Giving Compass' Take:

• Kris Putnam-Walkerly explains how philanthropy can bolster social enterprise as an investment tool uniquely situated to take risks for social returns. 

• How can funders work to form partnerships with social enterprises to achieve greater impact? Which local organizations in your community are in a good position for this sort of partnership? 

• Learn how social enterprises can attract growth-stage capital. 

For most people, philanthropy is the money we give away when we’re finished investing and earning in other areas. It’s a separate category — not just on our tax returns or financial planning documents, but also in our heads. The idea that one makes money first, then gives it away is about as American as apple pie.

But smart investors realize that philanthropy is much more than charity. Philanthropy is an investment tool that can transform outcomes for ourselves and for the world.

Here’s an example: Suppose you have a passion for food and nutrition, and you want to see a world in which everyone understood and ate in a healthier, more sustainable way. You open a farm-to-table restaurant that grows into a regional chain. Your investment in this business pays off handsomely, and you look forward to continued growth. To do that, you’ll need to ensure a steady source of farm-fresh ingredients for all your restaurants. At the same time, you want to carry the message of healthy, sustainable food beyond your company walls. So you begin to make philanthropic investments in nonprofit organizations that help new and existing small farmers understand and deploy sustainable practices. Or perhaps you invest in nonprofit co-ops that help the farmers you depend on strengthen their own businesses while expanding knowledge about healthy, sustainable food far beyond your restaurant. And as an added bonus, that new knowledge results in more customers for your business.

Read the full article about philanthropy and social enterprise by Kris Putnam-Walkerly at Putnam Consulting Group.