New Vehicles for Philanthropy: Three Considerations

Three new publications by Ofer Eldar (Duke), Dana Brakman Reiser & Steven Dean (Brooklyn), and Rasheda L. Weaver (Rutgers) highlight the myriad of possible forms for pursuing philanthropy currently, as well as their pros and cons. Here are summaries:

• Are Enterprise Foundations Possible in the United States? (Eldar): "This book chapter discusses the ability of entrepreneurs to form enterprise foundations in the US and the hurdles for forming them. The US regime for tax-exempt private foundations is very restrictive and does not practically allow them to have substantial ownership of for-profit firms. As a result, there is a perception that enterprise foundations are not feasible in the US. However, enterprise foundations, broadly defined as industrial firms controlled by any nonprofit firm, need not involve ownership by a private foundation (as it is defined in the US Tax Code) and could also be owned by other types of nonprofits. Such enterprise foundations are unlikely to benefit from key tax exemptions (such as tax-deductible donations or income tax exemptions), which probably explains their unpopularity. The chapter evaluates recent developments to liberalize the law of enterprise foundations, including (1) the "Newman's Own" exception that permits private foundations to own business firms under certain restrictive conditions, and (2) the perpetual purpose trust, which was recently utilized to transfer the ownership of Patagonia from the founder to a trust and a non-exempt nonprofit."

• For-Profit Philanthropy: Elite Power and the Threat of Limited Liability Companies, Donor-Advised Funds, and Strategic Corporate Giving (Reiser & Dean): "This book exposes a migration of business practices, players, and norms into philanthropy that strains the regulatory regime sustaining public trust in elite generosity through accountability and transparency and proposes legal reforms and private solutions to restore it."

• Social Entrepreneurship: A Practical Introduction (Weaver): "[This book] equips aspiring entrepreneurs with the tools needed to design and launch businesses to create positive social change in their communities. This accessible textbook aims to educate and motivate people interested in social entrepreneurship, showing that such businesses are a valuable part of the community development toolbox. Each chapter focuses on a key aspect of social entrepreneurship, from value creation and business planning to impact measurement and scaling up. Different social business models are presented, with analysis of their strengths and weaknesses. Cases and examples are included throughout the book and showcase real-life social enterprises in North America, South America, Europe, Australia, Africa, and the Caribbean. Discussion questions also support reflection and learning. A downloadable workbook offers support with checklists, social impact measurement, and other areas. An instructor manual containing test questions and experiential exercises is also available as a digital supplement for adopters. This book is ideal for introductory courses in social entrepreneurship and community development. It will also be valuable for those involved in social enterprises on the ground."

Lloyd Mayer