Understanding Human-Capital Philanthropy

October 1, 2015

Almost all grants support human beings. But only some concentrate on cultivating human excellence. Five factors, drawn from The Atlantic Philanthropies' work in Viet Nam, seem to define this important form of grantmaking.

 

Ask a casual observer of philanthropy about foundations that seek out exceptional people and support their talent, and the programs most likely to come up would be the MacArthur Fellowships (a/k/a “genius grants”) or the Gugenheim Memorial Fellowships in the arts, or, among health buffs, one of the Robert Wood Johnson Foundation’s distinguished scholarship programs. All of these (and there are many dozens of others) are meant primarily for recognizing or cultivating gifted individuals, and perhaps improving the depth or diversity or vitality of their fields.

   In various ways — not always with much clarity of definition — these kinds of programs are often lumped into a broad category of “human capital” philanthropy. And for all their many differences, they certainly share an interest in developing human talent, whether for creativity, leadership, or some form of professional mastery. But wait — don’t all foundation grants, or nearly all, cultivate human talent, at least as a means to some other end, and often as an end in itself?

   Why would you give money to the ballet or orchestra unless you wanted to promote the talent of its artists and mangers? Why give money to a research institute unless you believe in and want to provide for its leading scholars or scientists? Even funding toilets in the developing world is, at its heart, less an investment in plumbing than in the people who design, produce, and deliver the technology.

   So is there a kind of philanthropy that is distinctly and specifically “human capital” in nature? If so, it would presumably focus not only on talented people, but also on fields where talent or leadership is under-supplied. In other words, the focus would be squarely on cultivating more people with skill and vision. I think The Atlantic Philanthropies has demonstrated this kind of program in its work on health in Viet Nam, which concluded in 2013. I’ve reflected on what Atlantic did, and what made it a distinctly “human capital” approach, in a new paper that’s available here.

   In Atlantic’s model of human-capital grantmaking, which is as complete as any I’ve seen, there are five interwoven elements: educating people in the field directly, investing in educational and training institutions, backing visionary educators, networking leaders and innovators, and underwriting projects that help innovators make a mark. Together, these five compose an ecology of talent and leadership development, in which the parts nourish each other and produce a fertile whole.

   Any one of the elements would be a good grantmaking program by itself — but it would be, like other good programs, aimed either at producing something valuable (like a new ballet or better sanitation) or at rewarding geniuses, like … well, like genius grants. Those are all excellent goals, but I argue they are not the same as developing human capital — i.e., investing directly in the training and education of leaders and workforces in such a way that they generate multiples of talent, or (in the admittedly overworked language of finance) produce a sizable return, in the form of more and more gifted, trained, and influential people across the field.

   I think Atlantic’s Viet Nam effort constituted human capital philanthropy in the purest sense. But I welcome a discussion on this subject, about which I think too little has been written. This piece is offered as a way of getting the discussion under way.

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Tony Proscio

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Rip Rapson
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