I'm not the first blonde to find herself standing with eyes closed in an office in Beverly Hills, eager to be manipulated by a Hollywood executive. "Hold out your hands," says Jeff Skoll, founder of Participant Productions, the film company behind Good Night, and Good Luck, Syriana, and An Inconvenient Truth. "Now, imagine that your right hand is holding a heavy book. Your left hand is attached to a helium balloon." When I open my eyes, my hands are about six inches apart—a hypnosis test indicating some, but not extreme, suggestibility.
Former eBay president, Forbes's 114th richest man, and an internationally lauded philanthropist, Skoll has also been an amateur hypnotist for almost 20 years. He first picked up an old paperback on the subject while backpacking around the world after college; his first subject was a girl in an Australian youth hostel. The hobby turns out to be unexpectedly revealing of the man: Defiant of cynics and skeptics, a little goofy, mysteriously focused, and possessed of undeniable influence, Jeff Skoll wants to change your mind.
If Skoll's life ever becomes an inspirational biopic a la Gandhi, one of his favorite films, the opening credits will roll over a montage like this: Toronto boy with his nose stuck in The Fountainhead and Brave New World, young man strolling under the oaks at Stanford business school, 31-year-old sitting in the living room of a group house writing the first business plan for eBay, 36-year-old retiring in 2001 with a personal fortune now estimated at $5 billion. His short tech career was followed by an equally brilliant entry into philanthropy. The $600 million Skoll Foundation, with its Skoll World Forum and Skoll Centre at Oxford's Said Business School, stands at the heart of the social-entrepreneurship movement, which combines the best of the business and nonprofit worlds. The foundation's mission is to fund innovators who are tackling the world's biggest problems—from housing AIDS orphans in Africa to developing new drugs for infectious diseases—with a self-sustaining approach.
For the past few years, though, Skoll has yielded control of the foundation's day-to-day operations as he pulled up stakes from Silicon Valley to Southern California to conquer yet another industry. "When I started this, I kept hearing the same phrase over and over: 'The streets of Hollywood are littered with the corpses of people like you who think they're going to come to this town and make movies,'" Skoll recalls with a crooked grin. "It was almost like, Is that written somewhere? Because it was literally word for word."
Participant Productions is the first film company to be founded on a mission of social impact through storytelling. But it's no charity. It's a pro-social commercial operation, a hybrid emblematic of the social-entrepreneurship movement. "Ultimately, the goal here is to build a brand around social relevance in media," Skoll says. He staked the company $100 million for its first three years; every script is evaluated equally on its creative and commercial potential and its ability to boost awareness of one of six issues: the environment, health, human rights, institutional responsibility, peace and tolerance, and social and economic equity. For each project, Participant execs with nonprofit backgrounds reach out to public-sector partners, from the ACLU to the Sierra Club, for their opinions. If those partners don't think they can build an effective action campaign around the film, it's a no-go. At the same time, "It can't be good-for-you spinach, or it's not going to work," says Participant's president, Ricky Strauss, a former production and advertising exec at Columbia and Sony Pictures Entertainment. "The more mainstream the story, the more opportunity to make an impact."
In the face of challenges ranging from global warming to threats to civil liberties, Skoll aims to inspire hope, then action. "Time and time again, you see this outpouring from people once they're made aware they can do something," he says. "That's the principle that drives this company."
Now, less than three years since it was founded, Participant has gone from an unknown quantity to the force behind some of the most talked-about films of 2005 and 2006. Syriana (which took on the oil industry), Good Night, and Good Luck (McCarthyism and freedom of the press), North Country (sexual harassment), and the documentary Murderball (living with a disability) garnered a combined 11 Oscar nominations, with one win. An Inconvenient Truth, better known as "that Al Gore movie," scored international headlines and sold-out opening audiences.
The industry, however, took a while to catch on. "After we had the premiere of Good Night, and Good Luck, one of my favorite films that we've done," says Skoll, "one of the, uh, let's just call him an industry luminary, puts his arm around me,"—he mimes a meaty embrace—" and says, 'Good film, good film, I really liked it...but you know it's not going to be Harry Potter, right?'" Skoll laughs. "We really missed that opportunity, doing the [Edward R.] Murrow bobblehead doll!"
The next headline-grabber will be October's Fast Food Nation, a feature-length adaptation of the best-selling expose by Eric Schlosser. Participant worked closely with British producer Jeremy Thomas to bring the book to the screen, with Skoll serving as executive producer. Of the sprawling social allegory, directed by Richard Linklater and featuring Ethan Hawke and Patricia Arquette, Schlosser says, "It's a very tough, uncompromising film. It doesn't sugar the pill." Schlosser's also bullish on Participant. "Every terrible greedy cliche you hear about Hollywood is true. [But Participant is] totally, fundamentally different. I'm not saying that Jeff Skoll is a saint, or he's superhuman, but he started with the right intention and has carried through on it." Fast Food Nation has already drawn coordinated counterattacks from the restaurant industry: Months before the film's release, an "astroturf" (fake grassroots) Web site called "Best Food Nation" appeared to try to counter the PR fallout ("Myth: Fast food offers dead-end jobs. Fact: Actually, fast food offers opportunity and experience"). McDonald's wrote in an internal memo that it was considering dispatching a "truth squad" to "set the record straight."
