The keynote speaker, Jed Emerson, author of a new book
on Impact Investing, spoke powerfully about how our traditional bifurcation
between for-profit and nonprofit no longer serves us. “If the only tool you use
is grants,” he said, “then the world looks like a charity case.”
His work has focused on finding ways to leverage private capital
to solve public problems. While much of
his talk was aimed at foundations and philanthropists, he beseeched nonprofits
to better understand how capital can be used to accomplish their mission.
If we left the keynote convinced of impact investing, a vigorous
counter was lodged during the first breakout session. Three of the four members
of the panel I attended, Money to Matter: Creating Synergies across For-profit
and Nonprofit Sectors, didn’t think the hybridization and convergence underway in
the sector was a good thing. “The work of nonprofits and for-profits is so
different,” one panelist said, “they don’t go well together.”
Interestingly, a panelist who used to work at Root Capital,
one of
impact investing's success stories Emerson mentioned, said
it only succeeded because of their ability to provide grants, not loans. This reminded me of how it took Muhammad Yunus and GrameenBank 18 years to decrease their reliance on grants and government largess.
The panel’s focus on cross sector partnerships was
fascinating. Namrita Kapur, Director of Strategy for the Environmental Defense
Fund, lamented that one challenge of working with private sector organizations
is that “making the business case is not enough anymore.” She discussed a whole
range of activities that bring positive returns to the corporation but don't automatically prompt
action. Often it was only after a radical advocacy group would raise the
costs of inaction that corporations would agree work with them.
The example shows what can happen when diverse nonprofit and for-profit players work together, intentionally or not. But not all organizations find a niche to help achieve their mission. Sharon Oster, Yale Professor and moderator
of the panel, A Personal Look into Philanthropic Giving, worried about the implications of the “excessive
differentiation” currently happening in the sector.
Many small nonprofits have only a slight difference in how they approach a problem relative to other organizations. Rather than bring their idea to existing organization, the founders launch a new organization. What this means for the future of public problem solving and the
nonprofit sector is an open question. I hope we hear more on this at
next year’s conference.