Philanthropy's big buzzwords of 2009

Lucy Bernholz

TEXT OF INTERVIEW

Kai Ryssdal: The economy is still mostly stuck. A lot of people are out of jobs. And a lot of them are looking for help. Problem is a recession can't tell the difference between for-profits and not-for-profits. And those nonprofits -- organizations that are designed to help people in need -- are being squeezed as well. Best guesses are the hurt's only going to get worse over the next year or so. The silver lining is that people are still finding ways to squeeze in some charity.

To kick off our philanthropy series this year, consultant Lucy Bernholz once again. As she has in the past, she joined us for a chat about the top charity-related buzzwords of the year -- 2009, she says, was the year where necessity was the mother of social innovation.

LUCY BERNHOLZ: We've got quite a bit of very business-orientated buzzwords for you this year. So the first one will be impact investing.

Ryssdal: And what is that?

BERNHOLZ: Well, it's the term of art for what you might think of as the active side of socially responsible investing. So it's people looking to put their financial resources to work for a quantifiable financial, social and environmental impact. So think of using your philanthropic resources to support affordable housing developments, or medical disease research, community loan funds.

Ryssdal: So where does that play out in the regular economy? Do these kinds of investments sort of supplant what happens with foundations?

BERNHOLZ: Well, a lot of them are coming from foundations. We can count about $5 billion currently coming from foundations going into these kinds of impact investments, and 2009 saw an awful lot of organizing around that. Here's a prediction for you: in 2010 we will have an Impact Investing Index.

Ryssdal: Wow, really?

BERNHOLZ: You bet.

Ryssdal: All right, well you heard it here first. What about buzzword number two.

BERNHOLZ: If impact investing is about finding new ways to finance social good, the second buzzword is B corps., and these are about finding a new way to deliver social good.

Ryssdal: All right. Explain. B corps.

BERNHOLZ: B corp. is a benefit corporation, and it's a new form being pushed through to become law in states. Right now it allows small business, any kind of enterprise, to organize and incorporate deliberate public benefit right into their chartering documents. You're seeing lots of entrepreneurs saying, "Wait a second. I wanna be able to build a sustainable business that's as committed to producing some kind of public good as it is to producing the financial benefits."

Ryssdal: Some examples out there?

BERNHOLZ: Method cleaning supplies, NUMI Tea, and my own company, Blueprint, Research & Design.

Ryssdal: Well, I guess, well, that kind of makes sense, actually. All right, so the last buzzword.

BERNHOLZ: Well, the last one is mergers. Back in 2008, when things really hit the skids, we heard some pretty dire predictions about contraction in the sector. Start to see a lot of the nonprofit organizations merge or go out of business. It's picking up in pockets all over the country as nonprofits, which spent most of 2009 cutting their capacity as close to the bone as they possibly can. They're going to have to start getting strategic in looking for alliances with other organizations.

Ryssdal: Does that translate into less of a footprint in communities by some of these charitable and philanthropic groups?

BERNHOLZ: Well, hopefully it will translate into a more efficient footprint. But yes, it's likely that we'll just lose organizations that we were relying on, and we'll have to figure out some new way of making sure that the communities still get served.

Ryssdal: Lucy Bernholz. She's the president of Blueprint Research & Design. That's a consulting firm for philanthropic institutions, and individuals as well. Lucy, thanks a lot.

BERNHOLZ: Thank you, Kai. See you next year.

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