Should philanthropists focus on ROI?

Should philanthropists focus on ROI?

News (UK)

Zoe Smith, in article for World News Views questions whether philanthropists should be focusing on getting ‘bang for their bucks’.

In ‘Venture philanthropy and the quest for aid effectiveness’ 9 July 2013, Smith says: “Philanthropic organisations are also increasingly adopting corporate ethics, opting for venture philanthropy or philanthrocapitalism.”

She says the emerging trends in philanthropy involve high levels of engagement, tailored finance, performance based management and a strong focus on measuring outcomes and impact.

Smith quotes from a paper, ‘Who’s Afraid of Philanthropcapitalism’ by associate professor of law, Garry Jenkins. He writes that venture philanthropists are, “increasingly directive, controlling, metric focused, and business oriented with respect to their interactions with grantee public charities in an attempt to demonstrate that the work of the foundations is ‘strategic’ and ‘accountable’.”

She also points to a recent article by Michael Edwards, a senior fellow at the think tank Demos. He questions the role of philanthropy in achieving social transformation, saying it “raises questions about inequality, the strings attached to funding, and the power of those who hold them to push resources to causes they approve of, perhaps even weakening or corrupting authentic social action in the process”.

However, the article also mentions new experiments in what Edwards calls ‘transformative financing’, for example the Philanthropic Ventures Foundation, which offers funding with no strings attached.

Smith ends her article by quoting from Bill Somerville’s book, Grassroots Philanthropy, which says: “We fail to realise that the chief benefits of working in a foundation – money, power and privilege – also work as the three greatest obstacles to doing a good job.” Smith says: “It is a lesson that both philanthropists and development may do well to heed.”

To read Smith’s article, visit:

  • Venture philanthropy
  • UK