For-profit investment seen boosting philanthropy

The nonprofit sector could boost its effectiveness by collaborating with the for-profit world, Jacqueline Novogratz, CEO of venture-philanthropy firm Acumen Fund, says in an interview with The McKinsey Quarterly.

Though many see the link between public and private investment in philanthropy as exploitive, it holds promise for greater effectiveness in solving global problems, she says.

“I see real power in the private sector as a way of listening, as a way of creating efficiencies,” she says.

Novogratz told the journal she was frustrated by people who insist on looking at philanthropy theoretically, when cooperation with the corporate world has the practical capability to help millions of people.

And the language of marketing, far from being exclusive, facilitates conversations between social classes, she says.

“In a way I think it’s demeaning not to think about marketing to the poor,” she says. “I think it’s not caring enough about what they want, because it’s all about what you think is right for them.”

And organizations that ignore market forces, she says, ultimately can hurt their missions by driving off more traditional investors.

Significant obstacles to this collaboration, Novogratz says, include limited funds and local politicians in foreign countries, many of whom feel threatened by social change.

Despite the problems brought about by the economic crisis, Novogratz say, she hopes it will present new opportunities to integrate philanthropy and the corporate world.

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