Participant's idealism may actually be its ace in the hole from a business point of view. Despite challenging content, all its movies so far have been profitable except the dour North Country, which starred Charlize Theron. Syriana, made for $50 million according to tracking service Box Office Mojo, grossed $93 million worldwide. Good Night, and Good Luck, made for just $7 million, grossed $32 million in the United States alone. An Inconvenient Truth did $17 million at the box office in the first eight weeks. Those aren't Harry Potter numbers, either, but outside Hollywood, that's a real business.
How have these anything-but-escapist movies made it? Here's the first secret of pro-social business: When you give outstanding people the chance to work on something they care passionately about, often you get a great result. "A-list talent is attracted to stories that matter," says Ricky Strauss. "There are more opportunities to have people give their all." Plus, the talent comes cheaper: Skoll points out that George Clooney took $1 to write and direct Good Night, and Good Luck. And quality attracts quality. Now that Participant actually has a track record, it's taking in an average of 150 scripts a month, and stars are lining up with pet projects. The coming season, details of which were scarce at press time, will bring at least two documentaries and three new features, including one starring Terrence Howard, coming off his Oscar nomination for Hustle & Flow, as Supreme Court Justice Thurgood Marshall. When I ask Skoll if the other stars will be as big as the likes of Clooney and Theron, he just points at the ceiling. Bigger.
Here's another not-so-secret Ben and Jerry know well: Customers are attracted to a good product wedded to a sincere, virtuous mission. The social campaigns that generally roll out on the Web site Participate.net with the release of each movie also function as very smart marketing campaigns for the age of the blog. For example, the progressive political organization MoveOn.org promoted a "See the Truth" campaign to its 3 million members; more than 200,000 people pledged online to see An Inconvenient Truth and buy tickets for friends on its opening weekend to help it get picked up by more theaters. Truth was the most profitable film per-screen for a couple of weekends after its opening. Try pulling that trick with Pirates of the Caribbean 3.
Then there's a third key to what Participant is doing. Just as Whole Foods did with organic broccoli, it's expanding and building a brand around an existing niche market. The "prestige picture" or "problem picture" has been a staple from Guess Who's Coming to Dinner to All the President's Men to Schindler's List. These have always been the serious films that the big names earned the right to make, and some of them were even blockbusters. But because they tended to be labors of love, rather than hewing to the formula for Hollywood success, they took longer to incubate. "Richard Attenborough told me that Gandhi took him 20 years to make," Skoll says.
In general, serious is hot right now, from up on Brokeback Mountain, to Fahrenheit 9/11, to the muckraking, shoestring documentaries by Robert Greenwald like Outfoxed and Wal-Mart: The High Cost of Low Prices. Skoll and Strauss hope their success in building an umbrella brand for such films makes it easier for similar projects to get backing at other studios. "Hollywood is pretty risk-averse," Skoll says. "And by taking away some of the financial risk for the studios, we get some of these movies made that might not have been made." In fact, two of their projects, Syriana and North Country, were rescued from turnaround at Warner Bros.
This illustrates yet another principle of social entrepreneurship: finding and working with the right partners. Just as the nonprofits help connect with audiences, major studios like Warner Bros. and Paramount are listed as coproduction companies, sharing costs and development and distribution duties on nearly all of Participant's films. By the same token, Skoll built the company by hiring insiders like Peter Schlessel, formerly of Columbia, and he's worked with fellow forward thinkers like Mark Cuban, another tech billionaire and multifaceted media magnate who owns production companies, distributors, and the Landmark theater chain.
In the end, what makes Participant stand out is more than its do-gooder philosophy. "In my history, especially in the eBay days, I learned how important a brand really can be to the long-term efforts of a company," Skoll says. This may sound like Marketing 101, but it's news to the movie industry. Skoll and Strauss both point out that true brands in Hollywood are few and far between, besides Sundance, Miramax, and, of course, Disney. At a time of slumping movie audiences and increased fragmentation in the media industry, Skoll's vision is to build a company integrated across several platforms—movies, TV, and the Web. "Eventually, I'd like this to be a full-scale media company."
Still, while its vision is clear, "there's a challenge inherent in what we're doing," says Strauss. Picking films that will both be green and make green can be hard. "I don't know if I've ever said this publicly," says Skoll, "but when I started, the very first submission I got was the script for Crash—and I turned it down. I said, 'Hmm, this project has to be done just right, because if it's a little off, it's going to offend a lot of people.'" The film about racial clashes on L.A. highways, of course, went on to score the Best Picture Oscar.
