Recently, Yale SOM students Tommy Day ’15 and Peter Grunert ’15 debated the merits of investing in social innovation projects on the Skoll World Forum website. The students participated as representatives of SOM’s Social Impact Lab, a regular student-run discussion group and a contributor to the Forum’s debate series.
While Day calls for increased investing to fund innovative solutions to major societal problems, Grunert says there are hidden costs to such investments.
To my knowledge there are no philanthropic success stories that started with the exclamation, “Let’s do the same thing we were doing before!” On the contrary, solutions for society’s biggest problems are born out of creative thinking that extends the boundaries of possibility—whether through a new approach to an old problem, or the recognition of a problem that has been ignored.
When we allocate scarce resources to innovation, we need to fully understand the true benefits and costs of that decision, not just to the funders but to the beneficiaries as well—and not just the explicit costs, but the opportunity costs as well. Only once we fully account for all those costs can we efficiently and effectively allocate limited philanthropic dollars to a combination of traditional and innovative social interventions.
The role of innovation in philanthropy is a focus of the Yale Philanthropy Conference, a student-run, full-day event on February 13.