyar Group).
Although “impact investing,” as the Omidyars are known for, necessarily involves political maneuvering, last year’s elections marked the first time Omidyar money financed political campaigns in Hawaii in a big way. (Previously, state campaign finance records show, in 2007 and 2009 Pam Omidyar donated thousands of dollars to a handful of candidates including former Gov. Neil Abercrombie and former Lt. Gov. Brian Schatz but hasn’t contributed since. Mohr gave $500 to Kauai Mayor Bernard Carvahlo in 2008 but hasn’t donated since. Pierre Omidyar has no record of donating to Hawaii candidates, according to the state database.)
Pierre Omidyar is emphatic that Omidyar money does not go to individual candidates.
“We never support candidates, we work with whoever is in office,” he says, adding that the issues on the ballot originated with the organizations or efforts that Omidyar was already backing.
“We don’t come up with an agenda,” he says.
On the other hand, “we’re not going to shy away from promoting political solutions that address underlying needs that we believe in and that have community support.”
According to state campaign finance records, Ulupono nearly single-handedly fueled a group called the Local Food Coalition. That political action committee gave $500,000 in support of a successful ballot measure that will allow special purpose revenue bonds to be used for projects on all agricultural lands in Hawaii, not just those designated as “important,” as had been the case.
Additionally, the Omidyar Family Trust gave $350,000 to the Good Beginnings Alliance, a PAC that was pushing voters to approve the failed ballot measure that would have allowed public funds to be used for private preschools. Early childhood education is of particular interest to Pam Omidyar, and the family’s money has also gone directly to the state to fund two positions in the Executive Office on Early Learning.
The political contributions behind the ballot measures were not a philosophical departure but just the most effective way to use the money in a situation that was already unfolding. “It’s an evolution in our approach that was expected,” Mohr says.
Generally though, “we find ourselves helping in much quieter ways on some of the projects that have stuck,” he says.
Kelvin Taketa, president of the Hawaii Community Foundation, says the Omidyar money that has flowed through HCF has gone to hundreds of community groups, programs and projects.
He calls the family’s donations “catalytic,” noting that while the Omidyars are major funders they are not the only philanthropists in Hawaii.
“It has huge impact by encouraging other philanthropists to join together — not join with him necessarily — but to come together to make these things happen,” Taketa says.
Here’s a breakdown of where the Omidyar money has gone over the past nine years, according to numbers provided by Mohr and Taketa.
HCF manages the Omidyar Ohana Fund which has distributed about $41 million of the initial $50 million grant since 2009.
Part of the Omidyars’ early effort involved trying to improve collaboration among philanthropists, and the initial grant in 2009 came at a time when Hawaii was starting to feel the recession. The Omidyar fund provided about $2.3 million to what was known as the Hawaii Community Stabilization Initiative; 11 other partners donated an additional $2 million and another $23 million in federal assistance and services was leveraged. More than 10,000 individuals and families were helped through emergency housing, food assistance and credit counseling, HCF says.
The initial grant also has funded:
• Island Innovation Program: $2.4 million
This was a competitive grant program that was aimed at spurring innovation among nonprofit organizations in Hawaii.
• Pathways Initiative: $1.7 million
This program targets the homeless, vulnerable families, kids and the elderly, among other at-risk groups.
• Pillars of Peace Hawaii: $1.4 million
Pillars of Peace emerged into the public consciousness in 2012 with a visit of the Dalai Lama to Hawaii. The group brings to the islands high-level visitors — Bishop Desomnd Tutu has been here twice — who aim to inspire others to speak out about social injustice and build peace.
• Kapiolani Medical Center: $906,000
The fund has paid for building technology design and implementation at the hospital.
• Hawaii Community Foundation: $2.3 million
The Omidyars help HCF run itself, paying for general management and support.
Additionally, hundreds of smaller grants have amounted to about $7 million.
More than $600,000 has gone to various grants and programs supporting early childhood education and development in Hawaii.
But the Omidyar Ohana Fund has also spent $378,000 to pay for two positions in the state Executive Office of Early Learning, including the director. This is an agency that works on bringing together those interested in early-childhood education. The office is run by a board whose members are appointed by the governor.
