Four tips for the aspiring, Audacious New Philanthropist
Audacious New Philanthropists are not satisfied with the treatment of symptoms, they want cures-meaningful, catalytic and disruptive interventions to the entrenched norms that perpetuate social injustices. In this article, I set out four key approaches the audacious New Philanthropist takes in assessing social investments and how they are aligned to the benefit of social enterprises*.
1. Focusing on understanding the problem
The audacious Philanthropist is inquisitive, spending time with a range of important stakeholders involved in the delivery of solutions they are interested in shaping and financing. They are confident their support will address root causes and that this focus is shared by all involved.
Pretty obvious but problems that are not understood cannot be solved. They look for social enterprises that are aware of, and keen to discuss, the influences that entrench the problem they are tackling and can point to an evidence base that identifies those root causes. Taking the time too to reach a mutual understanding of the core competencies of the social enterprise and what the supporter can bring to them, alongside capital. Philanthropists may often find social enterprises (particularly non-profits) too quick to move to transactional conversations driven by short term needs/outcomes without adequately positioning them.
2. Assessing the achievability of milestones, and the resources that will be needed
The audacious Philanthropist will understand the importance of flexibility in their funding. Asking social enterprises what they will struggle to fund from less progressive, more traditional sources.
The scale of the world’s social problems is enormous, progress needs to be demonstrated in measurable steps. A vague understanding of Vision without a communicable path to success will not produce the focus in the organisation or gather the broad range of transformative long term partnerships needed. Discuss the executive capacity needed to stay on the pathway to success as well as what is needed to keep the lights on.
3. Supporting scalable solutions
The audacious Philanthropist will support the costs of research and programme design, test assumptions around demand and be open to investing in income-generating activities to leverage their capital and perpetuate social impact.
Interrogate scalability, always. Audacious is a model that can be perpetuated at large scale. Without an understanding of how to scale it will be a struggle to attract others with the private capital needed to produce big results. This doesn’t mean a social enterprise has to be at a substantial scale already (in fact it is often more attractive if it isn’t) nor does it mean that pilot programmes can not be more limited in testing narrower assumptions but there needs to be an articulate and logical growth plan underlying the activities. If it’s not there, get involved in contributing towards its development as this is often the most rewarding part of organisational development.
4. Being open to (and about) failure and risk
The audacious Philanthropist understands how programmes will be monitored, evaluated and what the organisation’s culture is in regards to learning.
Traditional philanthropy does not adequately address the primary social issues we face because it is risk-averse. Innovation, even with diligent research and development, comes with risk. Social enterprises must be bold in learning and adjusting, communicating necessary changes in their approaches to those who support them. With that mentality, failure is progress and transparency is always appealing. Without both, potential support will quickly move on.
As a Third Sector executive, I’d like to see more private capital utilised for the public good. Social enterprises must not assume that philanthropists will have the knowledge or experience to support confidence that matches their desire to make large donations and should be patient to reach mutual understanding. Treat it as a two-way conversation that will strengthen your proposition and your focus as an organisation every time you do it. It doesn’t matter how big you are, signpost the elements of critical analysis detailed above.
You don’t have to be a millionaire to apply critical analysis to causes that you would like to support, or any less audacious in how you would like your money or expertise used. Social enterprises should be willing to engage, and will likely enjoy, answering searching questions that are clearly aimed at furthering your understanding. If you find no engagement or shallow responses that should inform your choices about whom you support but remember, an element of proportionality and sensitivity to limited resources is a helpful consideration!
*A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. This may include maximizing social impact alongside profits for co-owners but can also include non-profits.
This article draws heavily from existing bodies of literature and original content from the following excellent sources:
Article by James Haughton, CEO Pestalozzi World