{"id":14794,"date":"2014-09-16T05:00:02","date_gmt":"2014-09-16T11:00:02","guid":{"rendered":"https:\/\/tested-neuron.flywheelsites.com\/?p=14794"},"modified":"2015-02-17T13:20:35","modified_gmt":"2015-02-17T20:20:35","slug":"philanthropy-form-of-investment","status":"publish","type":"post","link":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/","title":{"rendered":"Philanthropy is Another Form of Investment"},"content":{"rendered":"

Most people follow a century-old paradigm of philanthropy<\/strong>, popularized by Andrew Carnegie back at the turn of the 20th Century. Simply put, maximize the return of investments, and give a portion of those earning to charity.<\/p>\n

In Carnegie\u2019s case, those investments provided him so much wealth, that despite giving away an equivalent of $5 billion in his two decades as philanthropist, enough of his wealth remained that 100 years later two foundations, the Carnegie Corporation of New York and Carnegie UK Trust are still up and running, with more than $1 billion in endowments.<\/p>\n

Hundreds of other wealthy entrepreneurs have since followed this same model, with Bill Gates and Warren Buffet being the two biggest philanthropists this decade, promising to give away most of their combined $100+ billion in wealth. The question I and others have starting asking is whether there is another way. Whether it is possible to combined the social good of philanthropy within the act of doing business? And specifically for investors, a question of whether it is possible to do good, while providing a reasonable return on investment.<\/p>\n

To answer this question, we need to understand how investing and philanthropy are related. To do this, let\u2019s create a \u201cmagic square\u201d, placing investing in one corner, and philanthropy in the other.
\n\"\"<\/a>
\nTo connect these concepts we need two common measures. On the vertical axis, we have \u201creturn on investment\u201d. For traditional investing, the goal is to maximize the return. For philanthropy, the expectation is that there will be no return (beyond the proverbial PBS tote bag). On the horizontal axis, we have \u201cimpact\u201d, as in a positive, measurable, social or environmental impact. The point of philanthropy is to have an impact, and thus the high impact is on the right, whereas traditional investing does not include a measure of impact.<\/p>\n

The result is a landscape that explains the differences between the goals of investing and philanthropy, but which still contains a large gap between the two. However, with this landscape, understanding that each axis is a continuum of values, a new important question arises\u2026 what does it mean to be a point within all the empty space between the two labeled corners?
\n\"\"<\/a>
\nLet\u2019s look at three investments that fit into that space: Whole Foods, Ben & Jerry\u2019s, and Zipcar. All three are mission-driven companies, aiming for a positive impact as well as profits, hence they fall on the right side of the landscape. All three were good investments for their initial shareholders, with Whole Foods having a successful IPO, Ben & Jerry\u2019s being acquired by Unilever, and Zipcar acquired by Avis. Hence they are at or near the top of the landscape.<\/p>\n

We can quibble over where specifically these companies should be plotted on the landscape, but given their missions, they certainly deserve to be placed somewhere different than Exxon, Philip Morris, Kraft, Pfizer, Apple, or Google, whose missions are maximizing shareholder value, no differently than Carnegie\u2019s U.S. Steel or Rockefeller\u2019s Standard Oil or Gates\u2019 Microsoft.<\/p>\n

More importantly, with these three small examples, we can realize that there are a whole host of valid options for investments within the landscape between traditional investing and philanthropy. This is an area that is being called \u201cimpact investing.\u201d<\/p>\n

There are a whole host of valid options for investments within the landscape between traditional investing and philanthropy. This is an area that is being called \u201cimpact investing.”<\/p><\/blockquote>\n

As the landscape shows, impact investing covers a broad swath of potential investments. It includes socially responsible investing (SRI), divesting your portfolio of tobacco, oil, and other such \u201charmful\u201d stocks. At the other end of the landscape it includes microlending sites like Kiva.org, where you can lend an entrepreneur $25 or more with no interest, but with your the return of your original capital. And in-between, it includes the top-left quadrant of profit-driven companies that aim to do some good in the world; the bottom-right quadrant of mission-driven companies that aim to run via customer revenues, not philanthropy; and the top-right quadrant which achieve the best of both worlds, doing good in the world while returning a market-rate return.<\/p>\n

With this new paradigm of all money having an impact, imagine how much more \u201cgood\u201d could be done.<\/i> Tweet This Quote<\/a><\/span><\/p><\/blockquote>\n

