Building the market for impact

Authored by: Tessa Hebb , Sean MacKinnon

The Routledge Companion to Philanthropy

Print publication date:  May  2016
Online publication date:  May  2016

Print ISBN: 9780415783255
eBook ISBN: 9781315740324
Adobe ISBN: 9781317579717


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The past decade has seen the emergence of new trends in strategic philanthropy. While traditionally a separation between the investment arm of a philanthropic organization – in charge of ensuring retention and growth of endowed capital – and its grantmaking activities – responsible for delivering organizational objectives and mission – was commonplace, strategic philanthropy tries to align all aspects of a philanthropic organization with its mission. Increasingly, constrained resources have played a central role in this development: particularly in the period following the 2008 financial crisis, philanthropic organizations began to ask why they should only concern themselves with the distribution of five percent of their resources, while the remaining 95 percent is invested without regard to mission (Godeke and Bauer, 2008). This simple question sparked philanthropic organizations to think more critically about the strategic use of all resources under their control in order to achieve their goals. As a result, many philanthropic organizations are no longer content to simply give grants to worthwhile causes: they want to utilize all their assets in alignment with their missions. Equally, they want to ensure that the outcomes generated from these approaches are meaningful and measurable. Such a shift replaces a grantmaking mentality with a new investment-driven paradigm.

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