Stanford Social Innovation Review

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.

In the early, heady days of the venture philanthropy movement, its proponents touted it as revolutionary, while critics said it was just old wine in new bottles. The experiences of the Center for Venture Philanthropy show that the truth lies somewhere in between: Venture philanthropy is no miracle cure, yet it can be particularly good at building strong organizations, knitting together new networks, and shrinking the power gap between funders and grantees.

In the for-profit world, the term “investment” has clear meaning and investors have sophisticated techniques for spotting and growing the most promising companies. Yet foundations and other nonprofit donors have not developed similar clarity or approaches. As a result, the nonprofit sector’s greatest gems often languish well below their full potential. By better translating for-profit concepts, donors can learn how to scout out and grow the best nonprofits. Likewise, certain nonprofits can take a page from business’s playbook and learn how to attract cash for expansion.

If you don’t know where you’re going, any road will take you there, the Cheshire Cat tells Alice when she asks for directions in Wonderland. But what if Alice had known exactly where she wanted to end up, and just didn’t know which road would get her there? That is the challenge that entrepreneurs with a social mission face every day. In her autobiography, The Blue Sweater, Acumen Fund founder and CEO Jacqueline Novogratz engagingly tackles this question.

Despite spending vast amounts of money and helping to create the world’s largest nonprofit sector, philanthropists have fallen far short of solving America’s most pressing problems. What the nation needs is “catalytic philanthropy”—a new approach that is already being practiced by some of the most innovative donors. —By Mark R. Kramer

Improving the lives of disadvantaged populations—whether through better schools, after-school programs, or teen pregnancy prevention clinics—requires proven theories of change. The very development of a field depends on their diffusion, replication, critique, and modification. Yet some organizations refuse to articulate a theory of change and some funders think it would be intrusive to demand that they do so. The interests of all concerned are served by a developmental approach to creating and evaluating theories of change

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

President of the Ford Foundation.

The “social discount” may not be as steep as investors think.

When Honest Tea said no to venture capitalists,
it waded into uncharted territory.

New mechanism allows private investors to back
socially responsible startups.

Raising a Reader simplifies its message—and takes off.

A Cambodian ‘nonprofit company’ peddles
digitization—with a social edge.

Charitable donors should think of themselves as “investors” – and should expect returns, just like a stock market investor would. But too often, givers don’t see themselves this way, contributing to an inefficient “social capital market.” 

A venture philanthropist’s experience with reforming education. 

Advising old foundations & new donors.