Charity vs. Investing Is the Wrong Question

The more interesting question is: what if capital could do both at the same time—without compromising either?That’s the tension at the center of my recent conversation with John Parker, a pediatric-focused investor working at the intersection of philanthropy, venture capital, and measurable outcomes. John operates through the Charles Hood Foundation, an 84-year-old family foundation that supports pediatric research—and, unusually, also runs an internal venture fund.What makes John’s approach compelling isn’t just what he invests in, but how he thinks about capital itself.Investing for outcomes, not just returnsJohn backs companies improving health outcomes for children—from birth through adolescence—across drugs, devices, and digital health. This isn’t charity in the traditional sense, and it’s not venture capital as most people know it either.Instead of asking, “Will this maximize returns?” the primary question becomes:“Will this measurably improve outcomes—and can it still be sustainable?”That framing unlocks a very different risk posture. As John puts it, foundations already know how to lose money—they give it away every year. That creates room to experiment, to invest earlier, and to back ideas that might otherwise struggle to get funded.The surprising part? Many of these investments do work financially—sometimes very well.Pediatric care: overlooked, not smallThere’s a persistent myth that pediatric healthcare is a “small market.” John challenges that head-on.Children represent roughly 25% of the population. Parents will move mountains to get their kids care. And when you think in terms of lifetime impact, investing earlier produces outsized returns—socially and economically—even if the system hasn’t historically priced that value correctly.That mismatch creates opportunity.John’s portfolio reflects this: early-stage pediatric companies, patient capital, smaller trials, faster regulatory pathways, and technologies that often expand into adult indications later.Recycling philanthropic capitalOne of the most powerful ideas we discussed is recyclable philanthropy.Using IRS program-related investment (PRI) rules, foundations can deploy charitable dollars into for-profit companies without violating their mission. The intent isn’t to make money—but if capital comes back, it can be redeployed again and again.That turns a one-time grant into a flywheel.Even getting principal back is a win. A home run exit is transformative.Donor-advised funds: capital hiding in plain sightThis is where the conversation gets especially interesting.There are hundreds of billions of dollars sitting in donor-advised funds—money that’s already been given a tax deduction, but often sits idle in index funds or money markets for years.What if some of that capital could be put to work now—invested into outcome-driven companies aligned with donors’ values?John has already done this. In his for-profit fund, traditional LPs and donor-advised funds invest side by side. Same vehicle. Same companies. Different motivations.For donors, it’s a way to move beyond writing checks and toward actively shaping impact—while still preserving optionality.The real takeawayThis isn’t about choosing between profit and purpose.It’s about expanding the toolkit.Whether you’re an investor, advisor, founder, or someone sitting on a donor-advised fund wondering what to do next, the lines between philanthropy and investing are becoming more porous—and more interesting.And in pediatric care especially, that shift couldn’t matter more.If capital is going to shape the future, we should be deliberate about where it starts. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit franckcushner.substack.com