Beyond the balance sheet, the act of giving generates a unique dividend for the investor.
In the conventional ledger of philanthropy, the accounts appear straightforward. Capital flows in one direction. Donors – whether individuals or institutions – allocate financial or human resources to a chosen cause.
The return on investment is tallied in social good: lives improved, ecosystems preserved, knowledge advanced. Any benefit to the giver is typically recorded as reputational enhancement or moral satisfaction.
This model, however, is incomplete. It overlooks a fascinating and powerful anomaly observed in the micro-dynamics of fundraising, particularly for causes with significant social externalities.
Read more at The Business Times.
Author's summary: Strategic philanthropy pays a purpose premium.