Zürich

Is the world of foundations facing a paradigm shift? Entrepreneurial forms of support are being widely discussed. Impact investments are already an option for foundations on the investment side. The change in practice regarding tax exemption in the canton of Zurich now opens up the funding side for impact investments. In addition to investments, interest-bearing loans or convertible bonds are now also possible, with part of the money flowing back into the foundation's assets in the form of interest, income or profit-sharing. This dual approach has the potential to significantly increase the impact of philanthropic efforts. Proponents argue that entrepreneurial philanthropy is a more effective way of tackling poverty in the global South. The Indian start-up Oorja, which uses solar energy to improve the living conditions of farmers, is an impressive example of how economic success and social benefit can go hand in hand. However, as promising as the approach may be, it also raises questions. Can the foundations retain their independence with the increasing influence of market economy principles? Those who take up the challenge and expand traditional funding models with entrepreneurial approaches must define precise goals and then measure the impact achieved. Transparency is key to maintaining credibility. In this issue of The Philanthropist, we put the spotlight on impact investing. Because there is no question that it is giving new impetus to the foundation landscape. Those who ignore the trend towards entrepreneurial funding risk being left behind. However, the balance between financial profitability and social responsibility is challenging and crucial if the common good is to remain at the center of attention. Challenge accepted? Then let's head for break-even!