When to Invest & When to Give

This is part two of a six part series exploring the sessions in the Tactical Philanthropy track at the Social Capital Markets conference.

Session Description: When to Invest & When to Give
For all the talk of producing a blend of social and financial value through giving and investing, little is known about when a social investor can maximize his or her blended returns through a donation and when an investment is a better option. This session will use Evergreen Lodge, a social purpose destination resort in Yosemite, as a case study for when to give and when to invest from both the enterprise and investor/philanthropist perspective. Join Evergreen Lodge owner Lee Zimmerman and his venture capitalist/philanthropist financial backer Stuart Davidson as they discuss the role of philanthropic and social investment capital in the growth of Evergreen Lodge.

  • Melinda Tuan, Melinda Tuan Consulting
  • Stuart Davidson, Woodcock Foundation
  • Lee Zimmerman, Evergreen Lodge

As the interest in impact investing, microfinance and other forms of financial transactions which attempt to create social impact while achieving a financial return have blossom, one worrying trend is the assumption some people make that these forms of social support are superior to philanthropic donations.

Imagine you have an opportunity to make a donations to a nonprofit, make a loan to that same nonprofit or make an investment in a for-profit, socially focused organization. How should you decide? While financial professionals have a robust set of tools to decide what sort of investments to make, relatively few tool exist to help a donor/investor chose between various forms of financial support.

In this session, Melinda Tuan (a founder of pioneering social enterprise funder REDF) will lead a conversation with Lee Zimmerman, the founder of the hybrid social enterprise Evergreen Lodge and Evergreen Lodge supporter Stuart Davidson who has deployed both philanthropic donations and for-profit investments in an effort to assist Evergreen.

The conversation will work to flesh out both the enterprise view of investing vs. giving as well as the investor/donor perspective. What sorts of capital do nonprofit and for-profit social enterprises need to grow their organization? When might a donor choose to provide philanthropic capital instead of profit seeking capital when both options are available?

If the social capital markets in fact covers the spectrum of all capital for good, from pure philanthropic capital to pure profit-seeking capital, we must have a framework for making capital allocation choices across the spectrum. Without a full capital market approach to social capital allocation, philanthropic capital risks being ghettoized as a sort of negative 100% “investment” as other forms of social capital investments become more prevalent.

Click here to register for the conference. Nonprofit employees are eligible for a 40% discount and all readers of Tactical Philanthropy are eligible for a 30% discount (email me for the code, it expires today).