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"Unit 2: Wikipedia Article [OUTLINE]"

Title: Philanthropreneurship [Rather than current title - Philanthropreneur]

Background

• Define the term and explain it's origin.
• Provide characteristics of philanthropreneurship, and how it has evolved from traditional philanthropy.

Role of Philanthropist

• Explain the difference between the role of Philanthropreneurs and their charitable predecessors.

Entrepreneurial Facet

• Explain how entrepreneurship is incorporating into philanthropic ventures. (*emphasis on strategy and financing)
• Explain legal entity structure.
• Provide critics opinion of incorporating entrepreneurial

21st century efforts

• This last section will serve as a wrap by further expanding on the previous sections (i.e. Role of Philanthropreneur & Entrepreneurial Facet)
• Provide examples of successful efforts of philanthroprenuerial ventures, such as Playpumps International.
• Expand on the founder's role, strategy, and financing.

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Background -Philanthropreneurship is defined as the application of entrepreneurial practices in philanthropy. This innovative market-approach to philanthropy emerged in the late 20th century, described originally as “entrepreneurial philanthropy”, a term that has evolved into “Philanthropreneurship”. The main objective of this emerging field is to pursue social change that is both scalable and sustainable. It is often considered the start of a new era in philanthropy; one characterized by the development of the philanthropist’s role and the integration of business practices.

Theoretical Framework -Philanthropic ventures encouraged the promotion of social welfare exclusively through charitable giving. However the idea of philanthropic buying has a limited reach. Many well-intentioned projects fall through because of their disregard to set up revenue generating strategies. In philanthropreneurship prosperous ventures require the establishment of recurring income as means of avoiding depletion of funds and ultimately preventing the social movement’s dissolution. From which derives the idea that the same skills used to generate excess-profits in business are needed to tackle world problems is central in philanthropreneurship. The fundamental constraint in traditional philanthropy has progressed into the emergence of philanthropreneurs, who are active donors whose role surpasses that of check writers. A philanthropreneur’s contribution is meant to go beyond providing temporary “band-aid” solutions. Instead of directing efforts on the purchase of medicine for the sick and the supply of food for the hungry, philanthropreneurs seek to eradicate the problem.

Controversy -Philanthropreneurs omit the paradox of profits and social benefits, which represents the general differentiation between the corporate and non-profit sectors. Non-profit organizations have historically found it challenging to trust and accept the concept of “philanthro-capitalism”. However entrepreneurial-thinking is needed to execute and design models that both target the root cause and ultimately creates economic value. The performance assessment of philanthropreneurial-ventures is an area of concern for many as there is no precise measurement for social impact. For example in “impact investing”, a core practice of philanthropreneurship, project selection for funding is based on estimated social impact and financial return. From an ethical context many critics argue that the incorporation of a business model commercializes the nonprofit sector and further increases the risk of distorting the organization’s mission and principles. On the other hand many supporters point out that traditional philanthropy alone cannot sustain social initiatives because of the shortage in sources of funding. In philanthropreneurship a dependency in traditional fundraising is a strong predictor of failure, which is why historically the implementation of business practices enables philanthropreneurship to outperform age-old practices of philanthropy.

21ST Century Efforts -Pierre Omidyar, chairman of eBay, who back in 2004 started Omidyar Network because of his dissatisfaction with the level of impact his donations had through conventional charities. Omidyar is an exemplar of how today’s philanthropists have taken on a greater role than their charitable predecessors. Apart from bringing their checkbook, affluent philanthropists are expected to bring in their entrepreneurial know-how. - Playpumps International is a nongovernmental organization (NGO) founded by Trevor Field. The organization’s mission is to promote public health in South Africa by providing easy access to clean, potable water in rural communities. Field developed the Field sought to design a self-sustainable system that enabled water to be pumped into a storage tower. This new model resulted in a mechanical water extraction process designed after a playground merry-go-round, which is attached to a water pump. Rotational energy generated by children playing is then be used to fill the water storage tower. The Playpump water system enhances living conditions and offer playing equipment for the young population. Since its invention, hundreds of water pump systems have been installed particularly through the aid of monetary donations and governmental approvals. Before Playpumps attained global recognition the organization had to be self-financed in order to ensure its continuity. Because of the infrequent number of charitable donations received and lack of fundraising sources, Trevor Field was driven to generate an alternative flow of income when he began scaling Roundabout Water. The purpose of this new component is monetary gain that will ensure the financial support required to maintain the system. In Field’s case marketing contracts were used to generate income. Four paneled billboards concealed the Playpump water storage towers and were used to display printed ads. The purpose of generating revenue was to recapitalize on the cost of the equipment (i.e. manufacturing and installation costs). With time, monetary donations increased significantly, and thus allowed for half of each tower’s panels to be dedicated on promoting social messages, specifically HIV and AIDS awareness. Today the Playpump-initiative is made up of two for-profit entities and one nonprofit. Playpump International is a nonprofit in the U.S. that is partnered with Roundabout Water Solutions, a manufacturing company in South Africa.

See Also

-Philanthropy -Entrepreneurship -Social entrepreneurship

References