Silicon Valley One - Summer 2008 - (Page 17) Bernard “Bernie” Newcomb’s name may not be familiar to most people, but the doors he helped open are. More than 25 years ago, Newcomb and Bill Porter founded the online discount stock brokerage firm E*Trade, which allowed average folks to buy and manage their own stocks, opening a new world of financial empowerment. But Newcomb is more than just another Silicon Valley success story. Newcomb was born with congenital cataracts and is legally blind. But that never seems to have deterred him. Asking not for sympathy but an opportunity, he excelled at the public schools he attended in Scio, a small town in western Oregon. Upon graduation from Oregon State University, he discovered that many firms would not hire him because of his blindness. Yet he persevered and landed a job as a data processor, in which he flourished. In 1980, Newcomb met Porter, a businessman with an idea that the personal computer—then in its infancy— could be used to buy and sell stocks. They became partners and formed a company called Trade*Plus, which evolved into E*Trade. Today, Newcomb lives in a cozy Craftsman on a leafy street in Palo Alto. Community foundation CEO Emmett D. Carson and ONE Editor James Daly visited Newcomb at his home to talk about his personal vision for philanthropy. It’s a wonderful idea: Give now to see the benefits and rewards firsthand. For instance, I am blind, so I never got to play sports. But, still, I was allowed to serve as the water boy, which I loved. So one of the first things I did was buy my old high school a new football stadium with 550 seats, an all-weather track, lights. I grew up in a tiny little poor town where they could barely upgrade the school physically. There wasn’t anything in the budget for athletics or after-school stuff. So we built them a really nice little stadium, and now they are having state track meets there. It’s great fun. Let’s talk about E*Trade, which changed the nature of how the individual interacts with big finance. That represented a very fundamental change. How do you see the relationship between private investors and large corporate finance evolving over the next few years? Well, E*Trade changed the landscape entirely because suddenly anybody could do their own financial research, their own way. In the days before E*Trade, you wandered into an office of a broker and opened an account and relied on that broker to tell you what to do. Suddenly, you had everything available to you. So individuals were willing to put in their time and trouble into this decision-making process. I see that continuing and growing. Imagine, for instance, a group of people who band together and form some sort of venture capital company. They met over the Internet, and they’ve never seen each other. Yet, together, they can amass enough money to start real things. They might give the [venture capitalists] up on Sand Hill Road a run for their money. What inspired your philanthropy? I guess I have always been surrounded by generous people, so it just seems natural. If you have all the resources you need to live comfortably, have everything you want, and there is some money left over, it’s just natural. What else are you are going to do with the money? I would just as soon donate my money now, while I’m alive, to see what happens and what good it can do. Maybe that money can even help those who had helped you. In fact, my main goal [when donating] is recognizing the people that helped me get where I got and multiply that several times, so the next generation can have the same opportunity that I did. What’s really great about philanthropy while you are young, or at least before you are dead, is that you get to see the benefits of what is done with the funds. It’s not an ego thing. It’s a satisfaction thing, and it’s really satisfying to see some of the results of things that you helped happen. Do you think the model you pioneered with E*Trade has implications for philanthropy? That’s an interesting point. I think it certainly could. I believe that E*Trade got people thinking about saving, and so I would hope that people who have the means to donate philanthropically get started with their plans earlier in their lives. So an E*Trade-like service that got younger philanthropists educated would be a really great idea. I think it’s the next great thing. robert houser What philanthropic issues resonate with you? My main interest is helping people receive an innovation through philanthropy c o n e 17
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