Private Wealth Management
Philanthropic Capital
Philanthropic capital refers to the act of donating money or offering concessionary financial products (e.g., low interest loans) to support a common good. Philanthropic capital can typically be deployed quickly and at any scale, allowing you to access hard-to-reach areas not covered by traditional social networks or financial markets. We often see it as a tool used to “double-down” to achieve a desired impact alongside other types of capital.
There are numerous ways to fund causes, and many individual donors are involved in more than one giving pathway, such as charitable trusts, donor-advised funds, public charities and private foundations. It can be challenging to know where to begin deploying philanthropic capital, so some donors start with smaller gifts.
Consider the following questions to identify ways to leverage your philanthropic capital:
- Is your giving sufficiently strategic? Do you have any type of giving strategy and associated outcomes?
- What is the time horizon for your giving relative to the impact you want to have?
- Where are there funding gaps in accomplishing your impact goals (e.g., areas not being served by investment capital)?
- How can you listen to and engage community members and diverse voices with your philanthropic resources?
Philanthropic Capital - In Action
In August 2020, Hurricane Laura made landfall in Cameron, Louisiana, with Category 4 winds, resulting in an 18-foot storm surge and $19 billion in damage. The community was devastated and already struggling to address the Covid-19 pandemic. The hurricane closed Covid-19 testing clinics, and the pandemic further complicated evacuation, sheltering and eventual search and rescue efforts.
Skyline Foundation recognized that the convergence of a natural disaster and ongoing threats of Covid-19 would require rapid support, so it acted with a targeted donation to the Community Foundation of Southwest Louisiana. Skyline Foundation was started by Yahoo! co-founder David Filo and his wife Angela in 2001 and focuses on a variety of grantmaking areas, including equity in education, climate solutions, just democracy and birth justice.
Skyline Foundation has a long history of leveraging philanthropic capital, but in the case of Hurricane Laura, the use of philanthropic capital was especially strategic. By granting to the Community Foundation of Southwest Louisiana, the Skyline Foundation was able to not only provide relief funds quickly but did so to the highest and best use, given the local, on-the-ground expertise of the community foundation.
Key Takeaways: Leveraging local intermediaries can amplify the impact of your giving.
Philanthropic Capital - In Action
During his lifetime, former chairman and CEO of Playtex Joel Smilow saw charitable giving as a key to improving the health of the communities in which he worked and lived.
Funding medical facilities and research were core pillars of Joel’s philanthropic work. Joel funded numerous hospital and healthcare organizations throughout his life, improving current and future patient care at institutions including the Smilow Cancer Hospital at Yale New Haven Hospital and the Joan and Joel Smilow Research Center at New York University.
Joel’s legacy of giving was adopted by his son Bill, and over the last decade they worked together to further the family’s philanthropic missions. Bill quickly developed his own appreciation for the challenges and opportunities of advancing medical research. Recognizing the need to accelerate research in the face of growing health disparities, Joel and Bill collaborated with the University of Pennsylvania to provide a transformational gift to support Penn Medicine’s translational research activities. The collaborative and innovative approach of the Smilow Center for Translational Research allows scientific discoveries to provide patient benefits that are both more immediate and effective.
Bill became the president and CEO of the Smilow Foundation in 2021, and his core focus areas continue to be collaboration and innovation in medical research, along with excellence in patient care. In addition to annual gifts, Bill supports his local Philadelphia healthcare system through his leadership as a member of the Penn Medicine Board, Penn Cardiovascular Institute, Penn Orthopedics Leadership Council and Penn Medicine Development Leadership Cabinet. Bill also supports communities nationwide by serving on the Board of Governors of the TGR Foundation.
Key Takeaway: Share your passions openly and often to inspire future generations to carry them forward.
Last Revised: August 2024
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