Do you know that not all dollars that non-profits receive are equal?  In fact, where dollars in the social sector come from is actually quite important.  Private philanthropic dollars are unique and provide a distinctive opportunity for leverage when philanthropists take advance of this opportunity.

The majority of social sector activities are funded by two sources, private philanthropy or government dollars and each of these funders brings a different set of assets to the table.  Governments provide large infusions of money to social issues often scaling approaches or organizations. In fact, governments around the world provide the most funding for social services even in resource poor countries.  Think about the money a national government provides to a public health system in a developing country; no private money could ever match that kind of spending for medicines, clinics and healthcare providers.  However, government funding has its limits, and it is not generally very flexible.  Because governments are accountable to taxpayers, its funding usually goes towards proven programs with track records of success—not usually to start-ups or innovators.  In addition, government grants are also usually large so the non-profits receiving those grants must be large enough to have the capacity to handle and disperse the grants. Finally, applying for government grants usually involves a fairly complex application process and navigating some bureaucratic red tape which means that organizations without the knowledge or capacity to do this lose out.  What all this means is that governments generally fund larger, well established organizations who have already established proof-of-concept around how the create change or fill social needs.

In comparison, philanthropic dollars have none of these strings attached, and philanthropists are free to spend their dollars as they see fit.  This makes philanthropic dollars unique and means that philanthropic dollars are highly leveraged when they are spent on activities that governments cannot fund.  There are many powerful opportunities philanthropists to take advantage of. Philanthropists can fund higher-risk opportunities that might provide proof-of-concept so that an organization can later receive government funding.  Or, providing funding to smaller organizations or start-up fosters organizations that do not yet have the opportunity to apply for government funding.  Another highly leveraged opportunity might be to provide capacity building support (e.g. training or funding a government grant writer) so organizations can develop the expertise they need to apply for larger government grants.  There are also many opportunities to provide funding around the edges of what the government provides. For example, if a government is funding a health clinic, perhaps patients need transportation to get to and from that clinic to make it truly accessable. There are many activities creative philanthropists can undertake to fund that will leverage their funds.  What is important is to understand the unique opportunities their dollars can provide and then begin to imagine the possibilities!