Yep. Acquiring capital without selfish profit motive is a key challenge.
However, if there is an environment in which PFGs enjoy a large advantage and this is clear to the relevant parties, there should be no problem raising funds through philanthropists and debt.
You can frame it as
F(C) = F(K) +P
F(C) is a firm capitalized mostly by charitable equity
F(K) is an identical firm capitalized by private equity
P is the monetary value of positive discrimination in favor of charities
If we have an environment in which P is high enough (I think this could be true in a lot of lower differentiation products), a PFG could probably be capitalized wholly by debt...
If PFGs offer a high enough value proposition (and this is clear to the relevant parties), the financing issues will work themselves out.
Thus, the question is, are the costs of creating the environment we’re looking for worth it? I think with the amount of money on the table, it is definitely worth determining what P values are possible in different contexts because money in the hands of effective charities is such high impact.
Yep. Acquiring capital without selfish profit motive is a key challenge.
However, if there is an environment in which PFGs enjoy a large advantage and this is clear to the relevant parties, there should be no problem raising funds through philanthropists and debt.
You can frame it as
F(C) = F(K) +P
F(C) is a firm capitalized mostly by charitable equity
F(K) is an identical firm capitalized by private equity
P is the monetary value of positive discrimination in favor of charities
If we have an environment in which P is high enough (I think this could be true in a lot of lower differentiation products), a PFG could probably be capitalized wholly by debt...
If PFGs offer a high enough value proposition (and this is clear to the relevant parties), the financing issues will work themselves out.
Thus, the question is, are the costs of creating the environment we’re looking for worth it? I think with the amount of money on the table, it is definitely worth determining what P values are possible in different contexts because money in the hands of effective charities is such high impact.