Nov 15, 2006

Venture Philanthropy or Just Effective Philanthropy

by Laura Starita

In the late 1990s, a number of Internet-only banks were launched with much fanfare and free checking. One of them, Wingspan, was actually a funded by Bank One, yet its young, hungry executives believed the bureaucrats in the main house were going to be out of jobs within months on account of the online banking revolution. Well, seven years later, dear reader, you have likely never heard of Wingspan, though you probably use a pretty useful online banking service offered by your traditional brick-and-mortar which, though slow out of the gate, eventually implemented the ideas of the young and hungry.

This same process of revolution resulting in evolution is happening in the philanthropy sector on account of the venture philanthropy movement of the late-1990s, argues Slate. Concurrent with the Internet boom, a number of online entrepreneurs came forward saying the traditional mode of philanthropy didn’t work and a green field approach was needed. The problem was:

Some early venture philanthropists who waxed passionately about “investing like venture capitalists” had never been venture capitalists, nevermind philanthropists. And some weren’t advocating a new style of philanthropy - they were just describing philanthropy that works.

Philanthropy that works ... now there’s a movement to get behind.

Slate: Venture philanthropy—What is it?