A more fundamental problem facing Participant goes to the heart of its mission: How do you measure social impact? Participant and the nonprofit partners it works with on each film set their own internal goals—the number of emails sent to Congress, say—but these are modest and, frankly, pretty uninspiring compared with the world-changing rhetoric. "Ironically, the most successful campaign, we think, was the campaign we had around North Country, which was our least successful film commercially," says Skoll.
An Inconvenient Truth will be the biggest test to date to see if a film backed by the best possible combination of free media and online organizing can really budge the political consensus. The movie got made because Skoll and Davis Guggenheim, then head of Participant's documentary division, attended a private L.A. presentation of Gore's original slideshow in May 2005. "So after the [presentation], we literally all went off in a room, and I felt it important that his message get out to a bigger audience as quickly as possible, so we agreed on the spot that we'd fund the film, Davis agreed to go off and direct it, and that was it." The film premiered at Sundance just seven months later. "When we did it, I thought it was going to be a charitable initiative and go right on PBS," Skoll says. Without him, it might well have.
There are signs that the film and its barrage of coverage have helped shift the conversation about global warming, all but closing the debate on the underlying science. Yet neither the film nor the Alliance for Climate Protection, a brand-new bipartisan coalition that reaps some of the proceeds, is tied to any particular proposal or bill. That's because, as Gore often says, there's a frustrating gap between what is possible in our current political climate and what it will take to forestall damage to the real climate. The solution will ask a lot more of ordinary citizens than going to see a movie, even a great one.
But Skoll remains hopeful. He explains why with a sort of eye-of-the-needle parable about a rich friend who'd retired to simply play golf and live the life. "He said, 'Well, I think the world's in terrible shape and so I just want to have a good time, take care of my family, enjoy my friends, and that's it.' And I said, 'How can you feel that way if you really love your kids? Don't you want to make the world better for them?' He said, 'Well, take the Middle East. If you can show me there's any hope of resolving that, maybe.'" As it happened, in the spring of 2005, Skoll, in his spare time, had Gandhi dubbed into Arabic and started hosting screenings in Palestinian refugee camps, some with Sir Ben Kingsley in attendance. The ultimate goal is to have a million people in the Arab world learn about a hero of nonviolence. "My same friend saw that project, and he decided to help out and do something with my foundation," Skoll concludes.
Most of the world probably relates more readily to a retired millionaire who says, "What could I possibly do?" than to the one who says, "Let's do something." Yet the whole purpose of Participant is essentially to get people to Be Like Jeff, to believe in the possibility of change—and to dedicate their own resources to bringing it about. Of course, very few people are as smart, as rich, or as lucky as Jeff.
And so Participant's biggest mountain may actually lie ahead: the prospect of continuing one day without Skoll. He says he envisions the company "as an institution that lives on long after I'm gone," but stepping back might not be so easy. "Frankly, I didn't expect to be doing this as full-time as it ended up becoming," he says. "Initially, I thought I'd take a year, I'd build up the team, and then I'd be able to commute back and forth. And now we're heading well down year three, and it's all-encompassing."
Skoll misses living in Silicon Valley and closely managing his foundation, which is still building its portfolio—and which is already such a key player in social entrepreneurship that a couple of experts I contacted said they couldn't comment because they're applying themselves for Skoll cash. The foundation awards funding to 31 entrepreneurs around the world (eventually the portfolio will expand to 40 to 45) to help them greatly increase the scale of their projects. For example, biotech entrepreneur Victoria Hale has created a nonprofit drug company, the Institute for OneWorld Health, to run trials and bring to market drugs for infectious diseases in Third World countries neglected by Big Pharma. Nobel Peace Prize nominee Sakena Yacoobi founded the Afghan Institute of Learning, which educates 350,000 women and children annually in Afghanistan and has trained 10,000 teachers.
"I think the purpose of both Participant and the [Skoll] foundation is absolutely strategic and brilliant," pronounces Bill Drayton, a pioneer in the field himself who founded the group Ashoka in 1980. In particular, he says, both promote awareness of positive change makers, closing what he calls the "perception gap" that lets apathy grow. "I am perfectly prone to saying nasty things about foundations that aren't contributors, but I really think these folks are successful."
In the end, perhaps the greatest secret to Participant's early success is a very Hollywood concept: a hero. "Jeff is a business entrepreneur, he's a social entrepreneur, he is a role model," Drayton says. "He's a person who has really strong values and he's demonstrating that." Luckily, this particular hero also has a sense of humor. When I ask what universe Skoll wants to conquer next, he answers without hesitation: starting a family with his new fiancee. "We got engaged, and I got back, told all our family and friends, and everyone's like, 'Congratulations, congratulations,'" he says. "Except for the friends I have in L.A., who would say, 'Oh, I'm sorry! My condolences.' One said, 'You know, you could be dating anybody, I mean, Hollywood actresses or anybody!' I'm like, 'Nah, it's okay.' Only in Hollywood."
Anya Kamenetz is the author of Generation Debt (Riverhead, 2006). She lives in New York.
A version of this article appeared in the September 2006 issue of Fast Company magazine.