Andrew Wolk

Seeking the Next Generation of Philanthropists for a Twenty-First Century Approach to Solving Social Problems

Posted on 06. May, 2010 in Social Capital Markets, Social Impact Measurement, Social Innovation

A familiar refrain to any reader of this blog is that the United States is not currently using its resources for solving social problems as effectively as it could be.  According to Giving USA, U.S. foundations and individual donors spend more than $300 billion annually on contributions to charity.  By U.S. Census Bureau figures, our federal government spends another $1 trillion per year to provide direct benefits to constituents, award service grants and contracts to nonprofit and private service providers, and employ government agency staff. And yet, our nation’s social issues, in many areas from poverty rates to graduation rates to obesity prevention, are getting worse and not better.

What will it take to ensure that resources – not only money, but also in-kind donations, volunteer time, and partnerships – go to the organizations that are best positioned to create social impact? One key factor, I believe, is the emergence of a new generation of philanthropists – social impact investors, we might call them – who prioritize using information about nonprofit performance to guide their decisions. We need these leaders to help change the current culture of nonprofit giving in the United States. The challenge is that donors – whether they are foundations, individuals, or government agencies – often do not have the information they need to ensure that their resources are going to organizations with promising new ideas or proven, high-performing solutions.  As a result, too often, money flows to organizations based on existing relationships or aspirational mission statements, rather than a clear understanding of the outcomes that an organization is seeking to achieve and the results that it has already demonstrated.

On Tuesday night, Root Cause hosted its 7^th annual Social Innovation Forum showcase event, which provided a glimpse of what this new generation of philanthropists will look like. The event, modeled after private-sector venture capital forums, featured six Boston-area nonprofits , identified through a rigorous selection process, as up-and-coming organizations with promising new approaches in the areas of workforce development, obesity prevention, healthy aging, homelessness, empowering women and girls, and youth development through the arts. Local foundation leaders and individual donors attended to hear the organizations pitch their approaches, with an emphasis on their performance to date, and the resources they need to increase that performance and spread their ideas.

These leaders’ responses were enthusiastic. During the event, we asked attendees to commit some resource, be it a new connection, an in-kind or monetary donation, or a date to meet for coffee, to one or two of the organizations they found most interesting. Root Cause then collected these commitments and posted numerous examples through the #sif2010 hashtag on Twitter. These resources, I believe, will help these promising nonprofits creating lasting social impact for Boston’s residents.

Looking ahead, as we work to create a vibrant social impact market that fosters social innovation and directs resources based on performance, we will need more of these philanthropic leaders who demand information about performance and are ready to direct resources to those organizations with the most promising and proven approaches.