Coming to terms
There are some cynics who suggest that philanthropists cannot
use the market to correct ills that the market itself has
exacerbated. In some respect, however, that is naiveté disguised as
The fact is that whatever the personal terms of engagement of
individual philanthropists, who may be giving freely of their time
and money, the beneficiaries of their activities deserve the best
that efficient organisation can offer. That means engaging with
outside suppliers of services on the one hand and deploying
internal resources as effectively as possible on the other.
While foundations will often recognise that responsibility towards
those they want to help in the way they organise their interaction
with them, there has traditionally been less discussion about the
role of managing the funds that provide the means to conduct the
mission of the organisation.
In the past few years, the need to focus on this aspect of the
philanthropic chain has become pressing. With spending commitments,
future targets and - often - unlimited time scales all to be
considered, earning a sufficient return is far from a given.
In getting to grips with the challenge of investment, there are
certainly debates to be had. Should mission dictate assets or
should those two aspects of a foundation's activity be decoupled?
Are lower returns an acceptable price to pay for excluding certain
types of assets from a portfolio. These are legitimate concerns;
they need to be discussed openly and with seriousness. That doesn't
mean learning to love the financial markets; but it does mean
learning to work with them.
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