Clara Miller, CEO of Heron, sets out how:
- 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
- Many U.S. philanthropic institutions today are structured to meet—and rarely to exceed—the IRS requirement of five percent minimum annual charitable payout.
- Baked into [the traditional philanthropic] structure is the sacrosanct belief that mainstream profit-making cannot be philanthropic and philanthropy cannot be market-connected, that grants could not be available without the profits that only unfettered capitalism can provide, and that furthermore, the best use of philanthropic grants is to finance nonprofits to be a cleanup crew for the inevitable mess real capitalism leaves in its wake.
- In 2012 Heron first declared its quest to deploy 100 percent of its investment capital toward its poverty fighting mission, without becoming a “spend-down” foundation—which was considered a groundbreaking approach at the time. With experience of working toward that goal, Miller appeals to foundations to abandon the common practice of separating grant making from endowment investments, and to instead merge mission and finance functions into a single office of philanthropic capital deployment, looking at both the financial and social impacts of every outlay of capital.
Source: The Heron Foundation