Alternatives to Traditional Philanthropy

Avery Fontaine, head of Hawthorn Purpose for PNC Private Bank Hawthorn, offers a look at ways families can make an impact with their money beyond traditional philanthropy.

“Impact investing is deploying capital that seeks both a social and financial measure. It goes beyond traditional philanthropy. When someone asks, ‘How do I deploy capital to solve a problem I care about?’ Philanthropy is one level.

Additional ways to fund across the spectrum are:

  • Partnering with a nonprofit to fund projects via debt as well as with grants – program-related investments, low/no-interest loans, etc.
  • Direct investment, equity or debt, into a for-profit company also measuring a social outcome
  • Engaging with government on policy, nationally, regionally or locally via social impact bonds, creating a 501c4, or funding tri-sector projects

Families who fund across the spectrum often require more than one vehicle to accomplish their goals. They may choose a philanthropic vehicle, such as a private foundation or a donor advised fund, to make grants to nonprofits. Then they add or “stack” various purpose-driven vehicles to their philanthropy: Philanthropic Purpose LLCs, 501c4s, 527s, and/or start their own social purpose business (B Corp or Benefit Corp). 

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It’s liberating for families to understand they don’t have to be traditional philanthropists if they don’t want to be. They can think through all the different ways to show up in their community, deploy their capital and share their expertise.”

About the Author

Margaret Steen

Margaret Steen is the editor of FO Pro, The Family Office Professional. Based in Silicon Valley, she has written for Family Business Magazine for more than 15 years.


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