Why Liquidnet Doesn't Believe in Corporate Philanthropy

When the bank robber Willie Sutton was asked why he robbed banks, he said “because that’s where the money is.”

Today, many of the world’s most valuable assets – talented employees, cutting-edge technology, and complex management capabilities – are concentrated in the world’s leading companies. And the large-scale challenges we face – from climate change to rising economic inequality – require not just leadership from governments and engagement from NGOs, but increasingly resources only found in the private sector. Leading companies recognize they need to do their part, but many struggle to do so effectively.

Before setting out to solve social or environmental challenges, companies ought to first ensure they aren’t causing or exacerbating them. Companies should first make sure that they do right by their customers, treat their workers well, contribute their fair share to the places where they operate, and reduce their environmental impact. Optimizing a company’s positive externalities starts with minimizing its negative externalities – doing more good begins with doing less harm.

Corporate philanthropy programs are well-meaning and no doubt do some good, but the resources they typically marshal pale in the face of today’s challenges. While laudable, “checkbook philanthropy” and unsophisticated employee volunteer efforts only scratch the surface of a company’s capabilities.

Companies serious about solving problems need to go beyond this outdated model of corporate philanthropy. Instead, they should creatively apply their full range of assets - human capital, technology, data, intellectual property, supply chains, distribution networks, creative capital – to have the kind of positive impact only they can deliver. After all, companies are uniquely positioned to activate the resources commensurate to the challenges we face.  

Liquidnet’s two greatest assets are the ingenuity of our employees and the innovation of our capital markets technology. Through Liquidnet for Good, we connect employees to opportunities to apply their talents to make a meaningful impact. But we don’t stop there. We also partner with some of the world’s leading foundations, impact investors, and academic institutions to increase the practice of impact investing and improve the effectiveness of philanthropy. By leveraging our core capabilities – a deep understanding of technology and the capital markets – we’re working to mobilize more private capital for public good. We’re doing our part to accelerate sustainable global growth and inclusive prosperity.

So while we, at Liquidnet, don’t believe in traditional corporate philanthropy, we absolutely believe in the unparalleled potential for companies to have an enormous positive impact – the kind of impact today’s greatest challenges require.

Brian Walsh, Head of Impact, Liquidnet