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Where can philanthropy make a difference in STEM education?

Posted by Francis Vigeant on May 5, 2015

It's probably not news to you that private foundations, corporations, and individual trusts are excited to provide for K-12 STEM education, a sector that consumes over 16 billion dollars per year before the contributions of philanthropists.

With all these resources, why do classrooms in the United States continue to struggle with STEM?

Money isn't everything. It's only part of the trinity of change in education: vision, leadership, and resources. The gains seen by adding financial resources alone can have the unintended result of feeding the development of organizations and purchase of resources that are neither unique nor valuable from the perspective of student learning and teacher support.

Bill Gates
Bill Gates, a well-known philanthropist, supports STEM education through his foundation's charitable initiatives.

The most effective STEM philanthropists approach STEM education as a series of problems to be solved and invest primarily in leadership and vision with a new perspective of the problems. 

Philanthropy's well-traveled path to STEM education

Historically, philanthropy’s investments in STEM education have focused on a few tried-and-true avenues with varying levels of success. Non-profits are the most common recipients of STEM philanthropy, ranging from small volunteer efforts like an afterschool robotics club to some of the world's largest multi-national NGOs. However, many large STEM non-profits like museums have high overhead with a range of spending, including the salaries of full-time fundraisers and well compensated leadership

But more and more STEM philanthropists are realizing that great innovations in STEM education can happen anywhere and are striking out to grow the reach of the hungrier and more flexible small non-profits and for-profit social ventures. This is where philanthropy truly becomes capital for community development and social change

Philanthropy's less traveled path: [for-profit] social ventures

STEM philanthropists can get a lot of bang for their buck by foregoing the overhead of landmark institutions to leverage the passion and performance of for-profit social ventures and small non-profits. No doubt there will always be a lot of ideas labeled "innovations" – a new smile on the same old product, or a tool that solves a problem that never existed in the first place – but revolutionary innovations are out there ready to scale.

Social ventures are for-profit organizations whose only source of revenue comes from their users, who sustain the organization through purchases. This differs significantly from non-profits, which can grow almost infinitely on grants and fundraising efforts apart from those who actually use their services. Some argue this is why rapid innovation is more common among for-profits than non-profits.

Working with social ventures is a new frontier for STEM philanthropists, who are being led by some of the world's preeminent STEM innovators. Consider that program-related investments, co-development, seed grants, and licensing arrangements are legal uses of many STEM foundations' tax-exempt funds, but ones that few philanthropists have ever considered. 

Does this mean philanthropy would be helping grow a for-profit company? Perhaps, but you'd be treading where traditional retail banks, angel inventors, and venture capitalists lose interest because of long sales cycles and a lack of comparable investments. Social ventures in STEM education don't grow the way other for-profit ventures grow, but with the right solution, they can become massive. Philanthropists who take an interest in a social venture can rest assured that growth is a sign of real problems being solved, and real need being addressed. After all, isn't that the goal of philanthropy?

Partner to transform STEM education

Like small non-profits, for-profit social ventures in STEM education have to make up for a lack of access to donations and financing with a super dose of talent and efficiency, vision, and leadership. When philanthropists want to think about local services, they should consider exploring small non-profits, but if they want tools to solve national or international STEM challenges they should explore partnering with a for-profit social venture or combining the two. Each approach will best match resources with vision and leadership for improving STEM education.

If you're looking to make a long-term difference through philanthropy, evaluate your strengths and leverage your resources with the abundance of vision and leadership found in small non-profits and for-profit social ventures. In the case of social ventures, you'll have an opportunity to develop solutions to complex problems for STEM education that meet a real need and have long-tem sustainability through communities' willingness to pay for them. 

It might take questioning what you value most and a great deal of thinking differently, but as a philanthropist you'll be an innovator too, one of the few poised to transform an industry and the expectations of STEM educators everywhere... a legacy that's priceless and infinitely rewarding.

Topics: STEM, philanthropy

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