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A significant portion of philanthropic resources are spent addressing issues that are downstream consequences of unsustainable business practices. Ironically, all philanthropic resources originate as byproducts of business activity, making the relationship between business and philanthropy a vicious cycle.

The urgency and complexity of the social, environmental and economic challenges we face calls for systemic solutions, not just incremental, fragmented interventions that provide symptom relief. Philanthropy has a historic opportunity to help reshape the way markets function by supporting the formalization and growth of the fourth sector.

Key strategic actions by philanthropy are needed to develop a strong and cohesive supportive ecosystem for purpose-driven enterprises, to unleash the power of markets to solve our most pressing social and environmental challenges at scale.

Specific actions that philanthropists can take to enhance the space for the fourth sector and advance societal and environmental benefit include:

1.  Establish pooled philanthropic investments to catalyze supportive ecosystem development for the fourth sector.

2.  Evaluate investing strategies through a for-benefit lens.

3.  Support fourth sector research and policy initiatives to increase understanding of the sector.

4.  Encourage and support current grantees to explore and learn about for-benefit approaches and fourth sector thinking.

5.  Accelerate learning through sponsoring workshops, media campaigns, and related initiatives.

6.  De-risk investments in for-benefit enterprises.

7.  Support the development of the infrastructure for the fourth sector through capacity building and training, technical assistance, among others.

8.  Fund incubators and accelerators for the fourth sector and create challenges, grants and programmes to support for-benefit enterprises.

9.  Only through greater coordination, cooperation, and strategic action from different spheres will we be able to match the urgency of the need with the pace and scale of response that the challenges demands.


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