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A Look Back at the Rise of Venture Philanthropy

February 22, 2011

This 2006 Economist article about the rise of social investing, philanthrocapitalism, and venture philanthropy among the ultra-rich is worth another look (especially since it came out before SAPP was even founded!).  As some of you have read here, I am a bit of a skeptic when it comes to business approaches to philanthropy, but the article was interesting nonetheless in order to see how wealthy industrialists and inventors around the world are applying their sense of innovation to the philanthropic sector.  And as a bonus, the article features two Indians too:

“Relative to the corporate environment, we are in the 1870s. But philanthropy will increasingly come to resemble the capitalist economy,” predicts Uday Khemka, a young Indian philanthropist and a director of the SUN Group investment company owned by his family…

Over the past year or so, many of the super-rich have started to ask themselves what exactly their assets are doing, says D.K. Matai, an Indian-born software entrepreneur who runs the Philanthropia Trinity, another international network of philanthropists. “What is the point of earning a high return in China if my money is helping to build Dickensian working conditions? If I have $5 billion, and am giving $4 billion away, do I really want a 17% return on activities that are wrecking the world?” To deal with that problem, the investment industry will need to improve on the strategies and products it currently offers for “ethical” or “socially responsible” investment, which often amount to little more than avoiding shares in, say, tobacco, arms manufacturing or oil.

The trend has obviously taken off since 2006 – what do you all think about “philanthrocapitalism”?  Is it the best approach? Also, I can’t find much on the “Philanthropia Trinity” mentioned above – do any of you have any info?  Is it still an active network?


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