07/09/2021

Nonprofits in the Era of Stakeholder Capitalism

Benefit from this new era in four ways

As larger and larger sums of capital move into sustainable and impact investing—now accounting for $1 in $3 of total assets under professional management in the US—nonprofits must adapt to a world where money from public, private, and philanthropic institutions is increasingly co-mingling to address everything from inequality to climate change.

Nonprofits should not try to turn themselves into Wall Street institutions, of course, and many nonprofits operate in areas unaffected by the growing sustainable and impact investing sector. But as a 2017 study observed, only two of the 17 Sustainable Development Goals—peace and justice and partnerships for the goals—had no prospects for private investment (and although not every subgoal within the other 15 goals lends itself to investment capital, a considerable number of subgoals ripe for investment wereidentified). The explosive growth of double bottom line investing not only provides many nonprofits a way to raise new money but also provides a significant opportunity to grow their influence in this new era, innovating how they raise capital and influence financial actors to keep up with changing times.

Our experience as grant-makers and investors—seeding many of the innovations that have taken shape as a result of collaborations between capital markets and the nonprofit sector—tells us that nonprofits can benefit from this new era in four ways.

Please select this link to read the complete article from SSIR.