Innovation is crucial to the success of any business, because today’s environment has got the competition heating up, the market base shifting sides faster than one can say “innovate”, and profits spiralling downward. For enterprises to stay on top of the game—or even just stay afloat—they must constantly push themselves in order to capture a respectable portion of the market share.
However, innovation is no longer just the realm of business. As environments change, as global policies shift, and as donor attitudes develop, foundations and non-profit organizations must find new ways to engage the world’s philanthropists, make themselves relevant, and marry the needs of both their stakeholders and their “investors”—all while staying true to their mission. A few examples from Asia and around the globe highlight this urgent need.
A presentation given early this year at the Singapore Management University (SMU) by Jacqueline Khor, Associate Director of the Rockefeller Foundation and co-head of its Impact Investing effort, cited the opportunity for philanthropy “to leverage two phenomena that play a significant role in globalization: technology innovation and capital markets.” The Rockefeller Foundation’s Accelerating Innovation for Development Initiative is an example of the former and aims to “catalyze greater experimentation and... use open, user-driven innovation models to generation innovations for the poor and vulnerable.”
As in the Foundation’s partnership with InnoCentive, a global network of more than 160,000 “of the world's brightest minds” facilitates avenues for solving problems faced by the world’s poor and vulnerable sectors. “There are non-profits with potentially promising models,” Khor relates. “The hypothesis we are pursuing is that these open or user-driven innovation models might provide solutions more efficiently and effectively than traditional approaches.”
Khor also points out the benefit of going beyond traditional grants to fuse a corporation’s business objectives with a foundation’s philanthropic mission. She says, “There have been some foundations... that have been early pioneers in developing and using what are called ‘programme-related investments’. [This allows donors to] invest in organisations in a way that encourages both financial sustainability and management to operate in a much more business-like manner...”
A report in the Australian publication The Age also showed a growing trend among Asia’s philanthropists pledging huge portions of their assets to their foundations or other charitable institutions. Among those cited were Hong Kong billionaire Li Ka-Shing, the Mumbai-based Tata family, Malaysian entrepreneur Syed Mokhtar Al-Bukhary, and the Philippines-based Ayala family and John Gokongwei. More than purely altruistic purposes, these donations also serve to ensure good corporate governance among Asia’s growing philanthropic ventures.
The report states:
“This small but growing trend of transferring corporate assets to charitable foundations will help to improve corporate governance in Asia. Installing professional management so shareholder value can be maximised in the interests of charity is one reason why the Tata Group in India and Ayala Group in the Philippines are leaders in their respective countries in good governance. That important corporate players in Asia might be like a series of Bill and Melinda Gates foundations adds another interesting dimension to business in Asia.”
What do these developments spell for the future of the Asian philanthropic organization? Will these spur the emergence of new, hybrid organizations that fuse efficient for-profit operations with effective socially oriented programmes? And what does all of this say about how monies are being appropriated in the non-profit world and who ultimately controls the social purse? The results of all of these innovations will take a while to be realized, but it is clear that times are changing fast—and non-profits in Asia and around the world will do well to keep up with the demand for new and better ways of making a dent.
View the Singapore Management University article “Innovations in Philanthropy."