2011: The Year Philanthropy Starts to Become a “Long-Term Solution”

An apparent disagreement between two of the sharpest minds in philanthropy is just too tempting to resist.  Herewith, an unsolicited response to Matthew Bishop (co-author of Philanthrocapitalism and The Road From Ruin, and NY Bureau Chief of The Economist) and Lucy Bernholz (founding President of Blueprint Research & Design and blogger extraordinaire at Philanthropy 2173) on the subjects of predicting trends in philanthropy and the relationship of private giving to public policy.

I Beg to Differ

I take a back seat to no one in my admiration of the Nonprofit Finance Fund, so it pains me to dissent from Rebecca Thomas’s thoughtful article, "New Ways to Rate Charities Don’t Help Donors Make Smart Bets," published in the Chronicle of Philanthropy, but dissent I must.  The simple answer to her important questions – “So why the rush to rate and rank? Why not provide information and let donors decide?” – is that donors aren’t willing to wade through unprocessed information about nonprofits to make more informed decisions about which charities to support.  Given the choice between making steady improvements in sites like Charity Navigator and continuing to leave donors without any meaningful guidance about which nonprofits are most effective, I’ll take better rankings every time.

SIF and the Office of Inspector General: Time to Chill

Before we jump the gun once again, perhaps it would be a good idea to understand what the OIG does first.

When Aggregate Demand Met Aggregate Supply

Here at the SOCAP10 conference, I'm struck by the number of deals that want to happen, are trying to happen, and, for all I know, may even be happening.  I suspect, however, from the strained looks on the faces of many attendees, that the wannabes far outnumber the consummated transactions.

One connection that isn't going to come together anytime soon is between aggregate demand platforms such as the Growth Philanthropy Network's Social Impact Exchange -- a clearinghouse of some 2,500 cross-sector members presenting carefully vetted investment opportunities in high-performing, growth-ready, scalable nonprofit organizations -- and aggregate supply platforms managed by national donor advised funds (DAF) like Schwab Charitable Fund -- which, according to its Web site, "has issued over 270,000 grants to 44,000 public charities - a total of close to $1.5 billion." GPN's Alex Rossides and Schwab's Kim Wright Violich led a discussion at SOCAP10 among a circle of nonprofits, funders and investors on the subject of "The Future of Aggregate Demand Platforms."  It seems to me like an obvious match waiting to happen, one that could address the social sector's desperate need for more effective capital allocation, but if Schwab's perspective is emblematic of the industry, and I believe it is, the DAFs apparently don't see it that way.

How Mighty Oaks From Little Acorns Grow

The chaotic nonprofit capital marketplace is trying to organize itself to deploy billions of dollars much more effectively.  It has miles to go, but it’s heading in some encouraging directions.  The intrepid Social Innovation Fund (SIF) and the just-launched Social Impact Bond (SIB) are two of the most promising.