Philanthropy & Funding

The Rise of Social Capital Market Intermediaries

Donors and grantmakers are allocating money more efficiently, thanks to the emergence of information and funding intermediaries such as Philanthropedia and Network for Good.

In 2004 we co-authored an article in the Stanford Social Innovation Review that asserted that the social capital market (money that funds the social sector) was woefully inefficient. The vast majority of donors and grantmakers were motivated more by their hearts than by their heads, making giving decisions without good information or meaningful evaluation about the organizations they funded. Consequently, the best nonprofits often were not rewarded commensurately for their good work, whereas...


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Notes

1 William F. Meehan III, Derek Kilmer, and Maisie O’Flanagan, “Investing in Society,” Stanford Social Innovation Review (spring 2004).

2 “And the Winner Is,” McKinsey & Company, 2009.