Giving Compass' Take:

· There is a big difference between investing for impact and investing for return. On one hand, there are impact-driven altruists looking to have a positive effect on society without a concern for financial return, then there are those who invest to gain on the monetary side with little regard as to how they impact society.

· The differences in funding types is noticeable, but all types are necessary. What role do these different funders play in creating a social change?

· Learn more about effective altruism and the impacts it has.


One often hears the question (and you’ve probably asked this yourself): “What is the role of private enterprise in addressing social problems?” The general belief is that the moment you allow return-seeking capital, you are opening the door for exploitation. After all, how can you profit from the poor?

These may be fair concerns, but for-profit, impact-seeking private enterprise has a role to play in development; and this article is an attempt to articulate why.

The development problems we face are large and complex. Income inequity, poor health outcomes, low rates of educational achievement, low farm productivity—everywhere you turn, you see these issues staring you in the face. Some of these are hundreds of years old, deeply intertwined with other issues, and seemingly intractable.

To address these problems at scale, what can we do to increase the flow of money, talent and partnership, support to develop, deploy and scale innovative solutions for our most pressing problems?

I like to think of these in terms of the ‘Bell Curve of Altruism.’ If there was an index of altruism, I believe that funders—both individual as well as institutional–would generally be distributed normally along that index.

While a few partners will enthusiastically support your cause, with little expectation of a return, true scale will only come from partners who will charge for services rendered.

I believe that we need to recognise that not everyone is an Amazing Altruist. If we have to expand the pool of funders, people and partners who can help us in our journey of addressing social problems at scale, we need to leverage structures that give them more than just social impact.

Of course, some checks and balances are required to ensure that we guard against mission drift, but with those protections in place, I do think we can leverage the benefits that are on offer.

Read the full article about altruists and return-seeking investors by PR Ganapathy at India Development Review (IDR).