As I walked out of the conference room with a handful of annual reports from some of the largest Latin American-based microfinance institutions, I muttered to my partners in disbelief, “These numbers can’t be real.” It was the fall of 2004. I had spent 20 years traveling the globe with investors, had sat in hundreds of meetings with management from leading international banks, and was pretty sure that there was no such thing as a financial institution with these types of ratios. I was wrong. These financial institutions, which lent to poor women in emerging markets to start their own businesses, were a damn good investment. Period. I first became aware of microfinance in the early 1990s while in discussions with several South African banks, which following apartheid were doing a strategic review of potential new customers, including microfinance borrowers. I had left a two-decade career on Wall Street to join Developing World Markets, a boutique investment firm that was in the process of structuring what would become the first cross-border capital markets transaction for microfinance. Eventually, the transaction would serve as the model that brought billions of dollars into the field. Although I knew the basics of microfinance, back…
Read more...

Many of us have a mental picture of nonprofits and philanthropy as one of three circles in a Venn diagram, the other two being government and commercial enterprise. The circles overlap in the center, but each sector also has its own functions. Yet many contemporary observers have commented on the blurring of these sectors. Nonprofits earn revenue, companies produce environmentally beneficial products, and the government invests in social innovation. We have commercial vendors of charitable giving products, nonprofit producers of some of the world’s most widely used software products, and networks of mobile phone crisis responders who don’t fit into any circle. The creation of new corporate forms for good and the impact investing movement have become standard parts of philanthropy conferences. And the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission has unleashed a new era of nonprofit activity in campaign politics. Although all of these examples are contemporary, none of them is fully new. Olivier Zunz’s book, Philanthropy in America: A History, tells a 100-year story of how we got to where we are today, focusing on the political choices we’ve made to shape nonprofit organizations and philanthropic foundations. Zunz braids together the tales of…
Read more...