Philanthropy’s Evolution for The Solution Revolution

By Mark Holloway, Executive Director, Social Venture Partners Portland

We are no doubt in a wild time in history.  On the depressing side: our US Congress remains the most unproductive in history, our climate changes at a pace that is almost perceptible, and the Arab Spring seems to be giving way to some dark days of winter like we experience in the Pacific Northwest. But William Eggers looks at the bright side of history.  He points out that our rapidly evolving landscape has extended great possibilities for social entrepreneurs and change-makers.  The Solution Revolution and Eggers enthusiasm for it are an energizing reminder of what’s possible.

Citizens in Boston can take photos of graffiti and potholes and submit them to a city bureau to help with identifying needs for attention.

We all help digitize old manuscripts when we enter distorted letters that want to recognize that we’re human thanks to the nutty ideas of ReCAPTCHA’s founders.

And Zero Percent in Chicago offers food donors a simple tool to close the gap between the 30-50 percent of all food discarded and the 1 in 6 who need the nourishment.

These are but a few of the solutions featured in Eggers book and talk. They give me great hope for two reasons.  One, because it’s clear that we don’t have to wait on the powers-that-be to solve our problems, as we might have in recent generations. The “wavemakers” in his Solution Economy are citizen changemakers, innovators and investors walking our streets every day. This brings me to my second point of encouragement…that they are walking MY streets every day. Like Eggars’ examples, I can point to innovations and wavemakers at home in Portland. CASH Oregon uses the talent and time of citizen volunteers for thirteen weeks of the year to provide free tax preparation (and compassion) to families living on the margin, returning more than $56 million to 55,000 families in 2013 alone.

So what does this mean for Social Venture Partners and other foundations and investors? It means, for one, that we have to get with it.  It’s not enough for us to find well-qualified grantees and offer them money (and in SVP’s case, our talent and influence). We are an integral part of the Solution Economy and must adjust our investments to suit its new contours. Fortunately, we have examples here as well. Mission- and program-related investing is making capital available to “for-purpose” business models like social enterprise and pay-for-success models. There are foundations funding prizes and challenges to incentivize innovation while others are funding fellowships for breakthrough leaders.

But these are still the exception, not the rule in foundations and philanthropy. We still seem stuck in risk-averse charity models. We only fund those who have logic models, financial stability, and a nonprofit status.  Eggars points out that there are innovation incubators popping up everywhere but cautions against too much hope until there is funding for scale. This must be one of our roles in formal philanthropy. If foundations with staff and trustees who have insight into the social landscape don’t lead the way on funding wavemakers, business models that scale, and new technologies, we stunt the solution ecosystem. With our due diligence and early funding, we give confidence to those with money pent up in donor advised funds, checkbooks, pockets and piggy banks. Those who do this for a living lead the way for those who want to make a difference in their giving.

We have the opportunity to be leaders in the Solution Economy.  Eggars encouraged SVP—and venture philanthropy more broadly—to “look beyond nonprofits.” But we know that it will take more than looking beyond. Philanthropy must look within at their own purpose. Even broadly speaking, philanthropy’s mission is to help provide our communities with more happiness, health and well-being. In this Solution Economy, the best opportunities to fulfill that mission may not come in traditional grant requests, neat financial statements, or proven outcome reports. If we all dedicate even 20% of our charitable portfolio to the solution economy, imagine what might break through and scale.

Eggars’ Solution Economy offers clear hope to everyone and a clear challenge to philanthropy to get with the times. If you’re reading this now, you’ve probably already taken the first step on that journey. Now let’s take a second.