Philanthropy isn’t broken, it has just changed.

We use the word  “philanthropy” a lot on this site, so much so the Editor told me that we need to ensure that there is a very clear difference between “philanthropy” and “social impact bonds”.

I feel compelled  to share this article with you. The article appears on the popular creative solutions blog Good.is.  It starts of on the premise the philanthropy was broken and as a result, there’s no money flowing into the social sector to fund social projects that communities worldwide so desperately need. good

Dilemma #1: The Definition of “Philanthropy” is Outdated and Limiting.

Really? This kind of depends on your definition of what philanthropy is, surely? The Good article talks about Bill Gates giving half his wealth away after his death.

Firstly, Bill is alive as of yesterday, I know this because I saw him answering questions on Reddit. Secondly the Bill and Melinda Gates foundation is a wonderful organisation, making real inroads into malaria suffering in Africa.

A cure for the small pox vaccine was achieved largely due to the old school philanthropy that you say “is broken.”

There are fewer big name philanthropists out there. Which is ironic considering how rich people are.

There is such a demand for aid and capital to start projects and we are seeing more and more smaller groups combine to harness the power of their capital to have a huge impact on social issues.

Dilemma #2. Society Only Expects One Percent of Businesses to Engage in Philanthropy.

“There is a very loud majority that is critical of big business”

No. A lot of people are employed by big business, have stock in big business and rely on their profits for their pension pots.

Social and ethically led investing is the biggest growth vertical in financial planning at the moment.

Joe public has started to care where their savings are being used, not just the return on investment.

Dilemma #3. Consultants Expect Compensation In Exchange for Social Impact.

Charities & social impact groups don’t always have the skill set to setup or manage a program.

Consultants can add genuine knowledge and experience to guide a project to success. The fact that they get paid to do it, surely that is  social impact delivered right there.

There are so many worthy projects around the world that desperately need funding an we think philanthropy in the form of social impact bonds can ensure that there is enough money raised to deliver on these projects.

We are not sure if this piece was just to push our buttons, or to cause us to rant about its inaccuracies online.

We welcome your comments.

Comments

  1. says

    Thank you for taking the time to create a response post! I’m really happy to see how much dialogue this piece is creating. The article is rooted deeply in my own personal outlook on life. Everyone has a different measure for the value of their own work, mine is harsh, and I recognize that. I also purposefully do not give any solutionary statements. Some final points:

    – Regarding philanthropy’s definition: There are a lot of ways to define it. My argument here is that individuals that are not the most affluent should not feel as though they can not also give back or contribute to a cause through their valuable knowledge and social capital.

    – Regarding big business skepticism: Really? This is more in reference to the recent world wide Occupy uproar. There is constant criticism amongst individuals against billionaires and big corporations.

    – Regarding the value of pro-bono: Pro-bono is not the only way, and it never should be seen as a replacement for monetary contribution. That isn’t my point. My point is that it is a valuable resource that can help lighten the load for 80-90% of organizations (the kind that I work with) that literally have one week of savings in the bank.

    Thanks again!

  2. Matt Beech says

    Matthew, thank you for your article and your response.

    I understand that everybody has a different map of the world. Influenced by factors far to numerous to list. But we can at least agree that any sort of help for social issues is better than none.

    Even if its a local government officer, trying to balance the books but wanted to get the best results to stop re-offending, let him use all options available to him.

    Same goes for issues in the developing world, if creating a social bond, or paying on results motivates third parties to help for a profit, how can we say no?

    Global occupy uproar? I don’t think we got that in the UK. We did have 20 hippies, dogs on string, playing tin whistles in tents at St Paul’s Cathedral. But we were talking about REALLY making an impact on people lives.

    Governments have no money, and ethical and socially aware people are not rushing the barricades. They are asking their fund managers not to invest in British American Tobacco, or arms manufacturers. Social investment funds are starting up from as little as $20 as an entry point.

    Social and impact investment is the new form of philanthropy because it is no longer the preserve of the super rich. It is open to all.”

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