You are increasingly going to hear me write about Venture Philanthropy and Social Entrepreneurship. I see a blending or cross over starting to occur between the venture/entrepreneurial world and the philanthropic one. Both sides can benefit from approaches and axioms of the other. Just as in our economy, you need to continually innovate and find new technologies and approaches for old problems, the same is true for the non-for-profit world.
In a recent Fortune article, Bill Gates: The Way We Give, Gates lays out a variety of elements that drive his philanthropic approach. To begin with, he starts by saying that it is philanthropy’s job to step in when market forces don’t. He also believes in the power of using technology to improve people’s life. Just as in the for-profit world, the best chance to make an impact is when you find a problem that’s been missed and you can develop a new approach and bring new resources to bear. Malaria is an example where the market mechanism breaks down:
"Take Malaria, 400m infected, 1m die. 2,000/day. You develop a technology when there’s a buyer for it. Here there was no market for discoveries in fighting malaria. Philanthropy can draw in experts, give awards, novel arrangements private companies, partner with universities." (sounds a little like active venture capital…)
He also hits on a them that I have noticed. It is not that people don’t care about the poor, but rather, the poor are not visible necessarily (nor impact) people’s daily lives. As Gates says:
"Randomly resorted world, rich people lived next to people in developing world conditions, you’d walk down your block and say, “Those people are starving. Did you meet that mother over there? Her child just died. Do you see that guy suffering from malaria? He can’t go to work.” Basic human instinct would kick in and we would change our priorities.”
We also try to over engineer solutions. "Best technology is often the simplest. Heat-sensitive stickers prevent millions of doses of good vaccines from being discarded".
Lastly, just as venture investments need take outs from either the markets or large corporations, philanthropy, in the end, needs businesses and governments as partners. This is where the big capital is. I’ll write at some point about a mentor of mine, Irving Harris, who used to use his own capital to develop new approaches to solving old issues, roll out programs, measure them and migrate them eventually over to larger, government funded programs. As Gates say: "That means we need to get these issues on the political agenda…government has to be involved in solving them. Gates is 1% of the giving in America…which equals only 50% of what the state of California spends on education each year."
It’s an interesting article and worth a read.