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I got invited to the White House Forum on Philanthropy Innovation last week. Pretty cool opportunity. Just thought I’d share a couple reflections – It reaffirms that there are people all over this country (and world) giving their lives and everything they’ve got to help making the world a better place for everyone. Corny comment, but true.

The biggest theme of this particular get-together was innovative approaches to change, esp. financial. SVP is so focused on the human and social capital (as well as financial) part of the equation that I don’t think about financial innovation as much. But it’s incredibly relevant, for two really big reasons, at least as I listened that day –

  • The pool of financial capital available for social change from institutions and the public sector is really constrained for the foreseeable future. We all know the story on the debts and cutbacks at local, state, and federal levels and some of the biggest foundations in the world can’t count on the markets to grow their endowments, like they did in the last century. *
  • I’ve said this more than once – I truly believe that we know how to solve a lot of the world’s problems. We’ve seen it in a neighborhood, a school, a local NGO we work with, but it doesn’t happen broadly enough across communities. It isn’t because we don’t know how and often times the biggest barrier is not financial; it’s leadership, sustained commitment, community consensus, etc.

Given those two points (not everyone would agree with me), it means we have to be more innovative with the dollars we do have. So that looks like –

  • The Heron Foundation deciding to invest all of its endowment assets towards socially responsible / mission-related investments. Think about it – a foundation like Heron makes $5-10 million annually in grants, but what happens to the “other” $100 million+ sitting there in its corpus. Many foundations are taking steps down this path
  • The idea of social impact bonds being piloted in Massachusetts and potentially other states. Who knows if it can succeed, but it is a creative, new way to use exiting capital.
  • Cities and foundations discussing co-mingling funds towards community issues. Think about both of those entities using their capital in the way that they are each most effective and then seeing that combined 1+1=3 effect, rather than each of them operating independently. New York City and Mayor Bloomberg have been at the forefront and cities, in general, are at the level where it seems the public sector has more flexibility, creativity.

Lots more I could say, but just wanted to share a few thoughts. If anyone has more questions or ideas, I’d love to hear ‘em.

P.S. One criticism of the day was that it was closed to the press. I’m not sure why they did and perhaps they had a very good reason, but at face value, I wasn’t sure why it was closed either.

Asterisk symbol = there is great potential, though, from significant personal / individual / family wealth transfer that will happen over the next 50-100 years. If a lot of that financial capital can be invested in the right ways, then we will look less and less to institutions and govt entities for long-term solutions and more towards individuals and families.

 

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