Philanthropreneur

Philanthropreneurs are interested in effecting positive change in the world and doing so whilst making a profit. Philanthropreneurs are often "driven to do good and have their profit, too", as Stephanie Strom wrote 13 November 2016 in a New York Times article.[5]

As an emerging field, there is no defined operating model or strategic approach. Still, philanthropreneurship marks the transition from a grant and donation model to a profit model with predefined objectives and constant focus on quantifiable results.[6] This form of “commercial giving” demands measurable return, which is why opportunities are assessed and evaluated according to different criteria. Factors such as profitability and quantifiable performance are fixed requirements for granting support. The shift towards more business-minded professional management has also resulted in a greater focus on long-term goals.[6]

The application of entrepreneurial practices in philanthropy drives the impact of connected non-profit organizations through strategic funding. Traditional philanthropy encouraged the promotion of social welfare exclusively through charitable giving.[4] Philanthropreneurship differs from the traditional non-profit organization set up by prioritizing revenue-generating strategies over donations and social impact. In philanthropreneurship, prosperous ventures require the establishment of recurring income as a means of avoiding depletion of funds and ultimately preventing the organization's dissolution.[7]

Philanthropic buying has a limited reach, which is why philanthropreneurs do not dispose of surplus funds, but tailor investments by actively leveraging their class advantages like wealth, time, business expertise, networks, and reputation.[6] Philanthropreneurship is measured in impact, sustainability and scalability.[8]

Philanthropreneurs include Bill and Melinda Gates, Steve Case, Pierre Omidyar and Bill Clinton. Philanthropreneurship is now supported by emerging new business models and legislation including low-profit limited liability companies (L3Cs), created by a tax attorney experienced in entrepreneurial finance named Marc J. Lane.

Non-profit organizations have historically found it challenging to trust and accept the concept of "philanthro-capitalism". Critics note that many metrics of the commercial sectors, such as return on investment lack applicability to non-profit organizations.[6] Moreover, the inclusion of commercial and enterprise strategies has generated concerns in maintaining the institution's culture and ideology. A particular concern is the risk that the organization's focus will shift away from the social mission and instead towards satisfying the need for profit.[9]

The performance assessment of philanthropreneurial ventures remains an area of concern for many, as there is no precise measurement for social impact. For example, in "impact investing", a core practice of philanthropreneurship, project selection for funding is based on estimated social impact and financial return.[10] From an ethical context, many critics argue that the incorporation of a business model commercializes the nonprofit sector and further increases the risk of distorting the organization's mission and principles, alienating the very people it would help.[7]

Conversely, many supporters point out that traditional philanthropy alone cannot sustain social initiatives because of the shortage in sources of funding.[5] In philanthropreneurship, a dependency on traditional fundraising has been a strong predictor of failure, which is why the need to diversify income sources was introduced through the concept of philanthrocapitalism. [11]

• Amr Al-Dabbagh[12]
• Steve Case
• Bill Clinton
• Bill and Melinda Gates Foundation
• Pierre Omidyar

• Social entrepreneurship
• Mutual Aid
• Capitalism
• Social Work
• Impact Investing

• Fortune article examining entrepreneurial practices for non-profits
• Guardian article on philanthropreneurship
• New York Times article examining philanthropreneurs
• Book on business solutions to the world's top social problems
• "Philanthropreneuring for the Rest of Us"