A great observation

Kudos to my blogging colleague at Philanthropy 2173 for her observation–okay, a month old, I was getting to it!–that philanthropies have gone from deluding themselves that they’re the research and development arm of government social policy to offering themselves as the R & D branch of the free market.  The happy notion that nonprofits would invent and governments execute ideas for social change proved precisely contrafactual: instead, tax-phobic politicians used the existence of charities as a basis for arguing that there was no need for government attention to health care or education or environmental preservation because "the private sector" could do it. 

But not satisfied with pretending that we could have something for nothing, some titans of business have now decided to pretend that we can have that same something–solutions to social problems–for profit.  (See Eric Posner and Anup Malani’s working paper attempting to make a case for for-profit charities, which somehow can never resolve the obvious problem that profits are by definition monies diverted from the object of charity.)  Admittedly, this has been known to happen: Ireland today experiences peace and prosperity because corporations could profit by locating in a place with well-educated white workers.  But social progress is a by-product of capitalism, not its purpose, and few social problems have an immediate payoff for their solution.

So should organized philanthropy leap into the breach and subsidize capitalists’ search for that immediate payoff?  Only if it wants to replace its previous motto "Let George do it" (when George wouldn’t) with "Fool me once, shame on you, fool me twice . . . ".

Besides, charities can’t serve as laboratories for anything.  The main product of any laboratory is failure–and, as the current craze for evaluation demonstrates, most donors will tolerate nothing less than triumph.  Perhaps the charitable sector does have something to learn from business, after all–that the only way to generate return is to run risk.

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3 Responses to “A great observation”

  1. Robert Tolmach Says:

    Bravo for your observation:

    “Perhaps the charitable sector does have something to learn from business, after all–that the only way to generate return is to run risk.”

    keep up the good work,
    Robert Tolmach

  2. Lucy Bernholz Says:

    Thanks for the note. I’m glad someone too me up on this – otherwise this got almost no response and I think its one of the most important trends happening.

  3. Nonprofiteer Says:

    Happily, Phil Cubeta at Gift Hub is also fighting the good fight against what passes for analysis among the charity-for-profit crowd.

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