The past decade has witnessed the rise of a new generation of philanthropists who, in addition to their wealth, leverage their business thinking, creativity and clout to achieve meaningful, sustainable socio-economic change.
Professor Rajesh Chandy holds the Tony and Maureen Wheeler Chair in Entrepreneurship and is a professor of marketing at London Business School. Known for his invaluable work with micro-entrepreneurs in India, South-East Asia and South Africa, Professor Chandy has been closely observing the rise of philanthropreneurship.
In this interview, Professor Chandy sheds light on the new frontiers of philanthropy and how charity is now a social investment – one that is impactful, scalable, sustainable and fully transparent.
Question 1: Today’s entrepreneurial philanthropists or “philanthropreneurs” are keen to contribute much more than just their wealth. How would you define philanthropreneurship and what are the key characteristics of a philanthropreneur?
To clarify the meaning of the term “philanthropreneur”, it is worth noting the definitions of its constituent parts. Philanthropy involves giving money or time to help make life better for others. Entrepreneurship involves envisioning and leading a new (and potentially risky) venture or initiative.
Given these existing definitions, I define a philanthropreneur as a person who applies creativity and leadership in dedicating money or time to make life better for others. Philanthropreneurship therefore involves four elements.
First, the driving force must be a passion to make life better for others, especially those who are underprivileged.
Second, there has to be an element of giving, whether this is in terms of money or time.
Third, there needs to be creativity, the envisioning of novel approaches to solving problems.
Finally, philanthropreneurship requires leadership; directing, organising, and influencing the efforts of others.
Question 2: How has giving changed in the past five years and how do you see philanthropy in the next five years?
The world of philanthropy has changed dramatically in the last few years – and these changes are here to stay. Here are my top five changes:
- From checkbook philanthropy to active engagement – involving attention and effort – by philanthropists. More and more philanthropists contribute not only their money and effort, but also their experience and networks to the causes they champion.
- From philanthropy by the few to philanthropy by many. Distributed philanthropy, in terms of both those who give, and those who receive, is far more prevalent today – and will only get more prevalent.
- From suspicion and antagonism to active collaboration between the social sector and the business sector. The power of business to do good – and to do so at scale – is recognized much more today than before by NGOs, governments, and indeed businesses themselves.
- From isolated islands to a connected planet. Game-changing ideas, technologies, and solutions today are far more likely to travel across geographies and sectors than ever before. Philanthropreneurs can seek inspiration and lessons not only within their own communities, but also from those who are physically and by background very distant from themselves.
- From stories of impact to evidence of impact. It used to be the case that a moving video would go a long way to show that a philanthropist’s contributions are having an impact. The expectations on evidence of impact have gone up dramatically. Not every initiative needs a randomized controlled trial to prove impact, but philanthropists are more rigorous now in measuring what works, what doesn’t, and why.
Question 3: Philanthropists from the “Global South” are embracing creative and entrepreneurial approaches to address major regional and global issues. What lessons can we learn from the emerging markets?
We live in a period of unprecedented change. The impact of this change is most evident in the Global South. In the aggregate, the number of those living in extreme poverty has gone down dramatically in the last two decades, and practically every metric of social development – for example in health, in education, in gender equality – has improved (often dramatically) relative to the past. Much of this progress has happened in the Global South in recent years. I draw at least three lessons from the philanthropreneurs – in civil society, businesses, and in government – who have helped the world achieve these incredible feats.
- Simplicity: Most successful interventions – from the mobile phone revolution to AIDS cocktails to solar lamps – involve simple solutions for those who adopt them. The process involved in creating simple solutions for users can often be complex, but impact happens because the solutions are easy to understand and to adopt.
- Frugality: Many in the Global South still live in a world of scarcity and constraints. From the entrepreneurs’ side, constraints can sometimes be debilitating, but they can also unleash creativity. Frugal innovation (as my friend and frequent collaborator Jaideep Prabhu calls it) allows entrepreneurs to achieve more with less. An example is this year’s winner of the Nobel Prize in Medicine, Tu Youyou, whose work on malaria saved the lives of millions. Working in frugal conditions, she combined insights from traditional Chinese medicine with those from modern clinical trials to help change how a deadly disease is treated worldwide. As the world at large seeks to reduce the resources it uses to create progress, we can look to such frugal innovators for insight and inspiration.
- Scale: The Global South is a big place. Meaningful impact in a place like India or China is not achieved by doing things in small measures. But scale up is quite different from start up, and requires very different ambitions, skills, and resources. So those who achieve scale in the millions – or indeed in the hundreds of millions as in the case of the microfinance revolution pioneered by Muhammad Yunus – have much to teach us on how to go from start up to scale up. How does one create not just organizations, but entire movements? How does one motivate and manage those over whom one has little coercive power? How does one stay true to ideals, while executing and evolving? These are all questions to which pioneers from the Global South offer us many lessons.