Philanthropic Investment

Philanthropic Investment

A return on investment is good, but making a difference with a return is even better. Every Philanthropic Investment we make has a story that changes lives.

The word philanthropy comes from the Greek philanthrōpía which means a “love for mankind.” The Beatles's sort of had it right when they sang “All You Need Is Love,” but it’s only half the necessary ingredients. Coupling the words “philanthropy” and “investment” together establishes the core thrust of what we do here at Emerging Ideas.

(Photo: Angela Sevin)

Aid vs. Investment

Dambisa Moyo, author of the award winning book Dead Aid, writes about the fallible aspects of simple aid.

For a simple example, it’s like parents giving their 16 year old a car and saying, “You don’t have to work for this.” If something is free, it’s often abused. If you have to pay it back—there is an anchored tug at character and responsibility; and responsibility is what Africa needs more than aid. Donations alone can fuel an accountability problem. And that's exactly what's happened in many nations in Africa. It’s easy to walk away from donating and say, “Well hopefully it does good.”

Investment is different—it’s making sure that the money that goes in makes a difference now, and for years to come. Investment also brings with it the responsibility of giving back, of keeping expenses low, and making a difference for a lifetime not just a season.

What Is Philanthropic Investment?

We have started and implement a model that we call "Philanthropic Investment." A Philanthropic Investment starts by identifying a person who has excellent domain expertise, strong personal qualities, and outstanding integrity and character. We look for someone who cares. Cares about succeeding in life. Cares about making something of themselves. Cares about other people and making a difference in their area of the world (not everyone cares). We get to know their story and then dig out their ideas (everyone has an idea). Every person has an idea, and not every person cares.

We don’t look at an idea or a deal based on size (Think: “We only do $10 million and up.”). We look at a deal based on who’s involved. We invest in character. How? We get to know people.

If we like an idea and the plan is workable, we work the idea and the entrepreneur through our scrutiny process—we analyze things like the people involved, the purpose of the business, the plan, the partners, and the length of the investment. It has to make money. A business that helps people but doesn’t make money is a charity.

Once it starts to make business sense, we take them through our incubation process: Brand Identity, Market, Relationships, Systems, and then Money. We facilitate the smallest investment possible and finally build a company that makes the difference the entrepreneur initially wanted to make. All the while the investor gets an ROI, the entrepreneur has a consistent source of income, and we all make an impact. Like a pride of lions on the hunt.

And the entrepreneur's story is birthed.

When putting money into a project you must get a return (unless it’s a donation). This allows for added accountability and helps to avoid the black holes of never ending need that foreign aid often and usually creates.

Everyone has an idea, but not everyone has good, strong character—so we identify the character and then engage in Philanthropic Investment. It’s philanthropy with an return on investment (ROI). And what could be better than getting an ROI while the Beatles sing “All you need is love?”

To read more about how we work and the process we use, click here.