“More than a billion people live on less than $1.25 a day,” said Robert E. King, who, together with his wife, Dorothy, made the gift. “That’s just not right.”

The new Stanford Institute for Innovation in Developing Economies, which has been nicknamed SEED, will be housed in the Graduate School of Business but will draw students and faculty from around the university.

The gift is one of the largest Stanford has received this year. The Kings said that was one reason they had decided to give the money to Stanford rather than starting a freestanding nonprofit like the Thrive Foundation for Youth, which they established to support research into programs helping young people and their parents.

“The relationships the university has in Silicon Valley, the range of expertise it has among its professors — it can’t be replicated,” Mrs. King said. “The university can make our money more fruitful than we could on our own.”

The institute will teach students, who it hopes will go on to create programs and businesses like the one established by David Spitzer, a Stanford M.B.A. He started Mountain Hazelnut Venture Ltd., to grow hazelnut trees in Bhutan, a tiny, land-locked country wedged between China and India. The company hopes to produce some 40,000 tons of hazelnuts, giving local farmers a lucrative export product and restoring trees to mountainsides stripped by logging.

Hau Lee, a supply chain expert at the Stanford business school who will lead the new institute, estimates that Mountain Hazelnut, which has pledged a portion of profits to local communities, will end up employing 10 percent of the country’s population.

“Many people are doing relief or aid operations, but at the institute, we will be asking how we can stimulate entrepreneurs and business ideas so that the people receiving aid today can became self-sufficient so they won’t need aid in the future,” Professor Lee said.

Mr. King, a Stanford business school alumnus, is largely unknown outside start-ups and venture capitalists, but has built a fortune out of R. Eliot King Company and Peninsula Capital, which was one of the first investors in Baidu, the Chinese version of Google.

That investment came about when Xiangmin Cai, a Chinese graduate student who had lived with the Kings, introduced Mr. King to Robin Li, Baidu’s founder.

“I set up an office at 3000 Sand Hill Road, where I managed money,” Mr. King said, referring to the home of many Silicon Valley venture capital firms. “I’d sit there, looking out at cows grazing, and people would drop in on me and we’d talk.”

The Kings demurred when Stanford offered to put their name on the new institute, and Mr. King was reluctant to talk much about the investments that had made him wealthy. “We’ve had success,” he said simply.

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