Let’s start with the brutal truth. The way we fund social change is horribly broken. Knowingly or not, we have built a dysfunctional structure of restrictive norms, demoralizing messages, limiting beliefs, and unfair regulations that impede the work of those who philanthropy claims to be investing in – our social change leaders. These are the people working on the front lines to bridge our political divides, lessen wealth inequality, create more equitable systems, heal our sick planet.

The dysfunctional structure that I’m referring to includes:

• Legal regulations that limit nonprofit political activity much more than that of business.

• Restrictive norms that say nonprofits should keep their overall costs (and overhead costs especially) much lower than businesses do, while nonprofits should also hold fewer reserves than businesses.

• Demoralizing messages that permeate our society, like “Nonprofits aren’t as financially savvy, competent or worthy of attention as businesses.”

• Structural limits that impose a de-facto ceiling on the level of investment nonprofits receive (in 2019 only 10 nonprofits received gifts of over $100 million, while in the technology space alone, 500 for-profit startups each received $100 million or more).

In order to solve the mess in which we as a human race now find ourselves, we must create a truly valued, effective and abundant social change sector, like this:

  • Eschew scarcity thinking
  • Create equality between funders and social changemakers
  • Employ social change money in much bigger ways

What if philanthropists not only pursued mission-related investing in big ways, but also helped our financial markets (in which, again, philanthropy is deeply embedded) reinvent itself to be more socially directed? For example, there is already a growing movement (interestingly enough among women investors, see here, here and here) for moving financial markets to balance both profit and social good. Who better to help lead a great migration of money from the ivory towers of the privileged few to the starving coffers of social changemakers than the philanthropists who straddle both worlds?

Read the full article about reimagining funding for social change by Nell Edgington at the National Committee for Responsive Philanthropy.