The Growing Social Impact of Philanthropy

The face of philanthropy in the U.S. is changing. During the past decade, the emphasis in charitable giving has been on check writing and traditional philanthropy as a path to growth—how to make projects scale, get bigger and replicate. Today, a more powerful trend is taking shape: making philanthropic investments matter and have influence.

“Ultimately there are other levers besides money to pull—whether it’s policy, political will or knowledge,” says Suzanne Muchin, founder of ROI (Return on Inspiration) LLC. “The means to that end is not money.”

Muchin and Rachel Bellow, a partner in the Chicago-based consulting firm, have spent the past 20 years focused on how to maximize social impact by using markets. ROI consults to high-profile philanthropists and foundations, including Pritzker, Soros and Kellogg Foundation. 

Knowledge Transfer

Bellow observes that philanthropy as a solo instrument is relatively weak in solving social problems today, in part because these have become more global and complex. It is also recognition, she says, of the need to enlist markets and give them a reason to put their weight behind a social purpose venture.

ROI is seeing a new trend where organizations, even successful ones that have seen growth and scale, reach a plateau in their ability to address a particular problem in a meaningful way. “When you recognize in that moment that the path to impact isn’t about growth, then you have to conclude it’s about influence,” Muchin says. “This means you’re trying to achieve your mission by influencing the ecosystem surrounding the social impact issue.”

According to Bellow, this requires an organization to codify the knowledge around what it has figured out so that it is transferable to other players, not to be replicated but to be applied. That transfer is a key part of an influence strategy.

“We call it knowledge transfer when the information is packaged in such a way that when it arrives on the doorstep of the recipient, they not only understand it, but are equipped to act on it,” Muchin says.

Strategic Giving—It’s Not Simply Money

In the women’s view, Mark Zuckerberg’s recent, highly publicized $100 million donation to the Newark public school system failed to do these things.

“We see no engagement of markets or what Zuckerberg knows as an entrepreneur—social networking, markets, market growth, market traction, engaging of the next generation," says Muchin. "There’s nothing here that’s other than money and traditional checkbook philanthropy.”