Building a Model for Culturally Responsible Investment

hroughout the 1990s, internal and external environmental shifts were affecting the cultural sector. The nonprofit arts were being challenged by an increasing awareness of the need to diversify traditional revenue streams. In addition, arts organizations were experiencing real and enduring shifts in available resources, as well as rising resistance to the view of the cultural sector as deserving and comfortable in its reliance on donated assets (foundation grants, corporate giving and individual philanthropy) for ongoing operations. A look beyond the nonprofit arts reveals an economy increasingly driven by capital investment, revenue generation, and income. In the latter part of the 1990s, the New York Stock Exchange repeatedly shattered trading records. New technology and biomedical industries erupted with force, creating new wealth and a more involved and informed populace. As the “new philanthropists” created by this boom began to scrutinize the impact of their financial support and involvement, talk began to focus on venture philanthropy and socially conscious investing. Venture philanthropy would combine business approaches with grant making, and socially conscious investing would put traditional investment options through social filters. Both ideas have received wide coverage, but neither matured before the investing markets changed and “new wealth” diminished.