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| Opportunities & Exposures |
Many Happy Returns
Ralph Smith
08/02/2004
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Impartial Assessments
Many philanthropy experts, however, doubt that much
will change in the foreseeable future. In their view, progress toward a rational
capital allocation process will be slowed by a preference for pluralism, the
inability to agree on even basic terminology and the absence of standards to
evaluate performance, assess risk and measure social returns.
Fortunately,
current trends support a more optimistic view. The new dollars available to
philanthropy in the coming decades will dwarf today’s philanthropic behemoths.
Bernholz, philanthropy authority Jed Emerson and a handful of nonprofit
reformers are no longer wandering in the wilderness huddling together for
warmth. Mainstream organizations, such as the Aspen Institute and Urban
Institute, are building upon the pioneering work of the Roberts Enterprise
Development Fund, which has created a formula that gauges the success of the
nonprofits it backs with for-profit impartiality. We are making significant
strides in developing the concepts, terminology, standards and tools needed to
describe and measure performance, risk and, yes, even social returns.
More
promising than anything else is the growing realization that efforts to make the
social sector more effective will fail without improved access to the dollars
needed to grow and scale social-purpose organizations. The result has been the
development of a number of social investment funds. One such fund is Venture
Philanthropy Partners (VPP), which raised $32 million from private donors to
invest in community-based organizations in the Washington, D.C., area. To date,
VPP has committed $19 million to investment partnerships with nine
high-potential organizations serving children of low-income
families.
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