A new breed of businessmen and entrepreneurs, looking at how to use philanthropy as a tool for solving global social problems, insist there is no dichotomy between giving grant money to worthy causes and making profitable investments. 

 Proponents of this new philanthropy met in April to exchange views at the 10th Annual Conference of the Global Philanthropy Forum in Redwood City, California [http://philanthropy.com/article/Live-Video-The-Global/127042/].

 Inspired by the examples of Bill and Melinda Gates, Warren Buffett and other billionaire philanthropists, they suggested that investing in socially responsible projects can bring financial reward along with personal satisfaction.  The most outspoken voice was that of investment banker, Kofi Adjepong-Boateng, Vice President of the UK-based Standard Chartered Capital Markets, Africa, a leading international bank for SMEs (Small and Medium Enterprises).

 “It seems to me that the idea that one has to make a choice between putting money into something that is socially useful and making a financial return is a false choice,” he told the Forum. “The companies that succeed in Africa will be those who set out to be the best in their field and that means socially useful, not those thinking only about their financial return and not the communities they are serving.”

 He said investors must always ask the question: will this company still be around in 20-30 years?  “If you’re willing to take the risk of a grant … then you ought to be able to take the risk of a venture capital investment which may also mean you might not get your money back.”

 White House domestic policy advisor, Sonal Shaw agreed, saying that government alone cannot solve social problems. “We must stop thinking that on one side is a grant and the other side is an investment,” she said.  “Some things are going to require grants and you can’t make money off of them but there should also be opportunities to create markets (from a grant). And as a government we have to look at both.” 

 To those listening to the debate, streamed live on the internet, and who might have doubts that business will change its attitude towards grants, Sonal Shaw noted, “We are beginning to see changes in business schools. It’s no longer just ‘how do I make more money?’ but ‘how do I have social impact too?”

 She said that more companies, like Wal-Mart and IBM, are reexamining their philanthropic and business models and asking, ‘how do we link the two’?

 Perhaps the best reason for changing the global business model was given by Adjepong-Boateng.  “If you want to look at what happens when you only focus on financial return, you only have to look at what happened in 2008!”