Microphilathropy is an approach to philanthropy based on smaller, more direct interaction between those who are in need and those who can give. Platforms such as Kiva, DonorsChoose and Facebook Causes have the ability to aggregate thousands of relatively small donations to make a big difference.
I had the honour of presenting at Social Venture Partners Toronto's panel discussion on, "How Microphilanthropy Is Changing Giving".
Where should non-profits and social enterprises begin when considering their financial options?
First stop is right at home: Is this the right time in the organization’s evolution to be making these considerations at all? It’s worth setting a filter to screen timing on making these considerations at all, and avoid wasting valuable time/energy/resources spinning wheels down the road.
Here are a few suggestions for filter questions: Who is making these considerations? Are they the right person/group to champion this assessment, and do they have the resources to do it properly? Do they have a keen understanding of the organization’s mission, direction & ground level operations? What is the organization’s fitness level in terms of taking on a big new challenge that will affect mission, direction & operations in often unforeseen ways?
Let's examine the spectrum of organizations in a little more detail:
For me, social finance means investment capital for a worthy cause- that will improve the lives of those who need help, and ultimately benefit the communities these folks live in. Unlike private capital, social finance is not an end in and of itself but a means to achieving a social goal.
Social finance is a concept that gets little attention from policy-makers in Canada and this has, in my opinion, stunted its growth and potential. More on this below. So what are the current and most common practices?
There is an increasing need for the non-profit sector in Canada to seek new innovative ways of accessing capital to meet their goals. But before we go in-depth on the emerging world of social finance, it’s important to explore the different types of financing that exist for an organization.
Financing is the money acquired to run an organization and achieve its mission. All types of organizations must make decisions around financing with respect to their business objectives, ability to secure alternative investment, risk tolerance, and other related factors. Although, financing options vary based on the organization’s legal structure there are typically three types of financing options available to non-profits or social enterprises: Grant Funding, Debt, and Equity.
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Michael Lewkowitz on A Community Enterprise Corp for Ontario? A Response
Mar 09, 2010