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Tuesday, January 23, 2018

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A new breed of philanthrocapitalists are putting tools in place to get a big bang for their buck
Jacqueline Beretta

October, 2007

We all know that Bill & Melinda Gates and Warren Buffet created a very exciting partnership that has the potential to initiate great change around the world. It is becoming increasingly more evident every day that the world needs more great business minds to solve it’s greatest riddles – those, as Mr. Buffet says, “ have already resisted both intellect and money.”

The Economist coined a new term to refer to social entrepreneurship or venture philanthropy: and it is called ‘philanthrocapitalism’. This mighty big word describes the idea that our today’s mega-philanthropists are taking a new approach to giving. Instead of writing checks to traditional pet causes that merely feel good, they are using more businesslike methods of measuring cost-benefit evaluations of what potential gifts might achieve. It’s all about applying business applications to social issues, and then measuring their success.

Today donors are concerned with the effectiveness of the programs they support and what difference they make on the people they serve. Measuring outputs and outcomes will be the key to successful funding in the future.

Here’s an example. You contribute $20,000 to an organization to print and distribute a brochure to 5,000 people in your community in an effort to raise awareness for dental hygiene. This is the output. The big test will be the outcome – can the organization show measurable results by those who received the brochures and followed the directions? In the end, did your money make a difference – could you see visible results from the distribution of the brochure?  Taking this further, the Economist suggests that both donors and organizations make sure that any failures are documented. Changes could then be implemented to get the projects back on course.

For donors who want to ensure that their money is being used to the greatest use, efficiently and economically making this community a better place, this sounds like the solution. Like any successful investor will tell you, an invested dollar should show a good rate of return. 

A young website called

Created by the Council on Foundations and Walker Information, assists organizations involved in the global movement to measure and improve the impact and effectiveness of their philanthropy programs and initiatives. This site supports persons and organizations who have conducted - or are interested in conducting - a measurement program.

The measurement process featured on this site, designed for use by individual corporations, resulted from the groundbreaking work titled 'Measuring the Business Value of Corporate Philanthropy' by the Council on Foundations and Walker Information. A copy of the project's executive summary report can be downloaded by clicking here.

This toolkit will help you:

  1. Plan the project
  2. Refine the project
  3. Conduct the survey
  4. Summarize the return
  5. Get comparative data
  6. Determine the findings
  7. Write the report
  8. Present the results
  9. Implement the action plan
  10. Plan future research

While this is mainly for corporations - I think it is invaluable to foundations and nonprofits alike to better understand the ramifications of a grant in today's climate.



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