The ‘boomerang effect’: How strategic philanthropy pays a purpose premium

The Boomerang Effect: Strategic Philanthropy Pays a Purpose Premium

Beyond the balance sheet, the act of giving generates a unique dividend for the investor.

In the conventional ledger of philanthropy, the accounts appear straightforward: capital flows in one direction. Donors, whether individuals or institutions, allocate financial or human resources to a chosen cause. The return on investment is tallied in social good: lives improved, ecosystems preserved, knowledge advanced.

Any benefit to the giver is typically recorded as reputational enhancement or moral satisfaction. However, this model is incomplete, as it overlooks a fascinating and powerful anomaly observed in the micro-dynamics of fundraising, particularly for causes with significant social externalities.

The return on investment is tallied in social good: lives improved, ecosystems preserved, knowledge advanced.

Author's summary: Strategic philanthropy generates unique dividends.

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The Business Times The Business Times — 2025-10-25

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