Social entrepreneurs: the next generation of philanthropy?

The word “philanthropy” translates literally to love of humans or love of mankind, but we typically define philanthropy as giving money, providing in-kind goods and services, and volunteering time to charitable causes and nonprofit organizations. Traditionally, charities are held responsible for affecting positive change and meeting needs that government and private enterprise have inadequately served.   

According to a recent article in The Tennessean by Jeff Cornwall,the Millennial Generation (that’s me!) is expanding beyond this common definition by harnessing the power of free market capitalism to benefit relevant social causes. “Social entrepreneurs,” seek to create sustainable, profitable business that are independent from reliance on benefactors but still bring about positive results in the community.

Cornwall cites this generation’s lack of trust in government to solve social problems as one of the main motivators for this new movement:

“Several surveys have found that many people in this generation don’t believe that government is the most effective means to solve many of today’s social problems — the private sector offers more efficient and effective solutions. They no longer believe that massive programs work. Instead, they hope to create solutions that solve one small problem at a time.”

So, what does this new trend mean for traditional nonprofits and charity organizations? As a millennial myself, I can vouch for the lure of the efficiency and efficacy of companies driven by profit-demanding management. However, I also doubt that public trust in the socially-responsible business management of corporations, eroded by recent scandals (ahem, Enron), will be completely restored anytime soon.

In the end, our perceptions of organization value have a lot to do with marketing, communication, and an attention to public-organization relationships; certainly some for-profits give me the warm fuzzies much more than steely and holier-than-thou charity organizations. I admit it’s mostly in the messaging I receive and my personal experiences interacting with the organizations. For-profit companies succeeding with a social mission likely make that social priority clear to consumers and other stakeholders. More importantly, they make that priority clear to others who care as well.

Which is not to say it’s all a marketing ploy. Instead, I see it as the best of both worlds: creating sustainable, profitable businesses driven by philanthropic (and phyto-thropic?) principles for the benefit of the whole community. Nonprofits can learn from this strategy by likewise engaging donors not with a “what you can do for us” message but instead “here’s what we can do for you.” Of course, donors need to be assured that their money is going to a good cause. For some, that’s all they need to know. But many of us, millennials especially, want to have our cake and eat it too. Does it make us greedy or selfish? Perhaps, but I suspect many of us simply want to erase the delineation between socially-beneficial charity and profitable business.

Nonprofits today can take advantage of this trend by exploring ways they can mimic capitalist business strategies while maintaining a mission for social good. In my research for my honors thesis, I’m finding that in the right context, fund-raising events can provide a great opportunity for nonprofits to offer donors unique benefits in exchange for their dollars and time. Capitalist? Maybe a little. Philanthropic? Yes. In every sense of the word.

Thanks to Sam Davidson, in his post “Millenials and Social Enterprise” for directing me to the article.

Image courtesy of http://www.oph.gov.au/images/upload/soup-kitchen.jpg

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1 Response so far »

  1. 1

    Sam Davidson said,

    Great thoughts here. I think the most interesting thing to watch will be if nonprofits can integrate appropriate revenue models. It’s better for them organizationally, and it can even help them better address needs. But to do that, they’ve got to get creative, and help change attitudes. Here’s to hoping.

    Your blog looks very interesting, by the way. I’ll subscribe.


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