In addition to paying for the positions, the Omidyar Group and Collaborative Leaders Network lend support, advice and expertise on early-childhood issues, Mohr says.
Interestingly, the Omidyar Family Trust heavily backed the failed preschool funding initiative on the November ballot, which then-Gov. Neil Abercrombie also supported. But current Gov. David Ige opposed it, as did the Hawaii State Teachers Association, the union that helped put Ige in office.
“We find ourselves helping in much quieter ways on some of the projects that have stuck.” — Mike Mohr, Omidyar Group
How will that political dynamic shake out now that Ige is in power?
Mohr notes that the executive office is not solely about preschool. Rather, he says, improving early learning is about a wide range of strategies.
Still, national experts on philanthropy say it’s unusual for a private donor to pay for state or local government operations. Occasionally philanthropists will build a building or pay for brick-and-mortar upgrades to crumbling facilities. But, they say, it’s rare to see a philanthropist funding positions in state government or steering money toward a government operation such as its IT systems, as Omidyar has done.
Taketa disagrees with this assessment and says, as someone who oversees local philanthropical efforts, he has seen private donor money going to pay for positions in state government, including within the state Department of Education and the University of Hawaii. “It’s not common but it’s not unusual,” he says.
The Omidyar Group has directed more than $6 million to the agency that is tasked with keeping the state’s computers running. Much has been written about how outdated Hawaii’s systems are — both Abercrombie and his former chief information officer have famously declared the state to be 30 to 40 years behind the technological curve.
The importance of efficient technology is not lost on Pierre Omidyar, who often describes himself as a technologist. So one of the first things the philanthropists realized needed fixing was the state’s technology.
Mohr likens the problem to the dashboard of a car. “If it can’t tell you how fast you’re going and how much gas you have in the car you’re not going to do very well driving.”
The Omidyar money was used to “kick-start” the state’s IT effort, Taketa says, including the creation of the Office of Information Management Technology. The money has gone into the assessment, planning and design of a state information technology program, including hiring the chief information officer, deputy CIO and key project managers.
Making sure Hawaii’s $13 billion-a-year government is being well-managed hinges on good back-end systems, and Mohr says it became apparent the state needed to hire someone who shared the vision for a world-class IT system and had the capabilities to put it in place.
Ultimately, Abercrombie chose Sanjeev “Sonny” Bhagowalia, who in 2011 came from the federal General Services Administration in Washington, D.C., to be the state’s first full-time chief information officer. But that was after Omidyar recruiters scoured the country for top talent and presented the governor with a short list. Bhagowalia has since returned to D.C. to be the U.S. Treasury Department’s CIO.
Mohr shrugs off the suggestion that the Omidyars’ investment in the position and tech improvements might have fallen short of expectations. “He was one of the top CIOs in the country so we knew it was for a limited time,” Mohr says.
He calls Bhagowalia “a visionary” who put a solid plan in place and hired people who could carry it out.
“Change,” notes Mohr, “is incredibly painful and incredibly slow.”
Taketa says the positions initially funded by the Omidyar grant have since been absorbed into state government and now the Legislature pays for those jobs. Once the Omidyar money seeded the IT effort, Taketa says, the Legislature appropriated another $120 million to improve the state’s technology systems.
The 15-month Omidyar Fellows program seeks to identify and cultivate emerging leaders in all parts of the state and, eventually, get them working together on civic initiatives throughout various business, government and community sectors, with a shared vision for making Hawaii a better place. The third class of about a dozen fellows is currently in session.
“I’m very encouraged by the signs of what the next generation of leaders look like here in Hawaii,” Pierre Omidyar says. “Imagining five years from now, 10 years from now, when these emerging leaders have more important leadership positions in the community I can see a much higher level of cooperation and collaboration happening in this community.”
CLN is comprised of seven leaders: Former longtime Hawaiian Electric Co. executive Robbie Alm, who is the president, and Peter Adler, Tusi Avegalio, Linda Colburn, Sam Kaner, Kem Lowry and Diane Zachary. They’ve helped facilitate meetings and studies involving renewable energy programs, Kakaako development and lobbying reform, among other things.
