Is philanthropic investment just a contradictory term to make charity sound business-like? In the
The answer turns out to be the cultural inertia within foundations and non-profits. A return on capital requires a different sort of rigor than social work. And this is just the tip of the iceberg. In 2004, US foundations granted $32 billion, but they held $476 billion in assets. Imagine 1% of this principle corpus invested in microfinance, this would open the door for commercial capital investment. Whereas most huge chunks of capital (pension funds, insurance companies, mutual funds, hedge funds) fall under the ‘prudent man’
The irony of course is that microfinance may well out-perform the market, so prudent man would be irrelevant. But, we are not an asset class yet, so to get there, we look for leadership not just in your grant-making, Mr. Omidyar, but in your asset management. PRIs are an opening for you to introduce Wall Street to our emerging asset class.
Again, to give Mr. Omidyar and his group the benefit of the doubt, maybe his asset managers and his grant-makers do eat lunch together regularly, maybe they are just ramping up, and will fulfill his righteous vision one day soon.
Additional Resources
1) The
2) Although dated, the best document discussing PRI trends is still the
3) MicroCapital Blog: Mr. Omidyars Philanthropic Vision: a Work in Progress, Part 1
Similar Posts:
- MICROCAPITAL BRIEF: Impact Asset Management’s Dual Return Vision Microfinance Funds Issue Loans to MFIs in Ecuador, Georgia, Kyrgyzstan, Paraguay
- MICROCAPITAL BRIEF: Opportunity International, UPS Foundation Announce “Unstoppable Women Initiative” to Expand Financial Services in Colombia, India, Indonesia, Nigeria
- MICROCAPITAL BRIEF: EIB Lends Credo Bank $10m for MSMEs in Georgia
- MICROCAPITAL BRIEF: David Grimaud Named CEO of Palladium Group’s Bamboo Capital Partners
- MICROFINANCE PAPER WRAP-UP: “Private Asset Impact Fund Report 2022;” by Anne Estoppey, Ramkumar Narayanan; Published by Tameo