Are We at an Inflection Point for a New Kind of Social Impact Philanthropy?

One of the silver linings of a deadlocked congress is that the President has been forced to come up with more creative ways to stay relevant. Rather than just convening the White House conference that ends with a commission report that may or may not make the 24 hour news cycle, the administration has decided that much more good can be done by leveraging private sector philanthropy in connection with governmental actions (such as  regulatory changes) that don’t need the blessing of Congress. Basically  it all goes back to the idea that companies can get rich and  do the right thing and that government should be there to support what they do. This message ever since the G-8 Social Impact investment forum in London last year seriously endorsed a new more progressive minded approach to aligning capital formation with solving large social and economic  issues culminated in an announcement from the White House this week involving  twenty private-sector investors, including the McKnight, Ford, and MacArthur foundations to commit  a collective $1.5 billion dollars to a public private partnership. The  initiative’s goals include delivering “affordable housing and healthcare for low-income communities, carbon footprint reductions for some of the America’s least energy efficient buildings, fresh produce to food deserts, financial services and education to help lift millions out of poverty.”

All of this activity has generated some discussion as to whether we are now at an inflection point here in the development of a new kind of philanthropy? For example, Jean Case, CEO of the Case Foundation took to the Huffington Post to proclaim so “A new day has dawned. Impact investing offers a unique opportunity to "invite business in" - not limiting their role to that of their foundations or social responsibility programs, but rather enabling and encouraging them to use their core areas of expertise, or their established products and services in these efforts.” Case gives the example of Warby Parker, “using fashion and consumer demand to bring eyeglasses to the developing world at scale.”  Why are philanthropies needed when their funding could easily be drowned out by the private sector? For several reasons, philanthropies can invest in that part of the project where the risk of not getting a high enough rate of return (building affordable housing for example) would preclude (based on their fiduciary duty)  a private sector endowment manager from investing. They might also according to the influential report, Private Capital, Public Good:  How Smart Federal Policy Can Galvanize Impact Investing — and Why It’s Urgent by the US Advisory Board  use their own non charitable investments which can all count towards their mandated annual five percent payout. The investments will be watched carefully for impact and if the indicators suggest positive synergies we can expect that this sector with government help will grow and the old divisions between governmental, corporate and private sector philanthropy will for start to fade as a new urgency enters the minds of the global financial elite to save the planet. This shift in thinking cannot come a moment too soon as the Millennials are expected to receive a transfer of $41 trillion in the coming decades and will want to continue to align their investment priorities with their values.

Future of Climate Change

Amy Luers

We are now accepting that the prospects of climate reform are quite bleak.  But the effects of it are quite real, as Luers and Skar write,  the effects of climate change are now real,

"Populations across the globe are beginning to perceive the real or apparent effects of a changing climate. The climate threat is increasingly equated with present-day devastation wrought by storms, floods, wildfires, droughts, and heat waves, rather than abstract catastrophic threats such as a collapse of the West Antarctic ice sheet or the sudden shutdown of the thermohaline ocean circulation (dramatized in the 2004 science-fiction thriller The Day After Tomorrow). "

These events have forced the media to see climate change, "as the magnifying lens through which we view all other problems: food and water, national security, human health, and poverty." As a result "the climate change narrative has changed. A greater number and diversity of actors are aware of and involved in addressing climate change; yet each is motivated by different concerns, driven by different values, and focused on different outcomes. For many, a rise of average global surface temperatures of two degrees Celsius is not a clear line between the acceptable and unacceptable impacts of climate; we are experiencing unacceptable affects from climate today."

But as the authors write while the narrative may have changed  "the framework originally set in motion in 1992" has not.  The authors argue that "It is time to restructure policy discussions of the climate problem from a simple pollution problem to a more complex risk-management problem. This will mean shifting the goal from averting a global catastrophe to minimizing global collective suffering. This will require: taking on the climate threat as a continuum of risks from variability to change; no longer debating whether any given weather event was the result of climate change; recognizing that stakeholders hold different values and risk perceptions; and addressing climate mitigation and adaptation as truly integrated and equal approaches to managing climate risks. By restructuring the climate challenge as minimizing collective suffering, we may open up new opportunities to address the multiple facets of the systemic risks posed by climate."

It sounds like a more productive approach. Rather than confronting the climate change deniers who may not look at the same facts the same way we could find more opportunities to as the authors challenge us to do, to "minimize  global collective suffering."