Q: Matt Flannery, founder of online micro-venture Kiva, asks: "Venture Capitalists are quick to respond to market trends. Foundations aren't. Why?"

Patrick O'Heffernan responds:

Several reasons -from my experience, having to do with psychology and practicality. Foundation staff are public sector, non market-oriented people, by and large and as a rule have little training or interest in market trends. In some cases, I have met foundation staff who are antagonistic to market research, market trends and the whole concept of "markets".

However, I think a more immediate reason is that non profits, especially those that provide services to the poor, are simply not part of market trends, or even of markets. What they do has little impact on and is little impacted by market forces or trends. People are hungry, abused, jailed, kidnapped, raped or killed regardless of what is hot on Wall Street or Silicon Valley. It is simply not important to NPOs and NGOs and therefore, to the foundations.

This is not always or entirely the case, however. As a new generation of wealth emerges and a new generation of foundation staff and executive takes over, charity is shifting the social entrepreneurship, which does follow market trends. The rise of microcredit funding micro-industry for long-term development, as opposed to short-term relief, makes market trends more important in some areas.

However, since much of the NPO/NGO sector and their supporting foundations work in developing countries, market trends in the affluent world - which is where a lot of the available data is - are not always important. This is not to say that foundations should be funding projects that allow developing country farmers to use the internet to better engage in marketing to customers in the developed world, and similar projects which do track market trends.