Stanford Social Innovation Review

MacArthur “genius” prize winner creates drugs for the developing world.

Human-caused climate change, sharply declining conventional energy sources, and population growth are threatening the very platform of human life. Yet only 5 percent of U.S. foundation spending goes to the environment, and a paltry 2.9 percent goes to science and technology.

To ensure that baby boomers’ wealth does not fall short of its philanthropic potential, Randall Ottinger suggests applying portfolio theory to make wiser social investments.

In virtually every for-profit industry, success hinges on producing more goods or services at a lower cost without compromising quality. But increasing productivity can work in the nonprofit world, too, as an examination of three healthy nonprofits shows.

Social enterprises combine the best of the nonprofit and for-profit worlds, but that very innovation has made it difficult for them to raise money. Philanthropists are reluctant to give grants to profit-making organizations, and commercial investors are wary of investing in organizations that are driven by a social mission. The authors explore the social enterprise capital market and offer short- and long-term solutions to this funding gap.

Management wisdom says that nonprofits must be large and in charge to do the most good. But some of the world’s most successful organizations instead stay small, sharing their load with like-minded, long-term partners. The success of these networked nonprofits suggests that organizations should focus less on growing themselves and more on cultivating their networks.

When the Salk polio vaccine proved to be effective in 1955, the National Foundation for Infantile Paralysis had to choose whether to close up shop or to pursue a new agenda. The foundation first broadened its mission, but lost donations, volunteers, and public support. After honing its mission to birth defects, however, it recovered. Here’s how the organization that eventually became the March of Dimes planned – and survived – its transitions.

For-profit businesses can efficiently and quickly raise large amounts of money to fund growth and innovation by tapping equity capital—money that people invest in a company in return for ownership and a share of profits. The nonprofit world has no corollary, making it difficult, costly, and time-consuming to raise money. In this article the author explores ways that nonprofits and funders can create their own version of equity capital, and, just as important, develop an equity approach to doing business.

How did Room to Read create more than 5,000 libraries in less than eight years? The media have largely focused on founder John Wood as the catalytic figure in the organization’s success story. Of equal importance, however, is Room to Read’s solid and replicable operational choices.

Part academic institution, part activist group, part think tank, ATREE crosses sectors to breed a new species of conservation agency in India.

GreenNote helps students with no credit history obtain college loans.

How foundations can best support social innovators.

New research estimates the value of the services provided by faith-based organizations.

For-profit executives use business models—such as “low-cost provider” or “the razor and the razor blade”—as a shorthand way to describe and understand the way companies are built and sustained. Nonprofit executives, to their detriment, are not as explicit about their funding models and have not had an equivalent lexicon—until now. —By William Landes Foster, Peter Kim, & Barbara Christiansen

From pink ribbons to Product Red, cause marketing adroitly serves two masters, earning profits for corporations while raising funds for charities. Yet the short-term benefits of cause marketing—also known as consumption philanthropy—belie its long-term costs. These hidden costs include individualizing solutions to collective problems; replacing virtuous action with mindless buying; and hiding how markets create many social problems in the first place. Consumption philanthropy is therefore unsuited to create real social change. —By Angela M. Eikenberry

The secret ingredient of radical innovation

Funders, government agencies, and donors
get lost on the labyrinth.

High-engagement philanthropy: What grantees say about power, performance, and money.