Inspired by a book I’m currently reading called The Wisdom of Finance, I’ve realized that the strategic philanthropy process and the investment process have quite a lot in common. The parallels between the world of finance and the world of philanthropy are fascinating to me. Perhaps these similarities should be unremarkable to me, as both philanthropy and finance can be seen as disciplines under the umbrella of commerce. Nonetheless, my mind keeps wandering back to the junctures between the two.
It’s as if we, as the Strategic Philanthropy class, are a sort of angel investor or venture capitalist. We painstakingly comb through a seemingly endless list of suitors, searching for the perfect match among countless deserving groups. Like many venture capitalist business models, we’re focused on capitalizing on under-funded ideas by offering advice and funding over an extended time period. We must ensure that the investment makes sense in macro as well as the micro, ensuring that big problems are being tackled by the right people.
There is opportunity for waste, fraud, and disappointment. There is also opportunity to serve as a catalyst for life-improving change. This is only one example among many of the synergies between finance and philanthropy.
by Leland Cook ’19