Next Gen Philanthropy
As Millennials continue demand social change as employees and consumers, new avenues of affecting social change have emerged. We’ve written about impact investing and its potential to increase capital for innovative solutions across a range of asset classes and geography. We’ve also written about FinTech, and its potential to bridge the gap between finance and philanthropy. There is the rise of “sustainability,” which is about more than doing no harm, and gamification-inspired, digital marketing efforts growing social impact. As corporate social responsibility flowers into these subfields, philanthropy is also growing into a new avatar as a bridge, a unifier and enabler of social impact.
Microfinance in the US is a perfect example of how closely philanthropy is linked with impact investing – sometimes known as impact philanthropy. While microfinance pioneers in emerging markets have created a self-sustaining model of peer-to-peer lending networks, usury laws in the US prohibit high interest rates. Using philanthropy money, groups such as Accion U.S. Network and Grameen America are able to support microloans in the US while keeping interest rates low and providing access to micro capital for the country’s 9 million underbanked.
Examples of the support between the worlds of sustainable technology and philanthropy are abound. Venture philanthropy, also known as angel or enterprise philanthropy, describes models that go far beyond the writing of checks and often take a deep and long-term view of the what is means to invest in solving global and/or local problems. Husk Power Systems, a startup based in India, would not be able to scale if the Shell Foundation didn’t fund the company with philanthropic funding. Today, Husk provides power to thousands of rural Indians using technology that generates electricity using rice husks, a waste product from a staple food in the region.
Philanthropy has also embraced the giving of time and talent in recent years. Corporations host charitable giving programs and fundraisers to help employees share their skills with recipients who can value them. At LUSH, the staff convert shop fronts into campaigning centers and sales associates into activists around causes that employees believe in from animal testing to marriage equality. This active involvement by employees and their willingness to donate time and talent is breathing new life into philanthropy.
In its new form as enabler of social impact enterprises and technological innovation, philanthropy is also being reshaped by Millennials. Given their social and digital penchant, they are adding voice and the power of their network to the causes they care about – the Love Has No Labels campaign from The Ad Council aims to identify implicit bias in our everyday lives and work towards eliminating it. The campaign has received 100 million+ shares on Facebook and over 52 million views on YouTube, making it the most viral public service announcement in history. This power of using the digital medium to engage actively and using networks to fuel awareness and affect social impact and change is unique of Millennials and is helping philanthropy to re-invent itself.
In our hometown of Austin, the Austin Community Foundation is joining many other philanthropic giving institutions to galvanize the idea of impact investing, a type of investment structured to generate both a financial return and a measurable social return. At DU, we are strong proponents of engaging in positive social impact through all avenues and while keeping all relevant stakeholders engaged – come and see how we can help you move the needle from traditional to innovative philanthropy!
Maggie & Hector