Funders Aren’t Investors, They’re Purchasers (July 18, 2011) | Opinion Blog | Stanford Social Innovation Review

Funders Aren’t Investors, They’re Purchasers (July 18, 2011) | Opinion Blog | Stanford Social Innovation Review: "Over the last two decades, nonprofit funders have increasingly come to view themselves as “investors” or “venture funders” of the nonprofit organizations they fund. A recent article found that, “Among the Web sites of the 100 largest U.S. foundations, for example, 77 tout that they are involved in some type of ‘investment,’ ‘leverage,’ or ‘venture activity.’” But is it accurate or even appropriate for funders to think of themselves as, and act like, investors?

Ownership of assets and taking on management and ownership roles are the hallmark characteristics of for-profit investors. Yet by law, nonprofit funders are prohibited from taking financial stakes in the assets or revenues of the nonprofits they fund. Additionally, funders rarely demand board seats or voting rights in exchange for funding."