There's been a lot of online chatter lately about the importance of "social investing" and calls for philanthropists to concentrate more fully on the nonprofits that are proven to be effective.
The conversation starter (at least this time around) was a post by David Hunter, a well-known consultant and author, entitled, "The End of Charity: How to Fix the Nonprofit Sector Through Effective Social Investing." In his well-thought-out post, Hunter acknowledges that his will be an unpopular view as he explains that
I also disagree with Hunter on one specific point. "Charity" will never end. Ever.
People give and invest charitable dollars for different reasons. Not everyone is motivated by longitudinal studies. And I for one think that's a good thing.
If we all become social investors and shun charity, we're in deep trouble as a caring society. Human needs and human societies are just downright inefficient.
Yes, we should continue to strive to teach men to fish — but at the same time, we can't let them starve by withholding fish while they're learning to angle.
I can think of several community foundations, private foundations and corporate grantmakers in our region who have, in the light of the current economy, redoubled their efforts to simply help "supply fish." They've not abandoned the desire to invest philanthropic dollars more effectively, or to push for more evidence of effectiveness. But they've also not abandoned the portion of their investment portfolio (so to speak) that focuses on immediate need. They will continue to rebalance their philanthropic investment portfolio to include short and long-term goals as the reality of life in their community continues to flow and change.
Just like in the financial markets, there is no universal "best" way to achieve returns across the spectrum of human needs. We need all approaches, tailored to our goals and perceptions of what accomplishes them. And all should be a part of the full spectrum of philanthropy policy and practices.
Do you agree? Where are you putting your money?
The conversation starter (at least this time around) was a post by David Hunter, a well-known consultant and author, entitled, "The End of Charity: How to Fix the Nonprofit Sector Through Effective Social Investing." In his well-thought-out post, Hunter acknowledges that his will be an unpopular view as he explains that
"it will have to be the nonprofit sectors’ funders (government, foundations, donors) who take the lead in building a strong, effective and efficient nonprofit sector — a sector that delivers what it promises, to those who need it most in order to have a decent shot at a productive, healthy, satisfying life. This will be the end of charity — and the flourishing of effective social investing."
Hunter goes on to list high-profile examples of nonprofit programs that have failed, and provides a general framework for social investing in terms of portfolio. "...Social investing isn’t monolithic. There is a continuum along which one can sort out various social investment approaches. So, for example, high-risk social investing involves channeling resources toward nonprofits that show evidence that they are on the road toward being able to create such value for their intended beneficiaries reliably and sustainably, but need additional time and resources to build the capacities to do so. At the other end of the continuum, low-risk social investing means channeling resources exclusively to those nonprofits that already have a sustained track record of producing documented impacts. Clearly most social investors will operate somewhere in between."
Hunter is right - there should be a continuum, and it should include approaches that focus on documented evidence of effectiveness. But I would argue that it should be broader than just social investing, just like a well-allocated investment portfolio should always include a mix of cash, stocks, bonds, real estate, etc., dictated by the goals of the investor. I also disagree with Hunter on one specific point. "Charity" will never end. Ever.
People give and invest charitable dollars for different reasons. Not everyone is motivated by longitudinal studies. And I for one think that's a good thing.
If we all become social investors and shun charity, we're in deep trouble as a caring society. Human needs and human societies are just downright inefficient.
Yes, we should continue to strive to teach men to fish — but at the same time, we can't let them starve by withholding fish while they're learning to angle.
I can think of several community foundations, private foundations and corporate grantmakers in our region who have, in the light of the current economy, redoubled their efforts to simply help "supply fish." They've not abandoned the desire to invest philanthropic dollars more effectively, or to push for more evidence of effectiveness. But they've also not abandoned the portion of their investment portfolio (so to speak) that focuses on immediate need. They will continue to rebalance their philanthropic investment portfolio to include short and long-term goals as the reality of life in their community continues to flow and change.
Just like in the financial markets, there is no universal "best" way to achieve returns across the spectrum of human needs. We need all approaches, tailored to our goals and perceptions of what accomplishes them. And all should be a part of the full spectrum of philanthropy policy and practices.
Do you agree? Where are you putting your money?
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