The concept of "Venture Philanthropy" (VP) is spreading nearly as fast as a computer virus. Experts say VP companies will account for five percent of all grants distributed this year in America, but the unanswered question is: are these companies really doing anything different than what traditional philanthropists have done for decades?
Many VP companies end up appearing more like a club than a group of people working together for the common good, Fortune magazine columnist David Whitford states.
For instance, members of the Seattle-based Social Venture Partners contribute between $5,000 and $10,000 a year for a minimum two years. While their intentions are good, efforts like this barely register compared to the $22 billion in grants handed out annually in this country, Whitford states.
Bruce Sievers is the executive director for the Walter and Elise Haas Fund, which has an endowment close to $250 million. Sievers says that while he wonders how much of the idea of acting as a consultant team to nonprofits is original, he does concede that VP may just be the new generation's way of approaching giving, the columnist reports.
"Each generation looks at this field of social problems in a different way. It's helping encourage people who have some resources to get involved in a way they feel comfortable with," Sievers says.
While venture philanthropy may be new, there is no doubt its concepts are attracting newly-wealthy people who might not have given time or money to social causes under traditional models.
Sievers points out, however, that not all problems can be solved with this business-world approach -- for one, social changes usually take place slowly; and two, sometimes nonprofits simply need cash, not advice.
"Some of these (VP) folks have spent most of their time staring at computer screens. Even in terms of their peers, they are seen as people with narrow frames of reference," Sievers says.
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