For the private philanthropies I have served, grants alone are insufficient to the full realization of purpose, particularly when viewed in the context of the vast dollars available to the public and private sectors and to the staggering complexity of public and market systems. 

Both the foundations I have headed – McKnight and Kresge – have accordingly wrestled with the tension zone between grantmaking that is primarily responsive charity and activities that aspire to be more strategic. 

Both institutions, together with the field of philanthropy, have come to recognize that purely charitable grantmaking can only go so far in changing the fundamental social and political dynamics that shape our citizens’ day-to-day quality of life and their long-term trajectories of opportunity. One has no choice but to step onto the larger stage of public policy, civic relationships, and economic systems in order to shatter calcified patterns of injustice.

It’s so easy to become focused on a particular grant or immediate need that we sometimes forget the enormous privilege accorded to private foundations to take a holistic, long-term view, to stitch together threads that seem distinct and unrelated. 

And because our assets secure our survival, we can cultivate the kind of patient intelligence that permits us to go deeply into an issue over a long period of time, chipping away at seemingly intractable challenges, making a difference in ways large and small.

Private philanthropy – free as we are from re-election cycles, quarterly profit reports, and appropriations from others – has the independence to take risk. Not just the modest risk entailed in individual grants, but the larger bets that promise true innovation and transformation. 

Philanthropy acting as society’s social venture capital, investing where private and public markets will not, or cannot. And in the process setting in motion a fly-wheel able to demonstrate that capital can flow with a different valence to low-income and low-wealth communities.

At root, we in philanthropy make grants. But we can put our institutional equity on the line in any number of other ways as well. We can convene people as a way of forging relationships, promoting joint inquiry, and fostering concerted action. We can pursue strategic communications to strengthen public understanding of, and engagement in, the work of grantees. We can invest directly in social enterprise though program-related investments, loan guarantees, equity investments, and other forms of financial leverage.

Although private philanthropy joins with others in promoting society’s full spectrum of worthwhile activities, its support assumes particular importance for organizations that serve as our society’s moral thermostats, flipping into the on-position in the presence of suffering, injustice, or callous behavior.