@@@@ (4 out of 5)
Lucy Bernholz is a blogger with a Stanford Ph.D. who has been consulting with foundations about program research and design or otherwise working in the foundation sector for two decades. In this brief monograph,published online by the Stanford Social Innovation Review and available for the Amazon Kindle and as a PDF, she examines the wide and fast-proliferating options available to philanthropists and socially minded investors today — and offers guarded predictions about the future course of several key present-day trends in this field. Bernholz does a masterful job of covering the waterfront, scanning every new development from the B Corporations and L3Cs on the frontiers of Triple-Bottom-Line business in the U.S. to the social capital exchanges coming into being in Brazil, South Africa, and England. She leaves no stones unturned.
Bernholz identifies three high-potential trends as likely keys to the future financial undercarriage of the social sector: impact investing, hybrid organizational structures, and new platforms for information. These seem as good a set of choices as any. Impact investors, in Bernholz’s view, are “funders focused on using investment funds as well as grant dollars to pursue their goals.” Hybrid organizational structures “bring together familiar business practices — such as earned revenue or return on investments — with the mission and purposes usually associated with the social sector.” In this category, she singles out B Corporations (for-profit companies dedicated to public benefit) and L3Cs (low-profit, limited liability companies) for special attention. New platforms for information, mostly online, encompass an extraordinary variety of efforts to make widely available the hard data demanded by all investors and most philanthropists before they will put their money to work in the business of social change. Among them are the Web sites (such as GlobalGiving and Kiva.org) that link individual donors or investors with specific projects, a growing number of collaborative efforts linking donors or social investors to one another, and online communities for foundation staff and trustees.
Squarely zeroing in on conditions in 2010, Bernholz asserts that nonprofits, already reeling from a year in which a majority laid off staff, will face even harsher conditions this year. Many of the 1.5 million organizations in the U.S. nonprofit sector were widely predicted to go out of business in 2009. They may actually do so in 2010, Bernholz believes.
There’s a lot more that’s worthy of comment in this very slim monograph. I’ll refrain from writing more, though, since I’m fearful that this review might end up longer than the work it reviews! If you’re involved in any sort of effort to promote social betterment through either investing or philanthropy, read this little book.
FYI: my company, Mal Warwick Associates, is a Founding B Corporation and a Certified Green Business, and I have been a member of the Social Venture Network since 1990.