When a child gives their piggy bank contents to a charity because they were moved to do so by a meaningful story on TV, philanthropy is in action.
A child philanthropist? To most, such an expression is patronizing, or it is as rare as (or rarer than) a child prodigy in music.
But when I read Dan Pallotta’s article which encourages those of us in the business of asking people to make a difference in society, I was reminded that even a child can be a philanthropist if encouraged to act on their emotional response.
Philanthropy, as Pallotta infers, is not about size of the gift, it is about the act of giving.
We all need to applaud all the aspiring philanthropists.
In social marketing, I believe that no meaningful change in societal mores will come about if only a few privileged individuals alter their behavior: everyone needs to change their behavior to make a difference. Whether it the social marketer is promoting recycling, increased transit use, ethical investing, or action to decrease child abuse, they are not targeting their message at a handful of people.
Of course, it is possible that if inspirational people lead the charge, then others may follow. However, the message of behavior change must meet the needs of a large audience or must be adaptable to reassure as many people as possible that they are doing the best thing for them.
Unlike Pallotta, I do not disparage the $10 SMS donations. For some, that is all they are prepared to do in a crisis. I am always disappointed that individuals are willing to accept a lesser role to play in helping others, but I would be much more dismayed if they did nothing.
I agree that great things can come from modest people who want to make a difference. In fact, I believe that sustainable social change RELIES on the “middle donor” to use a fundraising term. The large number of people who are interested in doing nothing to help society and the small number of key players in social change are not the key audiences.
Sound fundraising practice helps the $25 donor to become a real actor in the charitable endeavor by honoring them as philanthropists. Similarly, sound social marketing should address the people who are able and willing to make a difference in order to cultivate them into the leaders of improved social behaviors.
Thursday, March 4, 2010
Wednesday, March 3, 2010
Subject: Program Related Investments
In Canada, we have over 81,000 registered charities. Staggering. Each is seeking financial support for their work from individuals, foundations, public sector grants and from corporations.
It is a familiar model of charity: ask for a gift of cash (or securities) that can immediately be put to use to deliver social programs to those in need.
But the landscape is changing.
Charities are not the only purveyors of social benefits. They are only part of the non-profit, responsible business landscape. Furthermore, there appears to be a growing skepticism that Canadian charities (in their proliferation) are less efficient at addressing social ills than are well run social businesses.
In the US, increasingly there is a discussion of “sector agnostic” work. Even the term social entrepreneur is being questioned, as it implicitly doubts the value added from commercial entrepreneurs who develop businesses that are socially beneficial. In the US, there is also a growing argument in favor of foundations providing program related investments.
Canada needs to listen to these arguments.
Here in Canada, I have been trying to learn of foundations and individuals who are interested in INVESTING in social business. Of course, there are donors. There are also granting bodies, both public and private. There are even databases and resources to identify these donors and funders.
However, there are very few ways that I have found that help a struggling social entrepreneur identify and secure social venture capital in Canada.
True, some of the community foundations host donor advised funds, from which philanthropists can direct funds to support an investment in charitable causes or businesses with a social mandate. There are also the Social Venture Partners groups across the country, and the Social Capital Partners in Toronto, and Renewal Partners in BC along with a handful of other niche organizations. However, if one looks into the key players in the financial field of social investment, the same names keep reappearing in Canada, and they are more experts in the field--idealistic pundits--than actual investors. I don’t doubt they are like me: they would also like to see more investors come forward to support social enterprises.
In fairness, the Social Investment Organization is perhaps the most obvious convener of the players and resources in this field in Canada. However, their focus appears to be on the more socially responsible traditional investments of ethical mutual funds, or investments in companies that meet laudable, corporate responsibility standards. Indeed, I look forward to attending their conference in June 2010 to increase my knowledge of their view of the social investment landscape in Canada.
By comparison, the Canadian Community Investment Network Co-op offers a variety of links and information on what they refer to as “community investing.” Through their list of members, I learned of the Canadian Alternative Investment Cooperative. (CAIC)
CAIC was established in the 80’s by a group of religious communities in order to pool assets to make loans to social ventures. They appear to be perhaps the best example of the sort of structure I am recommending: an organization working directly to invest in small entrepreneurs, that happily advertises the success of the organizations in which they have invested.
Even with all the hype about Corporate Social Responsibility (CSR), remarkably few of the big banks or financial firms in Canada have investment funds available for social entrepreneurs. I presume that investing in social businesses is seen as too risky. In fairness, Alterna and Vancity are leading the charge, but their investment funds are often very limited in size or scope, especially when compared to the social venture capital markets that are part of the growing tide in the US.
I would like to trumpet the vision of the Trillium Foundation, as they are one of the first of the Canadian foundation community to consider how best to invest in programs. Their recent announcement about increasing the money in their Future Fund highlights their commitment to providing what they refer to as social finance. Their term is, in effect, what I refer to as social venture capital that is available for program related investments.
