Tuesday, April 10, 2007

On the cusp...

I remember it well. "Giving season" 1992 or 93, suddenly print ads for charitable gift funds were everywhere - in every magazine and newspaper one picked up from November through the end of the year. Its been that way ever since. So long, now, that one assumes the ads have always been there, that Merrill Lynch has always wanted to manage your "whole portfolio, including charitable planning" and Morgan Stanley has always run ads about "passing on your values, not just your money" to your children.

Well, it wasn't always this way. The introduction of the Fidelity Charitable Gift Fund in 1991 was followed by a blitz of advertising. This helped make a market - not just for Fidelity and Vanguard and others, but for community foundations and other community funds who suddenly had a much easier time explaining the ins and outs of donor advised funds.

I think we're on the cusp of another moment like that one. This time its for the idea of social capital markets. Page 11 of the March 5, 2007 New Yorker is a full page ad, paid for by Goldman Sachs, with the tag line,

"A new way to use the capital markets.
A different future for ten million children."

The ad talks about how the bank worked with several countries and the World Bank to underwrite a $1 billion bond for the International Finance Facility for Immunisation - securing a market for vaccinations, providing funding for the Global Alliance for Vaccines and Immunisation (GAVI Alliance) and helping inoculate 500 million children over the next decade. This kind of Advance Market Commitment is only possible with a rethinking of capital markets and the role of philanthropy and public sector.

Xigi.net and MIXmarket are both taking off - both help map opportunities in blended capital markets. Calvert successfully pushed for changes in insurance companies' disclosures about climate change. Foundations that invest for some social return on their endowments are increasing in number, though the practice needs all the help it can get. Social entrepreneurs are all the rage, and social finance is the topic of many a conference. (Including the Global Philanthropy Forum, from which I'll be blogging and fora.tv will be broadcasting over the next 3 days - sinus infection be damned).

Maybe by this time in 2009 or 2010 we'll all be used to the idea of a capital market for good or philanthropic capital markets. And that would be a good thing.

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