The idiocy continues. More media reports and public pronouncements on philanthropy that equate the push for effectiveness and impact with the adoption of business or “Wall Street” practices. The latest, from Reuters this week, is headlined “Charities Mimic Wall Street to Woo Wealthy Donors.” Which aspects of Wall Street, exactly, it doesn’t say, but the implication is that it is the positive ones – not the ones that contributed to the economic downturn that we are currently experiencing, prompting the new financial regulatory reform bill.
Like so many others that I have blogged about (and this recent, even more ludicrous article from the Financial Times that suggests that MBAs will save philanthropic foundations from themselves), the Reuters article insinuates that nonprofits just woke up to the idea that they should try to be effective and implies that an impact orientation is a business concept. But, of course, neither of these points is accurate. (I know three of the four people quoted in the article and have great respect for them: I suspect they would agree with my take and that the lack of context and understanding in this piece made them wince, too.)
Wait, there is more.
Also this week, Facebook Founder Mark Zuckerberg weighs in with yet another business-to-the-rescue argument. “I think building a company is the best way to change the world, because it’s the best way to align the interests of a lot of smart people and a lot of partners to build something that’s great and that serves people,” Mr. Zuckerberg said in an interview on the blog Inside Facebook. “You can’t do that if you’re an individual because it’s just you and there’s no one to align, and you can’t do it if you’re a nonprofit because you have no resources and you’re constantly out trying to raise money instead of generating it and being self-sufficient.”
Zuckerberg went to Harvard University, which, in case he forgot, is a nonprofit organization with an endowment of roughly $30 billion. (Does that qualify as “resources?”) I don’t know about Zuckerberg, but I am pretty grateful for the fact that the educational institutions I attended were nonprofits, because they were able to provide me the financial aid that allowed me to attend them. These institutions, thanks to their “nonprofitness,” delivered an education to me for less than it cost them, rather than focusing on how to turn me into a profit margin that could then be returned to shareholders. Might not have changed the world, but it sure changed my life.
Let me be clear. I love entrepreneurialism and capitalism. I have an MBA and have worked in both the corporate world and the nonprofit sector. But let’s get beyond the “sector wars.” Neither business, government, nor the nonprofit sector can succeed without the other sectors playing their distinctive roles. And none, today, is as effective as it needs to be.
Phil Buchanan is President of CEP.