Philanthropic ventures vs charity donations in 2020

We all want to make a difference – now more than ever before. There have been many significant events in 2020 which have inspired some incredibly compelling causes, such as charities for coronavirus relief, the black lives matter movement, and the climate change crisis.

With millions of lives in jeopardy, it’s not enough to just sit back and watch the government take care of things. As such, many people have decided to donate to charities and begin philanthropic ventures in 2020. But what exactly is the difference between these two humanitarian acts? Which is more likely to have an impact?

1.) Types of funding

Venture philanthropy and charity donations are two different ways to provide funding to social causes. With charity donations, typically, you give a small sum of money to charitable organisations, as frequently or infrequently as you want. It occurs in the short-term.

Venture philanthropy, on the other hand, focuses on the root cause of social issues and adopt a more long-term strategy. Usually, a much larger sum of money is donated.

2.) How is the money spent?

Charity donations help resolve the short-term issues of a social cause. They provide almost instantaneous relief as your money is used for an immediate solution, such as buying food for the homeless. However, this doesn’t do much to completely resolve the issue, and your donations might also be used for less relevant things, like charity advertising campaigns.

Meanwhile, venture philanthropy gives you complete control over where your funding goes. Though the impact of your investment isn’t immediately obvious, it’s incredibly helpful for the overall disaster relief, especially after charities lose momentum.

Let’s use an easy example by looking at the aftermath of a tsunami. Charities will help to provide temporary food and shelter to residents, while philanthropy will focus on funding construction companies to rebuild the lost homes. To find out more, read this book by Tej Kohli which shows you how to make the very best of a philanthropic venture.

3.) Different motivations

Donating to charity is seen as an entirely selfless act because there’s nothing that a person would get in return for doing it, aside from a feeling of accomplishment. Venture philanthropy, however, is perceived to be a little more self-serving because it’s tied up with investments.

When you invest in a company, you’re funding their activities, but also receive a percentage of shares which might later translate into profit. As such, people tend to be more sceptical of philanthropists. But are we just being cynical? Does it matter because either way, they’re doing good for the world? And how else are these expensive ventures going to be sustainable?

These are the main differences between charity donations and venture philanthropy. They’re both essential in resolving social issues and disaster relief, and they also both come from a place of wanting to do good in the world.