Philanthrocapitalism is a relatively new term, only having entered public consciousness back in 2006. Despite its erroneous association with social philanthropy, it has nonetheless become a byword among organizations, prompting a new wave of growing and established capitalist entities to take part in the noble mission of uplifting mankind’s present state.
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But of course, merging two seemingly divergent entities together isn’t as easy as stitching the two words to form a portmanteau. There are three things that are needed to create and maintain this social investing culture:
1. There must be something that capitalists can invest in. It could be any cause which directly affects society—literacy, arts, etc. This is akin to what ‘for-profit’ entrepreneurs trade in the stock market. Philanthropist Alex von Furstenberg, for example, invests in the environment, education, arts, etc. His money, therefore, is not wasted, but is used to yield a tangible product.
2. Philanthrocapitalism also requires infrastructure, also much like stock markets and investments banks.
3. In this case, philanthropists must begin to act more like investors than philanthropists, making sure appropriate capital commensurate to whatever ‘returns’ they’re projecting. Unlike in other markets, however, these returns come in the forms of social progress on specific advocacy areas.
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Despite all the noble intentions, the philanthropy-capitalism connection is still met with reservations. This is understandable due to huge disparity in capitalism’s self-absorption and philanthropy’s selflessness. However, to fully understand how the whole thing could work, one must be able to accept how their similarities can complement each other. On one hand, capitalism is the best way by which humans can dispense needed goods and services. Philanthropy, on the other hand, is also a system that requires distribution of goods and services—only, it is driven by one’s profound love for humankind in general. As Sean Stannard-Stockton puts it: “To truly benefit from a positive form of philanthrocapitalism, we must be able to gather the accumulated wisdom of each discipline and integrate them into a more complete whole. This is the challenge and opportunity for philanthropy in the 21st century.”
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Alex von Furstenberg is a businessman who is also actively engaged in philanthropic activity. Log on to his official website for more updates.