Canada needs to develop a more robust series of forums to bring together weathy individual investors and foundations with the organizations seeking investors. This meeting of money and ideas is the backbone of the SOCAP conferences in the US, but there hasn't been the same development in Canada. (Ironically, the handful of Canadian luminaries in this field were present at SOCAP)
I believe that there are non profits using very entrepreneurial approaches to solving social problems, and there are some businesses that are founded in order to address social concerns. In fact, I have worked with Canadian organizations that fit both models.
The challenge is that these organizations simply do not have ready access to capital to underwrite their ideas. The banks won't touch them. Traditional philanthropists are wary of new initiatives. We need philanthropy to be augmented by—or at least transformed into—investment in good social ideas.
Put simply, Canada needs more capital that is available for Program Related Investments—and I would like to see more Canadian public and private foundations come forward with program related investments rather than grants. Canada also needs more transparent mechanisms through which eligible organizations can connect with social venture capitalists.
It is a familiar model of charity: ask for a gift of cash (or securities) that can immediately be put to use to deliver social programs to those in need.
But the landscape is changing.
Charities are not the only purveyors of social benefits. They are only part of the non-profit, responsible business landscape. Furthermore, there appears to be a growing skepticism that Canadian charities (in their proliferation) are less efficient at addressing social ills than are well run social businesses.
In the US, increasingly there is a discussion of “sector agnostic” work. Even the term social entrepreneur is being questioned, as it implicitly doubts the value added from commercial entrepreneurs who develop businesses that are socially beneficial. In the US, there is also a growing argument in favor of foundations providing program related investments.
Canada needs to listen to these arguments.
Here in Canada, I have been trying to learn of foundations and individuals who are interested in INVESTING in social business. Of course, there are donors. There are also granting bodies, both public and private. There are even databases and resources to identify these donors and funders.
However, there are very few ways that I have found that help a struggling social entrepreneur identify and secure social venture capital in Canada.
True, some of the community foundations host donor advised funds, from which philanthropists can direct funds to support an investment in charitable causes or businesses with a social mandate. There are also the Social Venture Partners groups across the country, and the Social Capital Partners in Toronto, and Renewal Partners in BC along with a handful of other niche organizations. However, if one looks into the key players in the financial field of social investment, the same names keep reappearing in Canada, and they are more experts in the field--idealistic pundits--than actual investors. I don’t doubt they are like me: they would also like to see more investors come forward to support social enterprises.
In fairness, the Social Investment Organization is perhaps the most obvious convener of the players and resources in this field in Canada. However, their focus appears to be on the more socially responsible traditional investments of ethical mutual funds, or investments in companies that meet laudable, corporate responsibility standards. Indeed, I look forward to attending their conference in June 2010 to increase my knowledge of their view of the social investment landscape in Canada.
By comparison, the Canadian Community Investment Network Co-op offers a variety of links and information on what they refer to as “community investing.” Through their list of members, I learned of the Canadian Alternative Investment Cooperative. (CAIC)
CAIC was established in the 80’s by a group of religious communities in order to pool assets to make loans to social ventures. They appear to be perhaps the best example of the sort of structure I am recommending: an organization working directly to invest in small entrepreneurs, that happily advertises the success of the organizations in which they have invested.
Even with all the hype about Corporate Social Responsibility (CSR), remarkably few of the big banks or financial firms in Canada have investment funds available for social entrepreneurs. I presume that investing in social businesses is seen as too risky. In fairness, Alterna and Vancity are leading the charge, but their investment funds are often very limited in size or scope, especially when compared to the social venture capital markets that are part of the growing tide in the US.
I would like to trumpet the vision of the Trillium Foundation, as they are one of the first of the Canadian foundation community to consider how best to invest in programs. Their recent announcement about increasing the money in their Future Fund highlights their commitment to providing what they refer to as social finance. Their term is, in effect, what I refer to as social venture capital that is available for program related investments.
Canada needs to develop a more robust series of forums to bring together weathy individual investors and foundations with the organizations seeking investors. This meeting of money and ideas is the backbone of the SOCAP conferences in the US, but there hasn't been the same development in Canada. (Ironically, the handful of Canadian luminaries in this field were present at SOCAP)
I believe that there are non profits using very entrepreneurial approaches to solving social problems, and there are some businesses that are founded in order to address social concerns. In fact, I have worked with Canadian organizations that fit both models.
The challenge is that these organizations simply do not have ready access to capital to underwrite their ideas. The banks won't touch them. Traditional philanthropists are wary of new initiatives. We need philanthropy to be augmented by—or at least transformed into—investment in good social ideas.
Put simply, Canada needs more capital that is available for Program Related Investments—and I would like to see more Canadian public and private foundations come forward with program related investments rather than grants. Canada also needs more transparent mechanisms through which eligible organizations can connect with social venture capitalists.
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