Entrepreneurs using wealth and power to transform society are not a new phenomenon. A century ago, Andrew Carnegie’s love of libraries helped bring education to the masses, and he spent millions promoting world peace. Today’s "philanthropreneurs" are equally ambitious—and they’re succeeding, while redefining what it means to give and give back.
Historically, the rich endowed their estates upon death. Or, from a distance, they wrote their checks and went on with their lives. Twenty-first-century philanthropists have a much more interventionist interpretation. They recognize that a check really is a piece of paper and can only go so far; not only do the wealthy want to give their money away while they're still alive, they want to play an active role in doing so. Charity has become a social investment, impactful and measurable.
In particular, the work of Bill and Melinda Gates has helped to recalibrate what exactly philanthropy is—or can be—and how philanthropists can bring their wealth to bear in more productive and long-lasting ways than simply bestowing money to go toward a problem. As London-based independent charity the Stars Foundation has aptly said, philanthropreneurs are "reclaiming ‘enterprise’ to mean more than simply ‘for profit.’"
At the heart of philanthropreneurship is the idea that the same skills that enabled people to make their fortunes are often the ones required to solve seemingly intractable social problems. Philanthropreneurs leverage their creativity and leadership—and their money—to try to make life better for others. Jeff Skoll and Pierre Omidyar of eBay. Virgin’s Sir Richard Branson. Steve Case of AOL. Ted Turner, Bono, and Oprah. Each of these wealthy individuals brings his or her entrepreneurial chutzpah and business thinking, along with a checkbook, to some of the world’s most pressing challenges. They’re not acting alone.
This modern philanthropreneurship approach goes far beyond compassionate capitalism. No longer is money mostly invested in things, but in people who can make things happen. Philanthropreneurs cast wide nets, pooling the resources and expertise of a multinational network of people who want and have the means to lend their thinking, connections, or cash. Often, it’s the collective capacity of brainpower that achieves goals. Bill Clinton’s Global Initiative, for example, brings together thousands of world leaders to seek sustainable solutions to combat diverse problems.
Philanthropreneurship is also changing the way businesses work from the onset. More startups are pursuing philanthropy and entrepreneurship simultaneously—rather than waiting to amass wealth and donate to do good later. The philanthropreneur business model involves working donations of time, effort, and money into the very core of how a business operates, such as Salesforce.com’s 1-1-1 philosophy, which commits to leveraging 1% of the company’s product, equity, and time to improve communities around the world.
Likewise, there are those who embrace social entrepreneurship from within profit-seeking enterprises. For example, Nick Hughes conceived and helped launch the groundbreaking mobile payment service M-PESA while working for mobile technology company Vodafone Group. Since 2003, M-PESA (pesa is the Swahili word for cash; M stands for mobile) has transformed millions of lives by providing money access to the "unbanked" via cell phones. What started as a corporate sustainability project has become an important tool of personal financial security and economic development in Kenya.
Whether they're corporate leaders, political figures, celebrities, for-profit companies, nonprofit organizations, or even academic institutions, all philanthropreneurs share four integral traits:
- Passion to make life better for others
- Willingness to give, in money, ideas, and/or time
- Ingenuity to envision new approaches to solving problems
- Leadership and the ability to direct, organize, and influence the efforts of others
Together, philanthropreneurs are more than the sum of their parts. If you ask Unilever’s Paul Polman what business he’s in, he’ll respond, "The business of doing good." Polman, who recently spoke at the Philanthropreneurship Forum hosted by London Business School, described Unilever as the biggest NGO of all, helping save millions of lives through soap.
Philanthropy is a risky business. It always has been. Generosity can easily be frittered away. Money and effort can be both misdirected and mismanaged. But the positive still outweighs the negative. I view philanthropreneurship as a movement—one of impact, scale, and sustainability—and it’s gaining momentum.
More people in all corners of the world are experiencing firsthand those who do not have as much. Our younger generation seems far more socially conscious and keen to make sure they do things worthwhile and meaningful. They align themselves with people, organizations, and causes that do the same. We’re more aware, connected, and motivated than ever to make a difference.