Charities

Giving is not like investing; and not all nonprofits should run like it is

I remember sitting in a second-year elective course as an MBA student at Harvard Business School nearly two decades ago, listening to a guest lecturer describe how the “venture philanthropy” organization where she worked was applying the “principles of venture capital investing” to its work.

By Phil Buchanan, The Center for Effective Philanthropy

She heaped disdain on what she called “traditional philanthropy,” which, she argued, hadn’t achieved results. She described nonprofit leaders as inept and in need of aggressive “investors” to hold them to account.

The students, most of whom knew little about philanthropy or nonprofits, nodded, save for a handful of us with experience in philanthropy and nonprofits. Because we knew she didn’t get it. Philanthropy has achieved a great deal in this country; it’s been crucial for much of the progress we take for granted in our lives. And, nonprofit leaders are often unsung American heroes, balancing a range of responsibilities that can make a corporate CEO’s job feel like a walk in the park. But our guest speaker that day was dead set on promoting the idea that everything that came before her was ineffectual and that she had the new formula for success.

The fact is, however, that there is no formula – no “plug and play” analogy to be adopted by the world of giving. There are many choices and many ways to be an effective giver, but none are simple.

Although there is, of course, much ineffective philanthropy, there are also inspiring examples all around us of giving done right. And when done right, giving can and does have tremendous positive impact.

Read the full story at The Center for Effective Philanthropy. 
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