Social Capitalists: Profile

Social Capitalists

By Cheryl Dahle

By Fiona Haley

Benetech

Palo Alto, CA

Founded: 2000
Field: Technology
Budget: $0.7 million

"Our common belief is that information is powerful," says Jim Fruchterman, Benetech's CEO. "And we try to put information tools into the hands of people who really need them."

  • Entrepreneurship: A
  • Innovation: A-
  • Social Impact: B+
  • Aspiration: A-
  • Sustainability: B+

Benetech is an eclectic technology conglomerate that caters to the disadvantaged. In the 1980s, Fruchterman started a for-profit technology group that made reading machines for the blind. The company began with a million-dollar market that grew to $5 million in three years, as the company turned PCs into reading machines, allowing the price to drop and the capital to increase. In 2000, Fruchterman sold the business and started Benetech as a nonprofit to focus on new ventures with a socially conscious bent.

"People who are disabled, abused, poor, or illiterate need technology tools as much as or more than others," he explains. "When you start something new and nonprofit, you are usually providing some service that gives one hour of human time, which is impossible to replicate. In many cases, there is no substitute for that kind of program. Technology is really cheap to replicate. If you tackle a project well suited to technology, the technology works directly on the project people are facing."

Among Benetech's newest projects is Martus, a software program that helps human-rights workers document and store abuses with encrypted technology. Martus is Greek for "witness," and the program was created to act as an inviolable witness of human-rights abuses, and to protect human-rights workers from torture and violence. The program has backup servers that will put the information that workers want publicized onto the Internet. The rest is kept secret so that the program, not individuals, is held responsible for the information.

Another new Benetech project is Bookshare.org, which allows the visually impaired to download and listen to any of 15,000 books in seven languages. Books are scanned into the system by some of the 50,000 visually impaired people who use reading machines, and other users are able to listen to them. The goal is to grow Bookshare.org from 1,000 to 10,000 users in the next two years. In the works: a program that will help teens with disabilities learn to read, land-mine detectors for civilians, and wireless devices for the disabled.

"If your goal is to build something and sustain $500,000 to $1 million in revenue, you can do great work in a nonprofit, but you will be a flop in the high-tech industry," Fruchterman explains. "This is exciting work. Everyone tries to find something they like doing. More people should be doing this. It turns venture, incubation, non-profit, and technology into one."


benetech

Jim Fruchterman, Founder and president

A former rocket scientist, Jim Fruchterman founded Benetech in 2000 "with an explicit goal to continue to use the power of technology to serve humanity." Prior to Benetech, Fruchterman founded Arkenstone, a company that provided reading tools for people with disabilities. He also cofounded Calera Recognition Systems. In 2003, Fruchterman was named an Outstanding Social Entrepreneur by the Schwab Foundation and received the American Library Association Francis Joseph Campbell Award and the Robert F. Bray Award from the American Council of the Blind. Fruchterman has been active in public service, serving on two U.S. federal advisory committees. He is cofounder, director, and CFO for RAF Technology Inc. He is the chairman of Beneficent Technology Inc., Beneficent Inc., and Bengineering Inc. Fruchterman received degrees in engineering and applied physics from Caltech.


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