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Rational Games is a social business:  we exist to lend our support to projects and organizations that make creative use of games and play to resolve conflict.  So this month’s blog focuses on that side of what we do.  Specifically, I have been especially intrigued in recent weeks by the tenets of “Venture Philanthropy”.

In October 2017 I blogged about Impact Investing (II), the now mammoth sector of the business world straddling the border between market-based investing and traditional philanthropy.  With over $500 billion now in “assets under management”, this has become a major movement in the financial world and has, since its inception in 2007, already succeeded in mobilizing large pools of private capital from new sources to address the world’s most critical problems, going beyond the social to the environmental and more.  II investors are very focused on impact measurement and do expect a competitive market-based return on their money, with the social impact coming on top.

“Venture Philanthropy” (VP) has been with us for much longer, arguably since its introduction by John D. Rockefeller in 1969 as “an adventurous approach to funding unpopular social causes”.  Here investors also apply capitalistic methods to philanthropic pursuits, but in a way that is far closer to the grant-giving side of the spectrum (see below).  Rather than investing with impact (or even, as some analysts say “alongside”, as in II, VP invests for impact.  Grantees are not necessarily expected to generate profits or even revenues.  The focus is more narrowly on social causes.

VP also measures impact, but in my view in a more imaginative way.  With a typical engagement window of 3 to 7 years, they truly seek to mentor their grantees, forgoing short-term returns for long-term success.  This kind of grounding helps to mitigate the whims of donors, so much a problem in the traditional grant-giving world while also transcending the ROI focus of II.  It is all about relationship and social impact, while still marshaling the skills of capitalism in a true spirit of social entrepreneurship.

All of this leads me to feel that Rational Games is more in tune with this kind of philanthropy than with II.  Specifically:

  1. A cooperation would work with nonprofits and projects (even our own) without a revenue stream or prospect for equity

  2. The focus is more on social projects, so overlaps well with RGI and allows for better targeting

  3. Like RGI, VP funders are interested in more than financial support, so seek a higher level of engagement with grantees on things like capacity building, business planning, joint fundraising. We share that worldview.

This is work in progress but we will definitely following up.  Comments and feedback welcome, especially leads from the VP world.


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