From the Ottawa Citizen (hat tip to Ani Hurwitz):
The TSX may be flagging, but a Toronto-based non-profit foundation is betting that the IPO it offered yesterday at the exchange is the way to raise $1 million to fund programs for girls by the end of the year.
The IPO — as in “Immediate Public Opportunity” — of the Girls’ Growth Fund is a fundraiser by the Canadian Women’s Foundation.
Shares in the fund are $100 each. Donors get a share certificate and a prospectus. The funds will be used to support programs that develop self-esteem, leadership and critical thinking skills for girls between the ages of nine and 13 over the next three years.
While there is no monetary return, the IPO is one of a new breed of fundraisers billed as an investment that builds “social equity.”
…The non-profit IPO concept has been used before in charitable circles in the United States — last month, George Overholser of Nonprofit Finance Fund told The Economist that about $200 million U.S. in “philanthropic equity” has been raised in recent years.
…As the idea developed, the Girls’ Growth Fund had its eye on Mr. [Warren] Buffett’s philanthropist sister, Doris Buffett, said Ms. Babcock. It was a coup that Ms. Buffett agreed to become one of seven “angel investors” who bought $10,000 in shares in advance of the IPO.
BMO Financial Group chief economist Sherry Cooper was also an angel investor. Another 100 high-profile individuals purchased at last one share before the IPO, including writers Margaret Atwood and Gloria Steinem, former diplomat Stephen Lewis, actress Jane Fonda and Indigo Books founder Heather Reisman.
…The non-profit IPO is a bit of a gimmick. But it is one that plays into a growing mindset among donors, who see their contributions as more of an investment than a gift.
This is a pretty fascinating article. The author (knowingly it seems) blends together the “marketing gimmick” of the IPO concept with the new accounting methodology being put forth by George Overholser when he refers to “philanthropic equity”.
Part of me reads about the “IPO certificate” and the “prospectus” and is annoyed that what appears to be a typical fundraising effort is being dressed up as a new sort of “investment”. On the other hand I see the excitement the offer generates and the well known donors and it validates my belief that people want to give in a financially sophisticated way, but don’t know how.
What do you think? Is the Nonprofit IPO concept dillutive to real efforts at building philanthropic equity or is it a positive sign of donor demand?