A panel of distinguished nonprofit leaders recently took up this question at the Aspen Institute, in Aspen, Colo. Alumni of the Aspen Global Leadership Network met for four days in July to brainstorm and debate about the world’s most-pressing challenges. Yours truly was invited to eavesdrop (with expenses paid by the institute) on those debates, under one condition – I can tell you what was said, but I can’t tell you who said it.
So without naming names, I can tell you that there were about 20 nonprofit leaders, from major funders that you’ve probably heard of, if you read this blog, to small community organizations trying to make change neighborhood by neighborhood, both in the United States and around the world.
Here are three ideas on the future of the nonprofit:
For decades, nonprofits looked to donors – private foundations, individual philanthropists, governments – for most of their expenses. The argument, perhaps a good one (at least for awhile), was that there’s simply no money to be made in, say, running a domestic violence shelter or feeding the poor during a famine.
No profit motive means no investment, and no investment means no money to save or change lives.
One Aspen leader from the US put it this way: Some nonprofits, he said, are stuck on “the philanthropy dole.”
But, as one Aspen leadership fellow from Latin America observed, “There’s been literally trillions and trillions of dollars given through nonprofits, with limited results.” As a businessman turning toward social change ventures, that nonprofit model baffles him.
“If you give me money, I produce results,” he said of his primary field. “If I don’t produce results, I don’t get more money.”
Enter the world of social-impact investing, or socially responsible investing. In this world, investors are willing to trade some – or perhaps all – of their possible return on investment (ROI) for achieving some social change, or “social return.”