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From Oysters to Crowdsourcing

An American foundation supports the next generation of entrepreneurs in India and the United States.

Highways stretch across America’s central plains and Midwest farmlands, following the trails of early European settlers seeking a better life in the new frontier. Many of these roads pass through Kansas City, Missouri, which began as a trading port and supply station for west-bound wagon trains. With roots nurtured in the spirit of adventure and capitalism, Kansas City is a natural home for one of America’s leading organizations on entrepreneurship, the Kauffman Foundation.

Founded in 1966 by the late Ewing Marion Kauffman, today the foundation’s mission is to foster individuals’ economic independence through entrepreneurship and education, to develop a society of engaged citizens who then contribute to the improvement of their communities. Offering workshops, research support, mentorship programs, grants, online resources and more, the foundation with a $2 billion asset base today grew from the humble beginnings of a man with an entrepreneurial spirit.

Kauffman was born on a farm in Garden City, Missouri in 1916 and later moved with his family to a modest neighborhood in Kansas City. After serving in World War II, he returned home and worked as a pharmaceutical salesman. He quickly began earning more than the salaries of the company’s top executives, so they cut his sales territory in half. Again his hard work and natural sales ability paid off and his income grew, and again his territory was cut in half. Frustrated, he decided to start his own company.

“As a guy who believed in incentive alignment, he was pretty upset,” laughs Lesa Mitchell, the Kauffman Foundation’s vice president for advancing innovation. “Aligning incentives is everything in entrepreneurship.”

Kauffman began Marion Laboratories in 1950 in the basement of his family home, where he made calcium supplement pills out of crushed oyster shells he collected from area restaurants. Oyster shellsare not exactly plentiful in Kansas City. In addition, legend has it that the family’s washing machine was destroyed in the process of crushing the shells. But these challenges did not stop Kauffman, and with sales of $36,000 and a net profit of $1,000 in his first year, the company steadily evolved into a major player in the international health industry. By 1989, when he sold the company to Merrell Dow Pharmaceuticals, Marion Labs had grown to nearly $1 billion in annual sales with over 3,000 employees.

Some Current Projects

The project utilizes low-cost SMS messages in place of paper forms to enhance health services for HIV testing and follow-up patient services in Hubli, in partnership with the Karnataka Health Promotion Trust. Launched in 2009, this year’s student team from the University of Southern California is working to increase the number of trained staff and expand the capacity and impact of the program.

Mobilizing Health
Villagers will be connected to licensed doctors through quick and simple text messages. Already piloted in Udaipur, Rajasthan the University of Southern California team plans to help the program expand so that more patients can get immediate attention, diagnosis and treatment round the clock.

Crowdsourcing Challenges
A program of the Deshpande Foundation is being supported by a University of Southern California team, who will build a Web platform to ease communication between the foundation and applicants from around the world proposing projects for the Hubli-Dharwad region of Karnataka. The university students also aim to create a three- to five-minute documentary each week for the Web site , highlighting new challenges.

Kauffman believed that more people could succeed as entrepreneurs as he did. He dedicated his legacy and foundation to supporting innovation and education. Today, the foundation also works on advancing innovation through commercialization of university research. It also studies public policy and how it can be developed to best support entrepreneurship. Partnering with the U.S. Commerce Department’s International Trade Administration, the foundation has developed a clearinghouse to discover and share best practices in entrepreneurial leadership and grow the world’s economy: www.entrepreneurship.gov.

The organization’s focus on education can be seen through its Kauffman Scholars program, providing four years of college tuition to Kansas City middle and high school students from disadvantaged neighborhoods. Children are offered tutoring, counseling and mentoring throughout their high school years if they commit to keep on track for a university education. 

This program is modeled on the original founded by Kauffman himself in the 1980s. Called Project Choice, it was an unusual approach at the time to supporting the education of children from struggling families and communities. He began the program at his alma mater, Westport High School, where over 50 percent of students did not complete high school. The children were his priority, and often came to Kauffman’s office to meet with him and share good report cards and other successes. Within four years, the drop-out rate had been reduced to 25 percent.

Today, many programs around the United States are based on Kauffman’s early concepts, the results of which have been researched and documented by the foundation to share with other educational organizations. “Kansas City is an incubator for us, especially in education,” explains Mitchell. “When Project Choice began, it was one of the first of its kind. Now there are a number of similar programs across the country. We publish our findings and share them with other leading education organizations such as the Gates Foundation and the MacArthur Foundation. We’re continually building on the latest and greatest educational practices to put on the ground in Kansas City and around the U.S.” 

Over the years, the Kauffman Foundation has also reached beyond the U.S. borders to support entrepreneurship worldwide. In India, the foundation helps fund ventures such as the Global Impact Program in partnership with Stevens Institute for Innovation at the University of Southern California, and the Deshpande Foundation, a philanthropic organization with offices in Massachusetts and India supporting innovation, entrepreneurship and international development.

“The purpose of the grant is to build a program teaching students the skills to create innovations that promote entrepreneurship in developing countries,” says Elisa Wiefel Schreiber, communications director at the USC Stevens Institute. Teams of three or four students design nonprofit or for-profit projects in response to needs as outlined by Indian NGOs, civic activists, business leaders, academics and government officials at the annual Development Dialogue conference in Hubli, Karnataka hosted by the Deshpande Foundation.

“Students are put together in interdisciplinary teams and explore their own ideas for projects and also ideas identified by USC Stevens and the Deshpande Foundation. All proposed projects must be scalable and sustainable, and most involve local champions,” Schreiber explains. 

Juan Felipe Vallejo, director of innovation development at the University of Southern California’s Stevens Institute, sees the biggest impact for students as the opportunity and challenge to become entrepreneurs and run their own projects. “The students who come to us to participate in the program usually already know what they want to do with their careers; they have a social commitment and they’re innovative and they are interested in social entrepreneurship. Our program allows them to actually live that. Of course the benefit to the NGOs is also great: They can leverage the expertise and passion of the students to address issues of concern in their communities,” Vallejo says. “We’re grateful that the Kauffman Foundation has the vision to support us. For them, we’re an experiment. They help us learn what is the best way to formalize this kind of program and make it sustainable, so that if it’s successful it can be easily replicated somewhere else.”

In the field of social entrepreneurship, Kauffman’s Mitchell sees projects like the Global Impact Program, now in its third year, as an opportunity for both countries to learn from each other. “For one thing, India can teach us a lot about scale,” she notes. “In general, India is far ahead of most developing countries in understanding entrepreneurship, with educational systems in place, and a large number of for-profit ventures already on the ground. At a recent TiE (The Indus Entrepreneurs) conference in Bangalore, there were more than 1,700 participants—the largest turnout we’d seen by far. Indians get entrepreneurship, they embrace it, and they’re doing more of it than anyone realizes.”


Jane Varner Malhotra is a freelance writer based in Washington, D.C.