Marshall Memorial Fellowship: The Economic Power of Strategic Philanthropy
I’ll start by potentially stating the obvious: there is real economic power in strategic philanthropy.
A core reflection on the many lessons of the Marshall Memorial Fellowship centers on how my definition of economic power continues to shift and the role civil society plays in highlighting that power. This experience has deepened my appreciation for the importance of leveraging philanthropic capital to build new ownership and business models that move away from charity and work towards producing alternative marketplaces that position community as owners of socially motivated enterprises.
From Chicago to Brussels, from London to Bucharest, rich examples abound of the ways philanthropy has started to engage in impact investment as a tool to attract new capital and tackle big challenges. Across these same cities, there are also impactful examples of social entrepreneurs creating business models with a focused lens on social good. Yet, in each place, I also found myself grappling with the same questions: who’s engaged in the investment opportunity, and who owns the profitable outcome?
I believe philanthropy is uniquely positioned to serve as a catalyst for new and diverse ownership. Beyond bringing new capital to the impact investment and social entrepreneurship marketplace, it also has the potential to engage racially and ethnically diverse leaders in conversations on the future of the social impact sector. Building a community of social investors, however, will also require an intentional approach to creating equity in voice and ownership. This can also mean blurring the lines and power dynamics that exist between donors/institutions and non-profit/non-governmental organizations.
Right now there is a natural opportunity to activate this dialogue through a transatlantic lens. U.S.-based philanthropic institutions continue to play a leadership role in supporting non-profit/non-governmental organizational infrastructure across the EU and in emerging democracies. Similarly, in many EU partner countries, innovative investment and grant-making initiatives are building powerful social entrepreneurial hubs and cooperatives that are transforming ownership of marketplaces among ethnic minorities and in rural communities. These institutions are also building local partnerships with organizations throughout the U.S. to create deeper understanding of global needs and investment opportunities. Finally, across the U.S., localized philanthropic organizations are beginning to reinvest in racial equity and diversity conversations with hopes of bringing new voices to the leadership table.
I’m ending this month long journey with a genuine belief that the collision of these conversations and initiatives can profoundly shape the marketplace for social good. Beyond diverse perspectives, we need diverse investors and owners positioned to disrupt philanthropic systems in ways that positively impact the people charity has set out to serve.
Eric Lugo, Founder & Principal, Conciencia Ventures, Chicago, IL is a Spring 2016 Marshall Memorial Fellow.
The views expressed in GMF publications and commentary are the views of the author alone.