Dear Reader:
We are very pleased to bring you our fall 2012 edition of the Philadelphia Social Innovations Journal (PSIJ), titled “Philanthropy, Social Enterprise and Impact Investing: New Approaches to Investing Capital.”
At the heart of this edition is a debate: a debate about the experiences of early adopters in the space of impact investing versus traditional philanthropy. Impact investing is about investing money in an organization—either for-profit or nonprofit—with the expectation that it will generate both social and financial return.
This edition is not meant to pin one side against the other, rather it is meant to show that it takes all three—philanthropy, social entrepreneurship and impact investing—to address problems in an efficient and impactful way.
Philanthropy money can be catalytic, allowing nonprofit organizations to experiment with new programs and new ways of addressing their missions. Philanthropy money can also be for sheer pleasure and enjoyment; it simply feels good to help someone in need. Philanthropy is driven by personal values and should remain that way. Social entrepreneurs have the bright ideas and question the way things have been done in search of doing it better. These individuals need help to incubate their ideas and ultimately get their ideas to market. Impact investingseems to be about trading some amount of profit to invest in good ideas that wouldn’t have happened otherwise. These are early days for the approach and impact investing is still small compared to philanthropy. There is no doubt that it is an important development and a necessary bridge to scale good ideas.
This edition of the PSIJ, guest edited by Teresa Araco Rodgers, features more than 30contributions from leaders in philanthropy, business and government, and other critical perspectives. Going through the process of working with the many writer contributors to this edition of the PSIJ, three themes clearly emerged.
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There is a need to educate those with capital to move beyond just thinking about the required payout or a philanthropic grant, to also think about their investments as a way for them to increase their impact and complement their grantmaking.
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There is a need to provide support to individuals—those social entrepreneurs—with good ideas. Support means incubating ideas and turning the good ideas into businesses focused on impact. There is also a need to support executive directors at traditional nonprofit organizations as they rethink their business models to ease the constant burden of raising philanthropic capital.
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There is a need to make continued investments in the infrastructure to better link those with capital to those organizations, whether nonprofit or for-profit, focused on impact.
Regardless of where you stand, the common thread seems to be the pursuit of mission.
It is more useful to watch what people do rather than listen to what they say. In reality what they are doing is not that much. It is difficult to find fundable deals and the code has not been cracked on how to measure impact. It is all still very much a field in its infancy. Despite the level of maturity, the movement is challenging the status quo and forcing people to have conversations and think about these concepts. We, at the PSIJ, believe in that conversation.
We are excited to present multiple points of view from traditional philanthropists who talk candidly about relationships with nonprofit grantees, to those early adopters investing for impact—people who are part of funding collaborations or who are contributing to the overall infrastructure. We give voice to an everyday philanthropist using his or hertime, treasure and talents and we give voice to an executive director at a local nonprofit who is embracing elements from the impact movement.
As always, thank you to our readers and to our sponsors, whose support is essential to what we do. We’d like to acknowledge the Alliance for Children and Families,Threshold Group, Wharton, Investors’ Circle and University of Pennsylvania Fels Institute of Government for their particular support of this edition of the Journal.We also want to recognize and thank our other advisory board members, including the Scattergood Foundation, United Way of Southeastern Pennsylvania and New Jersey, The Philadelphia Foundation, Public Health Foundation, Public Health Management Corporation, Independence Blue Cross Foundation, Green Tree Community Health Foundation, Independence Foundation, St. Christopher's Foundation for Children, Inglis Foundation, Barra Foundation, Knight Foundation, Bank of America, The Patricia Kind Family Foundation, Wells Fargo, Sage Communications and University of Pennsylvania.
We hope you will enjoy this edition and think you will find great passion in the writing. While you may not agree with every perspective offered, the hope is that you will walk away with a better understanding and a curiosity about what comes next.
Finally, looking forward to upcoming editions of the PSIJ, in the winter edition, we’ll bring to you an issue focused on regional partnerships from strategic collaborations to mergers.
Very truly yours,
Teresa Araco Rodgers, Guest Editor
Nicholas Torres, Publisher
Tine Hansen-Turton, Publisher