Nov 20, 2006

Annual Philanthropy Reports: The Highlights

by Laura Starita

Last week The New York Times, Slate and BusinessWeek all issued their annual philanthropy reports, special sections in their publications focusing on the year’s trends in philanthropy. BusinessWeek’s effort focuses on its list of the year’s top entrepreneurs, a phenomenon we’ve written about in previous articles. The Times and Slate mostly concerned themselves with the nascent phenomenon of hybrid philanthropy, or the marriage of for-profit initiatives with social causes, what Philanthropy Action calls good business. Both publications highlight both the work of new-generation philanthropists such as Bill and Melinda Gates, whose work is funneled through a traditional foundation, as well as that of Pierre Omidyar and Sir Richard Branson, former entrepreneurs who are now applying aggressive business strategies to philanthropic ventures, in many cases by forming for-profit investment firms whose portfolios cross into the domain currently occupied by foundations. The Times highlight other ways in which business and philanthropy are converging, such as in retail ventures like (Product) RED, the newest Bono-sponsored effort to get retail brands to donate portions of proceeds from RED-branded products to suport anti-AIDS efforts in Africa, or in thrift stores such as Goodwill and others, whose proceeds go to programs that train and employ those without jobs.

One consistent motivation cited by the founders of these business/philanthropy ventures is to do better than those who came before. “We need to be open to bigger, bolder reform because the hard truth is philanthropy 1.0 hasn’t worked well enough,” Steve Case, CEO of AOL told a group of foundation executives in January. “If you’ll forgive the computer metaphors, our system needs an upgrade.” There is a certain urgency to what they are doing, an impatience perhaps rooted in the way some of them made their fortunes in the first place - quickly, on the highs of the late-1990s Internet boom.

It remains to be seen whether philanthropy 2.0 can yield better results. If the analogy of these new business-philanthropy hybrids holds to the Internet era, we are likely to see a great many dramatic failures and a few successes, which would be a shame given the amount of money we are talking about and its potential for good. We hope the connection doesn’t hold - after all, these are the guys that made it, after all! And we hope these philanthropreneurs can take all the positives of the foundations and marry it with the measurement and accountability of business to change the impact of giving.

New York Times: What’s Wrong With Profit?
Slate: Slate 60 Philanthropy Series
BusinessWeek: The Top Givers