Today we’re reading about recent thought on the philanthropic sector.
You might want to start with this slightly cheeky piece from the Center for Effective Philanthropy’s Phil Buchanan, who addresses some myths about financial strategy that philanthropic organizations believe:
The most effective philanthropists and foundation leaders have embraced strategy and evaluation precisely because of how much they care—how badly they want to see results in their work. Yes, strategic work requires focus and discipline—and saying “no” more often. But it is the desire to see real results that provides philanthropists with the resolve to do the hard work good strategy entails. In a way, the heart provides the motivation for discipline.
It boils down to the risk-reward equation. For the world’s investors to want to put down even 1 to 2 percent of their capital into conservation investments, they will be looking for a return on investment that makes sense given the risk, even if it is nothing more than a return of principal. Sadly, because we don’t properly value conservation, most current conservation projects don’t generate cash flows, and when they do, it is usually from either tourism, or the production of traditional commodities. Some of these activities may be “sustainable.” But in a world where the environment isn’t given a value, there can be trade-offs between generating returns and conservation.