The network came together as the Omidyars initially went about setting up a philanthropical effort in the islands, according to Mohr, who says bringing about positive change involves identifying and supporting key civic leaders and influencers who can become “top facilitators.”
Ulupono is a for-profit company that invests directly in other for-profits as well as numerous nonprofits and social organizations, like Bikeshare. (Check out Ulupono’s website for a rundown of the numerous projects the company has put money into.)
Ulupono has been more in the news in recent months, making large, highly public investments in Honolulu Seawater Air Conditioning and the dairy industry. Among other things, Ulupono has committed $17.5 million to building Hawaii Dairy Farms on Kauai that aims to revitalize Hawaii’s dairy and cattle industry by developing sustainable agricultural practices like raising grass-fed beef. Company officials have also confirmed they are in talks to buy a dairy on the Big Island.
The Kauai dairy is opposed by some local residents, and a lawsuit was filed by the Grand Hyatt Kauai Resort, which is concerned that having a dairy nearby will hurt its business. To appease community concerns, Ulupono scaled back the initial size of the dairy from 1,800 cows to about 700 and plans to conduct environmental impact studies before moving forward.
In November, Ulupono announced it had become the majority investor in Honolulu Seawater Air Conditioning, a project that envisions pumping cold water from the ocean to be used to cool buildings in downtown Honolulu.
In addition to the money that goes directly to companies and projects, Ulupono has a fund administered by the Hawaii Community Foundation. That money included $200,000 to collaborate with numerous stakeholders and fund partners on a Freshwater Initiative, as well as more than $5 million Ulupono can tap to distribute as smaller grants for various efforts, according to Taketa.
The law center was created in 2013 to support journalists throughout Hawaii — not just at Civil Beat — who need help wading through public records and open meetings problems. It is funded directly by Pierre Omidyar and not through the Hawaii Community Foundation.
Brian Black, the executive director and sole attorney with the center, has won decisions requiring police disciplinary records to be made public, as well as financial disclosure reports filed by members of some state boards. Both of those cases are on appeal.
Black, a registered lobbyist, has also organized local journalists and government watchdog organizations into a working group to tackle much broader issues of government transparency in the state.
In addition to those key organizations, the Omidyars also built a wing at Punahou School called the Omidyar K-1 Neighborhood. They invested $5 million through HCF to launch construction of the project, which is a state-of-the-art building using green technology known as LEED — Leadership in Energy and Environmental Design Standards. It incorporates renewable energy and sustainability elements that teach the kids about conservation and waste management.
Pierre is on the board of Punahou School; Pam is on the board of Hanahauoli School.
Pam Omidyar has also donated separately to the Polynesian Voyaging Society whose two Hawaiian voyaging canoes — the Hokulea and the Hikianalia — are on a worldwide mission of peace and aloha.
Pam, a biologist who did graduate studies in plant molecular genetics, also gave $1 million in 2006 to the Hawaii Institute of Marine Biology at the University of Hawaii.
In addition to the $50 million grant in 2009 to the community foundation, the Omidyar network gave more than $3 million from 2007 to 2009 that HCF distributed through various grants and smaller programs.
Beyond their philanthropic efforts, the Omidyars are behind a company called Ohana Real Estate Investors. It’s based in California and owns the Montage Resort portfolio, a luxury hotel development company in which Pierre Omidyar is the principal investor.
In Hawaii, Ohana Real Estate Investors is developing what’s become a controversial resort and luxury home development at Hanalei Bay on Kauai. The company bought the 600-acre property known as Hanalei Plantation for $75 million in 2007, according to published reports, and is facing opposition from local residents who are concerned the development will change the character of the area and cause environmental problems.
Other than the two Kauai projects — the resort and the dairy — Omidyar efforts in Hawaii have been relatively free of controversy.
“My sense is that things are going well,” Pierre Omidyar says, “that the status quo is always difficult to change. There’s a lot of inertia behind things that have been done in Hawaii in a certain way for a long time.
“As a local philanthropist focused on addressing the immediate needs of people who are going through crisis, I think that part of the work … has been very effective.”