Up until the closing decade of the twentieth century, the concepts of philanthropy and entrepreneurship were worlds apart. Philanthropy either private or corporate was perceived as a way of giving back to society. In the corporate world, corporate social responsibility advocated a triple bottom line accounting to track an organization’s contribution to society in recognition of the role the broader community played in supporting the corporation.
Entrepreneurship, by comparison, was seen almost exclusively as a for-profit making concept with the entrepreneurial organization usually being dominated by an individual. In many cases, the media happily portrayed entrepreneurs as amoral, profit-motivated individuals driven only by dreams of acquiring wealth together with the power to retain it.
A Conversion of Practice
Most beneficiaries of traditional philanthropy were non-profit organizations. It was widely believed that philanthropic behaviors sat most comfortably with the non-profit sector regardless, of the origins of the wealth the funded that philanthropy. In the last two decades, however, this comfortable relationship between philanthropy and the non-profit sector has frayed, as new forms of philanthropy emerged.
This new wave of “venture philanthropy had its beginnings in a renewed social consciousness that took individual initiative and matched it with the power of the Internet and networking connectivity of social media. A new entrepreneurial spirit gradually took shape, dedicated to achieving tangible social impacts by borrowing their innovation skills and practices from venture capital practitioners.
At the core of this concept is the recognition of how “disruptive” technology could replace moribund organizational forms with new ways to image the social enterprise and connect it to its constituency.
Enter the Venture Philanthropist
The emergence of venture philanthropists has occurred in a context where the complementary concepts of social enterprise, social entrepreneur and social entrepreneurship are enjoying fast growing interest across the globe.
Social enterprises have long existed; delivering innovative and much-needed solutions for providing services or goods to communities whose needs were not being met by either government instrumentalities or the private sector.
Venture Philanthropy And Social Entrepreneurship In A Volatile World
The rise of both venture philanthropy and social entrepreneurship is taking place against a backdrop of public sector authorities struggling to deliver an appropriate level of services and support to in-need social groups, be it through direct public service provision or through established non-profit organizations.
In Western economies, increasing public debt, low economic growth and the impact of austerity has posed largely unanswered questions for the traditional welfare state. Combined with the crisis of authority as community belief in many of these public institutions, has been eroded by the combination of budget cuts and inefficient management practices the way has been paved for private initiatives with demonstrable social aims to promote their agenda of reimaging a new social philanthropy.
As many countries in the Western world look for alternatives to an atrophied public service delivery system, the combination of venture philanthropy and social entrepreneurship offers a new model that goes beyond the old divisions of philanthropy and entrepreneurship, instead harnessing aspect of the two to create service delivery entities that are low cost, transparent, highly skilled and able to operate at both the macro and the micro level depending on the issue under consideration.