Although early-stage finance is critical to the growth of most ventures, it is even more important for social ventures as they face the challenges of balancing their social and commercial objectives. Drawing on institutional logics and signaling theory, this study uses a panel data set of 3,401 nascent social ventures to investigate the important role philanthropic grant funding plays in the organizational and financial development of social ventures. We find mixed results, with positive effects on employment and subsequent access to debt finance, but no effects on revenues and access to equity. Our findings connect these theories by suggesting philanthropic grants provide social ventures with flexibility to invest in human capital without pushing them to pursue short-term financial objectives, and that receiving a philanthropic grant provides a signal that is interpreted differently by debt and equity financiers. These findings are especially relevant as funders increasingly use grants to support social entrepreneurship.

Despite the heightened attention to climate change and sustainable development initiatives by governments, civil society groups, and private companies in the USA and worldwide, the international community is confronted with a question that has existed since the 1992 Earth Summit: how can we pay for it all? To better understand this climate change and sustainable development goals (SDGs) funding dilemma, there needs to be greater clarity around four climate change investment and finance-related questions that are frequently absent or inadequately addressed in the academic and policy literature. Firstly, what are or should be the boundaries of climate change investment and finance when the problem of climate change becomes impossible to separate from biodiversity, land use management, and other dilemmas related to the broader SDGs? Secondly, how we should define and what constitutes “adequate” financial resources to address the climate change and SDGs dilemmas on the global level? Thirdly, why is it important to close the gap between climate change adaptation and mitigation funding levels? Finally, what role should the private sector and business actors play in terms of climate change investment and finance issues? In addition to achieving greater clarity around these four issue areas, I argue in this article that three questions are likely to shape the future success (or failure) of the global climate change investment and finance architecture. One, what is likely path of the United Nations as a global climate change/sustainability governance institution? Two, will the emerging Green New Deal model in the USA and in other countries actually materialize? Three, what is the future outlook for “market-fixing” sustainability-driven enterprises?

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