NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, January 28, 2016

The Heron Foundation today is calling on its philanthropic peers to jettison outdated operating models that leave resources untapped in the face of systemic social ills. In a treatise entitled “Building a Foundation for the 21st Century,” Heron President Clara Miller makes the case that the modern economy demands a different practice of philanthropy, one that makes use of all of its resources to actively engage with the capital markets for the public good.

Heron, whose mission is to help people and communities help themselves out of poverty, is among a growing number of institutions and investors working to advance the practice of philanthropy to match the needs of modern society. Many U.S. philanthropic institutions today are structured to meet—and rarely to exceed—the IRS requirement of five percent minimum annual charitable payout.

Miller’s essay comes as number of bold moves have brought new attention to the philanthropic sector and its relationship to the economy at large. The Ford Foundation’s President Darren Walker announced a new strategic direction focused on inequality, while Facebook founder Mark Zuckerberg pledged the majority of his wealth toward fixing social ills, making the deliberate choice not to do it via the rubric of a traditional private foundation.