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Are nonprofit groups dead?

No. But they need to get off the 'philanthropic dole' and make other changes, a panel of experts suggest.

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No profit motive means no investment, and no investment means no money to save or change lives.

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One Aspen leader from the US put it this way: Some nonprofits, he said, are stuck on “the philanthropy dole.”

But, as one Aspen leadership fellow from Latin America observed, “There’s been literally trillions and trillions of dollars given through nonprofits, with limited results.” As a businessman turning toward social change ventures, that nonprofit model baffles him.

“If you give me money, I produce results,” he said of his primary field. “If I don’t produce results, I don’t get more money.”

Enter the world of social-impact investing, or socially responsible investing. In this world, investors are willing to trade some – or perhaps all – of their possible return on investment (ROI) for achieving some social change, or “social return.”

But that begs another question:

What’s the ideal 'Return on Investment' on charity?

And how do you measure it? Donors have become increasingly demanding of data to help evaluate how well donor dollars are being used. As one guy in the trenches observed, “Anecdotes are not going to cut it anymore.”

At the same time, not every change can be turned into a number, much less a return on investment. One woman who runs a nonprofit abroad asked, “How do we get measure right? Our ‘profit’ is, we’re changing lives somehow.”

Making that change happen, she insists, requires that “the helper” – donor or investor – “needs to listen to the doer.”

Is “social entrepreneurship” the best way to create social change?

True, not all social entrepreneurs are businesspeople trying to make money with ethically responsible or socially targeted investments. Sometimes, “social entreprenuer” describes a person with a creative or unusual vision for solving long-standing social problems.

But whatever the context, the word also implies something else. “It has a capitalistic individuation,” said one Aspen leader.
Not that “nonprofit” is any better as a word.

“It describes tax status,” she said. “It doesn’t describe what you’re doing.”

But the word has been around long enough to be bundled up with an ethos of “communalism,” she conceded. "And it’s important not to lose that.”

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