A Giving Nation
Giving is big business. And a new report just out this week on philanthropy in the United States shows why. There's a lot of money floating around. Americans are giving at record rates—both as individuals and through foundations. 
It's a wonderful sign of our altruistic nature. And for some, an ideal business opportunity. “Every major bank, every major mutual fund…is promoting the act of giving,” said philanthropy expert Lucy Bernholz over coffee recently, as we chatted about innovative projects and the generous people who fund them.
The commercialization of philanthropy and giving is only a good thing, in Bernholz’s view, because the financial services industry brings “product and service innovation” to the field. Innovation like “embedded giving”—opportunities to tack on a donation to a charity on top of another financial transaction. Haven’t encountered this yet? Bernholz describes it here on her blog about the "business of giving", Philanthropy 2173.
Not surprisingly, social entrepreneurs—entrepreneurs with a humanitarian mission—are also behind many of the new projects that facilitate donations and investments. Bernholz said social entrepreneurs are playing a major role in how the tools and mission of philanthropy are changing:
There’s this whole industry of giving that social entrepreneurism is a part of largely because very smart businessmen have entered the field and are very excited about it.
Besides more traditional tools like socially responsible mutual funds, there’s a whole new world of giving options out there. In the past couple years a proliferation of websites have sprouted that make it easier for donors to find causes/charities/social enterprises that they believe in. Some of these include:
Network For Good
Global Giving
GoodTree
GoodSearch
And like everything else these days, social networking sites also play a part. MySpace, Facebook and Second Life allow people interested in supporting different causes to find each other.
As the president of consulting firm Blueprint Research & Design, one of Bernholz’s goals is to encourage more “mission-driven investing.” What does this mean? She points out that U.S. foundations hold an estimated $450 billion in endowed assets. Most of these assets are invested in businesses that have nothing to do with the foundation’s mission—and may even in undermine it, as a recent Los Angeles Times investigation revealed about the Gates Foundation.
Now that it’s becoming “more and more possible to make money by doing good,” as Bernholz puts it, there should be more willingness to invest in social entrepreneurs and their projects. After all, the social entrepreneurs are the people who are creating financial opportunities for doing good, says Bernholz. Like Muhammad Yunus’ Grameen Bank in Bangladesh and South Shore Bank in the Midwestern United States.
“We’ve entered a period of philanthropy like no other,” explains Bernholz, “because the federal government has gotten out of the business of funding domestic programs.” Foundations and individuals are picking up the slack by providing resources to projects—and many social entrepreneurs. Even if the government increases its commitment to domestic programs, Bernholz believes social entrepreneurship and its hybrid approach—drawing on strategies from the market as well as the public sector—to solving serious problems is here to stay:
The problems people are trying to solve are not caused by any single sector so no single sector can solve them.
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Comments
People can check out DonorsChoose as well. http://www.donorschoose.org/
It's a simple way to provide students in need with resources that public schools often lack. At this not-for-profit web site, teachers submit project proposals for materials or experiences their students need to learn. These ideas become classroom reality when concerned individuals, whom we call Citizen Philanthropists, choose projects to fund.
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