A version of this post originally appeared on LinkedIn.
“Philanthropy can take the risks that others cannot or will not.”
When I took the job as the President of the Rockefeller Foundation in 2005, philanthropy was facing a kind of identity crisis, and had been for awhile. The rules had changed since our founder, John D. Rockefeller, opened the doors of the Rockefeller Foundation, 100 years ago—dawning modern American philanthropy. In his day, philanthropy was the biggest kid on the block. But in the mid-20th century the landscape began to shift. Multilateral funders, social entrepreneurs, even socially-minded business had joined the businesses of solving social and environmental problems. On the whole, this was great news. But philanthropy was wondering: where did we fit?
Nearly a decade later, and after some soul searching, I believe philanthropy has found its identity once again, as a convener, a risk-taker, a piloter of good ideas, and a partner in bringing those ideas to scale.
Indeed, it’s an exciting time to be in philanthropy. But I believe there are three areas where we can do better and push ourselves further to maximize our impact in the years ahead.
Philanthropy does not have enough money to address the world’s problems. Even combined with government funding, we only have billions to spend, yet the challenges, from poverty to hunger to water scarcity, will require trillions to solve.
Therefore, it’s the responsibility of philanthropy to bring in new partners whose skills and resources complement our own. By unlocking even a small percentage of the world’s capital markets, we can have incredible impact. The Rockefeller Foundation along with other philanthropic partners have spent millions of dollars building up the field of innovative finance, including impact investing, which enables investors to invest with the intent of generating both financial return and social and/or environmental impact. Another example is social impact bonds, an innovative financing model where the private investor or fund pays for critical prevention programs that governments have paid for in the past, and receives a return based on the program performance.
But the need for partnerships goes beyond just financing—while philanthropy can provide the “risk-capital,” we need private sector partners to ensure the markets can sustain these solutions for the long-term.
While the social sector is well-positioned for innovation—risk-taking is in our DNA after all—we can do a better job as a sector to adapt successful private sector approaches to innovation, from design-thinking to crowdsourcing, to address social problems. Through collaborative competitions that encourage innovators to build on one another’s designs and ideas, and innovation challenges that surface ideas from all over, philanthropy is animating innovation externally. But we must do more as individual organizations to build up our own innovation capacities—by disrupting our own business models, creating a culture where safe and smart failure is encouraged, and seizing new market opportunities.
Increasingly, philanthropy is competing with governments and the private sector for the same skilled candidates, and we must offer the same opportunities for professional development, growth, and holistic well-being as many other sectors are learning and doing. But most importantly, we should be investing in our future philanthropic leaders, giving them the tools, experiences, and management skills they’ll need to address tomorrow’s challenges. More and more, these leaders are coming from within the sector, including my former Vice President at Rockefeller and then Ford, Darren Walker who recently took the helm at the Ford Foundation. Philanthropy, after all, is about the long-game, even as we focus on immediate and pressing problems.
These are just three areas where philanthropy can build on our current momentum and ensure we remain nimble enough to solve the dynamic and pressing challenges that confront our organizations, our grantees, and humanity as whole. The state of philanthropy is constantly changing, as it should be. But our optimism is as great as its ever been.