With this landscape, and the investment options therein, new strategies emerge that make no sense when investing and philanthropy are two separate activities. For example, in foundations, where 90% of the funding sits in the safety of S&P 500, Treasuries, etc., 5% is invested speculatively, and only 5% given away to fulfill the mission of the organization, impact investing can be used to empower all 100% of the dollars toward impact. For high-net-worth individuals, the same is true for their \u201cnest egg\u201d, today locked away in mutual funds, hedge funds and a mix of bonds that together aim to \u201cbeat the market\u201d, so that the nest egg grows while perhaps 10% of those gains are given away to charity. Instead, all 100% could be focused on impact, mixing SRI for the core investments, with sustainable forestry, green building, community trusts, and other impactful investments mixed in.<\/p>\n

With this new paradigm of all money having an impact, imagine how much more \u201cgood\u201d could be done.<\/p>\n

\u201cConscious\u201d businesses, doing good while doing business, side-by-side with philanthropic organizations, doing good where there is no business to be had.<\/p>\n","protected":false},"excerpt":{"rendered":"

A new strategy emerges that makes bisecting of investing and philanthropy into two separate activities illogical according to veteran entrepreneur of five startups.<\/p>\n","protected":false},"author":124,"featured_media":14799,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[476,403,1559],"tags":[2247,1397,1061,462,210,290,1413,17,677,968,383],"class_list":["post-14794","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-article","category-invest","category-philanthropy","tag-article","tag-bfp","tag-guest-post-2","tag-impact","tag-investment","tag-leadership","tag-libes","tag-money","tag-opin","tag-philanthropy","tag-starting"],"acf":[],"yoast_head":"\nPhilanthropy is Another Form of Investment - UNREASONABLE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Philanthropy is Another Form of Investment - UNREASONABLE\" \/>\n<meta property=\"og:description\" content=\"A new strategy emerges that makes bisecting of investing and philanthropy into two separate activities illogical according to veteran entrepreneur of five startups.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/\" \/>\n<meta property=\"og:site_name\" content=\"Unreasonable\" \/>\n<meta property=\"article:published_time\" content=\"2014-09-16T11:00:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2015-02-17T20:20:35+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"450\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Michael Luni Libes\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@https:\/\/twitter.com\/lunarmobiscuit\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Michael Luni Libes\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":[\"Article\",\"BlogPosting\"],\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/\"},\"author\":{\"name\":\"Michael Luni Libes\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/379e4e34956412f8f5654b471d4e53d8\"},\"headline\":\"Philanthropy is Another Form of Investment\",\"datePublished\":\"2014-09-16T11:00:02+00:00\",\"dateModified\":\"2015-02-17T20:20:35+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/\"},\"wordCount\":896,\"commentCount\":57,\"image\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg\",\"keywords\":[\"Article\",\"BFP\",\"guest post\",\"impact\",\"Investment\",\"Leadership\",\"Michael Libes\",\"money\",\"opinion\",\"Philanthropy\",\"Starting Up\"],\"articleSection\":[\"Article\",\"Investment\",\"Philanthropy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/\",\"url\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/\",\"name\":\"Philanthropy is Another Form of Investment - UNREASONABLE\",\"isPartOf\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg\",\"datePublished\":\"2014-09-16T11:00:02+00:00\",\"dateModified\":\"2015-02-17T20:20:35+00:00\",\"author\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/379e4e34956412f8f5654b471d4e53d8\"},\"breadcrumb\":{\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#primaryimage\",\"url\":\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg\",\"contentUrl\":\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg\",\"width\":1200,\"height\":450,\"caption\":\"Photo from Creative Commons\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/unreasonablegroup.com\/articles\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Philanthropy is Another Form of Investment\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#website\",\"url\":\"https:\/\/unreasonablegroup.com\/articles\/\",\"name\":\"Unreasonable\",\"description\":\"We believe in the power of business to drive lasting, scalable change.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/unreasonablegroup.com\/articles\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/379e4e34956412f8f5654b471d4e53d8\",\"name\":\"Michael Luni Libes\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/bba22bab01751344e73c16092671291930bfc8e65472f35c6198680f2e1d4288?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/bba22bab01751344e73c16092671291930bfc8e65472f35c6198680f2e1d4288?s=96&d=mm&r=g\",\"caption\":\"Michael Luni Libes\"},\"description\":\"Luni is a 25+ year serial entrepreneur, (co)founder of six companies. His latest startups are Fledge, the conscious company accelerator, where he helps new entrepreneurs from around the world navigate the complexities between idea and customer revenues, and investorflow.org, an online service connecting impact investors. In addition, Luni is Entrepreneur in Residence and Entrepreneurship Instructor at Presidio Graduate School and an Entrepreneur in Residence Emeritus at the University of Washington\u2019s CoMotion, the center for innovation and impact. Luni is author of The Next Step series of books, guiding entrepreneurs from idea to startup and The Pinchot Impact Index, a way to measure, compare, and aggregate impact.