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Capital Providers


The role of capital providers in creating a vital Fourth Sector is critical. Their options to contribute include:

  • Giving preferential treatment to social enterprises, and even more favorable treatment to social enterprises with more For-Benefit attributes. As successful strategies are identified, funders can begin to require specific aspects, or even the full set of those strategies from all their grant recipients. This may require a significant shift in thinking for many funders, since the accountability of projects will focus on honoring the principles of operation and delivering results that fully satisfy stakeholders, rather than delivering prescribed outcomes which may or may not meet real needs.

  • Offer new products such as shared equity investments and inter-generational sustainability bonds.

  • Launch hybrid investment funds that target social enterprises.

  • Develop program-related investment (PRI) strategies that provide needed capital for For-Benefit startups, but whose structure is such that they may be liquidated in other capital markets as the enterprise grows. This might create the boost For-Benefits need to be able to prove their models, while yielding capital growth to the funder over time.


A fully-realized Fourth Sector will, in turn, deliver significant benefits to funders and foundations. It will do so by helping secure the financial stability of grantees, increasing the flow of money into the social capital market, fostering cross-sectoral collaboration around social and environmental problems, making it possible for more and more social issues to find market-based solutions, and advancing systemic solutions to social and environmental issues.

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