Emerging ways to fund social change

There has been a pop in articles and commentary since the start of September that focus on different ways to fund positive and effective social change. One New York Times piece, “Investing to Make a Difference Is Gaining Ground” affirms that we were onto something real when we started Giving Strong three years ago – that many funders are seeking to evolve beyond the traditional model of “checkbook charity” to be more creative and more engaged.

Some of this is generational – from the now retiring Baby Boomers who came of age in the feel-good-do-good hippie years in the ‘60’s and ‘70s to the socially minded millennials who seek career opportunities that also contribute to a better, stronger community.

This evolution includes more than successful business people and ultra high net worth individuals. Long established foundations are making the shift too. Boards and trustees are still maintaining the integrity to their founders’ intentions and at the same time evolving their modes of funding change, reaching more broadly to investing in enterprises in addition to non profits. The Hill Snowden Foundation recognizes the value in this – whether you call it, as they do, finding a focus, or call it stating your purpose or knowing what you stand for. They evolved from writing checks to charities to becoming recognized leaders in social justice.

Forward thinking companies are doing this too. The Tory Burch fashion house through the Tory Burch Foundation is supporting Elizabeth Street Capital, designed to provide women entrepreneurs in the U.S. with access to affordable loans, mentoring support and networking opportunities. This is corporate giving blended with community investment – impact investing at work.

One mode gaining in popularity and getting more scrutiny – and criticism – is Donor Advised Funds (DAFs). This is a vehicle to set aside gifts to non profits and receive a tax benefit, except it’s not always working that way. Critics like renowned financier and philanthropist Lewis B. Cullman calls out these charitable vehicles in an article “Stop the Misuse of Philanthropy!” noting funds all to often earmarked for charity are never dispersed.


About christengraham

President of Giving Strong, Inc. Christen advises businesses, foundations and families for how to make a greater social impact.