On philanthropy and environmental change

(This post started as a response to The Green Skeptic's comment on this post).

In his comment, the Skeptic notes his shift to ASHOKA and social enterprise after years in nonprofit work - in his words:

"Why? In part because of my frustration (stemming from my previous experience with The Nature Conservancy) with the slow progress and impact philanthropy has had in the face of massive environmental issues.

The amount of philanthropic capital going into the environment isn't commensurate to the challenges. And I started to wonder if it ever would be. The slice given to the environment has remained stagnant at 3-4 percent even in the wake of green becoming the new black."

His experience is important for us all to consider. Does philanthropy have enough heft (influence, intellectual capital, and financial) to make change on major issues? Will social enterprise?

My belief, as has been stated on this blog repeatedly, is that we can only solve social challenges through the combined contributions and creativity of all sectors. There is no reason we should expect any single sector to ever solve our social/environmental problems - simply because these problems are a result of the dynamic failures of all of the sectors. In other words, business, government and independent action created our social ills, they will all have a role to play in solving them.

That said, vision and creativity are clearly important elements of philanthropy/social enterprise making an impact - and being part of tri-sector solutions.

Here's an interesting provocation about how this all might play out - the Futurist Magazine (published by World Futures Society) has this idea in its Outlook 2008 section (Nov/Dec 07 issue):

"Socially responsible investing may get a boost from venture capitalists. Investment in green or clean technologies such as such as alternative fuel development is gaining momentum. This new interest by venture capitalists follows a trends led by individual investors and mutual funds to weigh social values alongside financial reports."

Here's a link to free abstract - full article is available for purchase.

So - back to some of this blog's favorite themes:

• Solutions will require that each sector make its best contributions in relationship with those of the other sectors
• Aligned investing is on the rise

I recently read a comment that foundations should invest in market-based solutions because none of our social problems were created by a lack of grant dollars. While I agree with the recommendation (in considered moderation), this logic is faulty. Of course, the problems were not caused by lack of grant funds. It is much more likely that they were caused by market failures, in which case investing in market solutions is tautologically ridiculous. We should think across sectors and not be limited by archaic expectations of roles - however, we also should not throw logic out the window nor assume any single strategy is the path to solution.

That said, if we look to the dynamic interactions between public/commercial/independent action that resulted in our environmental challenges, our human rights failings, our educational failures, our health care challenges, etc. than we can craft potential investments and solutions to these challenges by:

• Using resources from each sector in new ways
• Jointly designing solutions with input from each sector
• Considering the limitations of each sector, mapping how these interact with those of the other sectors, and investing knowledge and resources in ways that directly counter those aggregated failures
• Considering "the grey area" - sometimes called the fourth sector - as a new blend of the first three, not a silver bullet replacement
  

Tags: philanthropy, environment, socialenterprise, alignedinvesting