Does grant-making need an overhaul?

The Atlantic magazine’s cover story last month was about the Clinton Foundation’s efforts to revitalize philanthropy [subscription required to read the full article] by bootstrapping and harnessing market forces for social projects, such as improving the HIV/AIDS drug supply to Third World countries and accelerating adoption of ecologically-friendly fuels and engineering. Here are some key quotes about how this relates to grant-making:

“The modern era’s predominant model for philanthropy, the grant-making foundation, is a century old… [T]he world has changed more than foundations have. In recent years, new generations have come to see the traditional approach as hidebound… ‘There is an urge for something other than the standard model of the grant-making foundation that dutifully delivers funds to nonprofit organizations that dutifully deliver the services,’ [said Peter Frumkin, the author of the recent book Strategic Giving: The Art and Science of Philanthropy].

Among the most promising of the newer models is something that has come to be known as ‘social entrepreneurship.’ As the label implies, it uses entrepreneurial methods and market mechanisms to solve social problems.”

This got me thinking about three things. First, how can government play a more prominent role in supporting and facilitating social entrepreneurship? Second, is there a better model that grant-making for the kinds of objectives that citizens have for government? And, third, should some of the resources currently devoted to grant-making be diverted to, instead, the engineering of more optimal market conditions through which competitive private entities can meet social goals?

What do you all think? Anonymous comments are welcome — click on the ‘Comments’ link below to post them!