• DATE January 16, 2013
  • URL oneinstitute.com/tile/investing-for-impact/

Investing For Impact

How the language of mutuality emphasizes shared ultimate interests

As the nature of the relationship between foundations and nonprofits continues to evolve, a new way of talking about this relationship has emerged as well. Rather than using traditional “grantmakers” and “grantseekers” language, it’s increasingly common to hear people opting for the language of “investors” and “ventures.”

“Key to this metaphor is the notion of mutuality and the presence of important assets on both sides,” write the authors of Foundation Accountability and Effectiveness, a booklet produced by the Aspen Institute. “Also implicit in it is the notion that the investors have a stake in the success of the ventures in which they invest, a stake that implies potential assistance well beyond the narrow confines of finance… The underlying idea has great appeal as a way to change the mindset that has long dominated this relationship and open the way to new collaborative possibilities.”

The traditional ways of describing the foundation-nonprofit relationship relied on one-way language, leading to the simplistic impression that foundations are concerned merely with giving and nonprofits with receiving, while obscuring the important fact that funding is merely a means to an end. Today’s language of mutuality emphasizes those shared ultimate interests, and creates space for honest conversations about metrics, accountability, and returns on investment – motifs considered indispensable in business, but (at times) curiously overlooked in nonprofits.