The Wall Street Journal on Nov. 9 ran an interesting article about new ways that philanthropists are employing to extend the value of their contributions. I encourage you to read it because it explains the approach the One5 Foundation is using in our work in Haiti and Malawi.
The article states, “Instead of simply giving money away to a cause, groups and individuals are plowing their funds into financial vehicles—known as program-related investments—that let their money grow while it does good. So, rather than make a one-time gift of $1,000, they might invest in a project that generates revenue, such as a loan to an entrepreneur in the developing world or real estate that rents to nonprofits. The returns can then go to other causes.”
In light of the economic downturn many donors would rather see their money go directly to the causes they support, rather than to the investment portfolios of foundations, where their donations can diminish when the value of the investments fall in a volatile market. While large corporate donors have used such program-related investments in the past, today more and more individual philanthropists are following suit.
“And lots of options are springing up to help donors along, from specialized donor-advised funds to opportunities to invest in microfinance and community development,” the article states.
The One5 Foundation has a mission to target children’s health in developing countries and a focus on the top five diseases that afflict them. It is right in line with these new philanthropic trends noted in the Journal. We are establishing our own micro-financing operation and have partnered with the NCM/C3 Global Growth Fund to encourage individual initiatives on the ground in the developing world. This provides a greater opportunity for entrepreneurs to get involved and to invest in developing new businesses. Through investment funds we can make the financial resources available for local businesses to develop and grow.
In this way, people who can only invest a few hundred dollars can direct their investment to an individual in Haiti or Malawi with a good idea who can build on that small investment. They can even get their investment back at a specified time or use it for more good work.
Even in these challenging times, a small investment can result in a world of good.