News and Insights
Philanthropic Ventures Take Center Stage
May 16, 2023
Originally posted on O’Dwyer’s on May 16, 2023.
Philanthropic ventures have always been essential in addressing pressing issues. From climate change to social justice to expanding opportunity for historically underserved populations, when government and businesses have been slow to act, there has always been a place for philanthropists and their organizations. Today, corporate leaders have become increasingly reticent to speak out about social issues in the face of modern political divisiveness, nonprofits and philanthropists have a unique opportunity, and indeed a responsibility, to take ownership of critical societal conversations.
Threading the Corporate Responsibility Needle
Understanding why corporate leaders have become wary when tackling pressing social issues is important. The political landscape is increasingly polarized, with issues such as climate change, inequality, and immigration becoming highly tribal in response. Corporate leaders may fear that taking a stand on these issues might alienate a significant portion of their customer base, and they wish to avoid the backlash that might result at all costs. Additionally, corporate leaders are under pressure to maximize shareholder value and need a defensible position on ESG commitments and outcomes.
However, these concerns should be balanced against businesses’ broader responsibilities to society. Consider that companies significantly impact the communities in which they operate, and they have the power and resources to effect positive change that other pillars of society might lack. One company alone cannot solve for these complicated environmental and social issues, and corporate action catalyzes social investments from more businesses. But the fact is that communications on socially responsible investments are a crucial piece of the puzzle, and even if corporations are taking action if they’re not speaking about it out of fear or complacency, they won’t reap the benefits.
Purpose can’t become only an internal narrative.
The Role of Philanthropic Ventures
This is where philanthropic ventures come in. Unlike companies, philanthropic ventures do not have to worry about alienating customers or maximizing shareholder value. Yes, they are beholden to boards, but their reason for existence is to create positive social impact. Philanthropic ventures can work collaboratively with companies, governments, and civil organizations to activate innovative solutions to social challenges across the entire spectrum of society.
Moreover, philanthropic ventures are often more flexible and agile than companies, able to pivot quickly to address emerging issues and respond to changing circumstances. This makes them well-suited to tackling the pressing social issues facing our society. Even those associated with major companies might be able to tread ground that might not fit with the sister corporation’s ethos. Consider the Gates Foundation, which focuses on improving global health and reducing poverty. It’s naturally associated with Microsoft via the founders, Bill and Melinda. Still, through partnerships with governments, NGOs, and other stakeholders, the foundation has made significant progress in eradicating polio, reducing maternal and child mortality, and improving access to education entirely separate from Microsoft itself.
However, philanthropic ventures – particularly truly independent ones – face their challenges. For one thing, from a funding standpoint, they are often under-resourced and lack the institutional support that companies enjoy. They also must navigate a complex landscape of regulatory and legal requirements, making gaining traction in a crowded activist ecosystem difficult.
Nevertheless, philanthropic ventures have a unique opportunity to take ownership of solving social issues and to fill the conversation void left by reticent corporate leaders. There are a few strategies to consider:
- Collaboration and Partnership: One of the most effective ways philanthropic ventures can address pressing social issues is by highlighting collaboration with other organizations, including companies. By working together, they can pool their resources and expertise, achieving a more significant impact than they could on their own. Suppose companies are hesitant to take credit for the effort. In that case, nonprofits can step up and drive the impact narrative – building awareness to spur funding and building credibility for the corporate partner investing in the programs.
- Advocacy and Policy Change: Another way philanthropic ventures can take ownership of solving social issues is by engaging in advocacy work and promoting policy change. While companies may be reticent about taking a stance on controversial issues, philanthropic ventures can speak out and unapologetically advocate for change they are on the front lines creating
For example, a philanthropic venture focused on environmental issues could advocate for stronger regulations to reduce carbon emissions. By working with policymakers and other advocacy groups, they could help to bring about meaningful change.
- Direct Action: Finally, philanthropic ventures can directly address pressing social issues in innovative ways – and communicate about both successes and programmatic challenges. Nonprofits as social incubators can lead the debate over what’s – working and what’s not – and transparently why.
For example, a philanthropic venture focused on addressing homelessness could provide shelter and support services to those in need while liaising with local and state governments to help alleviate the homelessness crisis through new legislation or regulations.
Ultimately, the world needs difference-makers, no matter where they come from. The realm of philanthropy is a familiar frontier in the fight for a more just, equitable, and sustainable world. Still, it is in a position now, with increased political polarization and other factors, to take center stage.
They can be bold, be creative, and take risks in a way that corporations either can’t or won’t, and with the size and scope of the problems we face, that’s precisely what’s needed.
POSTED BY: Amy Terpeluk
