Thursday, May 29, 2008

Philanthrocapitalism to the Rescue?

"A new movement is afoot that promises to save the world by revolutionizing philanthropy, making non-profit organizations operate like business,and creating new markets for goods and services that benefit society. Nick-named "philanthrocapitalism,"...[i]t sees business methods as the answer to social problems, but offers little rigorous evidence or analysis to support this claim, and ignores strong evidence pointing in the opposite direction."

"Could it be that civil society can achieve more of an impact on capitalism by strengthening its distinctive roles and values than by "blending" them in business."

Michael Edwards, Just Another Emperor? The Myths and Realities of Philanthrocapitalism

So,what is philanthrocapitalism? I first thought this name or label was a joke, the first salvo of a broadside against venture philanthropy,corporate social responsibility,and social enterprise. But, to my surprise, it was invented by a supporter, not Edwards. But Edwards lumps anybody who uses too much business jargon, such as high performance,results-based, or data-driven as a part of the same crowd.

The basic argument is that philanthrocapitalism is not all that its cracked up to be in terms impact and social transformation -- despite the hype of venture philanthopy evangelicals. In fact, it can do real harm in diverting resources and narrowing civil society and non-profit initiatives. Markets are sometimes a part of the problem; social change is not reducible to "blended value;" and there is meager rigorous evidence to support the transformative powers of philanthrocapitalism.

On the other hand, most charitable giving is from individuals and their volunteerism; many social changes have occurred because of social movements; and the role of the public sector and civil society have been key to promoting economic growth and the spreading of its benefits.

Every once in a while Edwards pulls back and says that social entrepreneurs are okay and have even done some good. But, as a good philanthropist, he wants them to be part of a broader "conversation."

Popping the balloon of philanthrocapitalism is long overdue and we owe Michael Edwards a debt of gratitude. He also lifts up the key role of civil society and citizen organizations in making transformative change.

My problem with the book and argument has a couple of parts. First, he gives the non-profit sector a pass, citing a few "worthy" organizations, writing off talk of performance and data, and ignoring a lot of low performance. Rather than just argue that more money should go to social justice organizations (a good idea), maybe some of this philanthrocapital money and expertise should go to improving the non-profit sector. In fact, it has, but this gets almost no attention. The best of this assistance isn't making non-profits operate like businesses -- but helping them operate better.

Second, you would think that economic growth had nothing to do with solving social problems in the US or abroad. We can argue the preconditions for growth and the role of the public and civil society sectors, but doesn't growth make things better, even with all its warts and externalities? I think so.

I conclude Nonprofit Leadership with a chapter that reflects on my daydreaming about the Mondragon Cooperative and community economic development over several decades. Edwards occasional mention of coops and worker ownership makes me wonder if his book had one more argument to make. I'm a skeptic about this "third sector" argument who still wants to believe.

No comments: