Is Chan-Zuckerberg the End of Philanthropy?
Despite the rather bleak news this week, I have found hope and positivity through questions I've recieved about the Chan-Zuckerberg initiative, and what it really means for the philanthropic industry. There are many reasons that they chose this model, most related to long-term decision making power, although NPR reports that as an LLC, the initiative would be able to lobby in a way foundations can’t. The Wall Street Journal suggested that this may be the end of philanthropy as we know it which seems either a bit extremist, or reflects a lack understanding of the nuances between social innovation, social responsibility and pure philanthropy.
Personally, I think this arrangement is brilliant and reflects the new way of thinking about how businesses and philanthropic endeavors intersect. It reflects the outmoded way of business thinking that focus on profitability as the only beneficial impact of business. In fact, Forbes Magazine and Jamie Gutfreund at Intelligence Group surveyed nearly half of the millennial workforce and an astounding 64% of millenials said it’s a priority for them to make the world a better place.
In some ways, the Chan-Zuckerberg Initiative aligns closely with the concept of Shared Value that I was certified in earlier this year. Shared Value states that businesses can build profitability by solving compelling social issues in three ways: through innovation, redefining the value exchanged during business transactions and creating collaborative clusters that enhance communities and business operations. The notion is exciting because if we are able to harness the power of business, we'll be able to solve social issues at scale and more effectively than ever before.
So how do we categorize this new approach to changing the world: is it Shared Value, Social Innovation or true philanthropy? I think it’s too early to put a label on it, but there are some signals we might use to determine in the long run.
Shared Value would be the driving principle if the Chan-Zuckerberg initiative's goal is to make money by solving compelling social issues (while building profitability that allows them to reinvest). If we find early on that the initiative continues to earn revenue by investing in socially innovative businesses, then it could be in some way viewed as Shared Value.
Alternatively, if we find that the initiative works to solve social issues without the requirement of a return on investment, it could be considered true philanthropy.
(For the record, if they had built this initiative as a foundation that aligned with social issues related to the Facebook business (Privacy/ Net Neutrality/ Mental Health or any other issues that might mitigate organizational risk, I'd likely categorize this initiative as Corporate Social Responsibility.)
Americans contributed $358 Billion dollars to philanthropic endeavors in 2014, so I don’t believe this initiative alone is going to change the philanthropic sector. The general public aren’t spending enough time and money on philanthropy to warrant the creation of separate businesses entities, and of course many foundations are held as part of an endowment of a large, publicly held entity (Lilly Foundation for example), for whom such a change would not make sense.
If anything, this move creates a wider lens through which we can view philanthropy, new channels for solving social issues, a heightened call to action for our businesses and a way to ask questions in a way we haven’t before.
So welcome, Maxima Chan Zuckerberg. A new world awaits.