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Philanthropy
Movement toward the union of business & social causes?
"philanthropy is one of those wonderfully antique words" according to Bill Drayton, founder of Ashoka, a pioneer of the idea of identifying and investing in entrepreneurs. "the business/ social boundaries are simply collapsing"
New models of business:
- venture philanthropy
- microfinance
- social entrepreneurship
- non- profits move toward business models
- business / corporations move toward social causes.....the boundary between the non-profit and the for-profit models are blending together.
Focus on entrepreneurship
many groups are now focusing their efforts ondeveloping nations through their entrepreneurs
Traditional examples:
- Arzu Rugs in Afghanastan sells rugs from villages
- Count me in, from the USA
- Aid to Artisans
Philanthrocapitalism
New type of business model: focus on High-impact entrepreneurs? Or, the corruption of the philanthropy model? you be the judge...
On the positive side, the purpose of these organizations is to bring about change not by what they themselves do, but by what inspiration that they give to entrepreneurs and the manner in which they support others to make the changes for themselves...helping people to improve their lives through hard work, generating employment, jobs, and inspiring others in their communities to do the same.
If you teach a man to fish, its better than giving him fish...yes...but supporting entrepreneurs is like finding people that will completely change the fishing industry.
Examples of philanthrocapitalism:
- Ashoka: seeks "fellows" with big ideas.
- Making a financial investment in them, and
- giving them access to their network of other "fellows", and other experts in marketing and accounting....
- the idea is that they will become role models to others in their communities, and
- will provide employment in the local communities.
- Introduce the idea of being a "change maker" in the local community
- social entrepreneurs become "contageous" and you hope that other people in the community catch the bug.
- idea: track down and support entrepreneurs with far-reaching ideas.
- Acumen Fund
- similar model
- support from Google.org, and Bill&Melinda Gates foundation, and other wealthy individuals
- looks for entrepreneurs serving poor markets
- takes an equity stake in the businesses
- funds individual loans to entrepreneurs to buy startup kits
- Endeavor
- identifies high impact entrepreneurs in emerging markets
- but, rather than raising capital....
- it mentors entrepreneurs in finance, marketing and leadership
- helps with international expansion plans
- focus on supporting the "right entrepreneurs" bigger bang for the buck
- budget of $6.75 million USD
- entrepreneurs generate over $`1.9 billion per year. (good ROI)
- theory: by not taking a financial stake in the company (in any company), that means that potential entrepreneurs are less worried about sharing their business plans with Endeavor. They are more willing to share, and less worried that their ideas will be taken.
Reasons to be Non-Profit:
- able to offer lending without needing to be a bank
Professors to reference:
- Prof. Leslie Lenkowsky, professor of philanthropic studies (and social entrepreneurship), Indiana University
Links from KookyPlan
companies of note:
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