\",\"sameAs\":[\"http:\/\/fledge.co\/\",\"http:\/\/www.linkedin.com\/in\/lunarmobiscuit\",\"https:\/\/x.com\/https:\/\/twitter.com\/lunarmobiscuit\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Philanthropy is Another Form of Investment - UNREASONABLE","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/","og_locale":"en_US","og_type":"article","og_title":"Philanthropy is Another Form of Investment - UNREASONABLE","og_description":"A new strategy emerges that makes bisecting of investing and philanthropy into two separate activities illogical according to veteran entrepreneur of five startups.","og_url":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/","og_site_name":"Unreasonable","article_published_time":"2014-09-16T11:00:02+00:00","article_modified_time":"2015-02-17T20:20:35+00:00","og_image":[{"width":1200,"height":450,"url":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg","type":"image\/jpeg"}],"author":"Michael Luni Libes","twitter_card":"summary_large_image","twitter_creator":"@https:\/\/twitter.com\/lunarmobiscuit","twitter_misc":{"Written by":"Michael Luni Libes","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":["Article","BlogPosting"],"@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#article","isPartOf":{"@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/"},"author":{"name":"Michael Luni Libes","@id":"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/379e4e34956412f8f5654b471d4e53d8"},"headline":"Philanthropy is Another Form of Investment","datePublished":"2014-09-16T11:00:02+00:00","dateModified":"2015-02-17T20:20:35+00:00","mainEntityOfPage":{"@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/"},"wordCount":896,"commentCount":57,"image":{"@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#primaryimage"},"thumbnailUrl":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg","keywords":["Article","BFP","guest post","impact","Investment","Leadership","Michael Libes","money","opinion","Philanthropy","Starting Up"],"articleSection":["Article","Investment","Philanthropy"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/","url":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/","name":"Philanthropy is Another Form of Investment - UNREASONABLE","isPartOf":{"@id":"https:\/\/unreasonablegroup.com\/articles\/#website"},"primaryImageOfPage":{"@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#primaryimage"},"image":{"@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#primaryimage"},"thumbnailUrl":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg","datePublished":"2014-09-16T11:00:02+00:00","dateModified":"2015-02-17T20:20:35+00:00","author":{"@id":"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/379e4e34956412f8f5654b471d4e53d8"},"breadcrumb":{"@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#primaryimage","url":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg","contentUrl":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg","width":1200,"height":450,"caption":"Photo from Creative Commons"},{"@type":"BreadcrumbList","@id":"https:\/\/unreasonablegroup.com\/articles\/philanthropy-form-of-investment\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/unreasonablegroup.com\/articles\/"},{"@type":"ListItem","position":2,"name":"Philanthropy is Another Form of Investment"}]},{"@type":"WebSite","@id":"https:\/\/unreasonablegroup.com\/articles\/#website","url":"https:\/\/unreasonablegroup.com\/articles\/","name":"Unreasonable","description":"We believe in the power of business to drive lasting, scalable change.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/unreasonablegroup.com\/articles\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/379e4e34956412f8f5654b471d4e53d8","name":"Michael Luni Libes","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/unreasonablegroup.com\/articles\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/bba22bab01751344e73c16092671291930bfc8e65472f35c6198680f2e1d4288?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/bba22bab01751344e73c16092671291930bfc8e65472f35c6198680f2e1d4288?s=96&d=mm&r=g","caption":"Michael Luni Libes"},"description":"Luni is a 25+ year serial entrepreneur, (co)founder of six companies. His latest startups are Fledge, the conscious company accelerator, where he helps new entrepreneurs from around the world navigate the complexities between idea and customer revenues, and investorflow.org, an online service connecting impact investors. In addition, Luni is Entrepreneur in Residence and Entrepreneurship Instructor at Presidio Graduate School and an Entrepreneur in Residence Emeritus at the University of Washington\u2019s CoMotion, the center for innovation and impact. Luni is author of The Next Step series of books, guiding entrepreneurs from idea to startup and The Pinchot Impact Index, a way to measure, compare, and aggregate impact.","sameAs":["http:\/\/fledge.co\/","http:\/\/www.linkedin.com\/in\/lunarmobiscuit","https:\/\/x.com\/https:\/\/twitter.com\/lunarmobiscuit"]}]}},"jetpack_featured_media_url":"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/09\/cg2.jpg","_links":{"self":[{"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/posts\/14794","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/users\/124"}],"replies":[{"embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/comments?post=14794"}],"version-history":[{"count":14,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/posts\/14794\/revisions"}],"predecessor-version":[{"id":14835,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/posts\/14794\/revisions\/14835"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/media\/14799"}],"wp:attachment":[{"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/media?parent=14794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/categories?post=14794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unreasonablegroup.com\/articles\/wp-json\/wp\/v2\/tags?post=14794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}