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Our social entrepreneurs and all its supporters are obsessed with something called scale. The fetishization of scaling up our work is a source of both anxiety and hope. Bringing a new innovative project to scale often feels like the only way to leave a footprint of a good kind in an afflicted world in need of good ideas... What’s been shocking to me over the past 25 years is the lightning speed at which policy makers, themselves shielded from the risks [that the poor face], decide that a complex intervention is too difficult or not cost-effective in Haiti or Africa, or not sustainable. In micro-finance parlance, many of my patients are “poor credit risks.” But aren’t they the very people we claim to serve in the first place?

Read more excerpts from Paul Farmer's closing plenary >>

The average major U.S. corporation maximizes profits as its primary goal, while paying more limited attention to social and environmental consequences. It attempts to minimize wages and the costs of material services, and does not prioritize a minimal carbon footprint and other measures of sustainability. Then, the company and its executives donate a tiny percentage of their profits to try to fix the social and environmental problems to which their business practices contribute. In the process, these donors receive sizable tax write-offs that impoverish public social and environmental programs. And most philanthropic foundations are endowed by and invest their assets in these same companies, which create the very problems the foundations address.

Undoubtedly, most philanthropists mean to make the world a cleaner and more equitable place. Yet it’s like trying to reduce your sugar intake by eating 125 chocolate bars every day and then swearing off the occasional Pop-Tart. It’s as if the right hand has never met the left. But here is the punch line for this argument: We can all be good citizens much, much more effectively in the course of making money than in the course of giving money away.

Continue reading "Against Philanthropy: The business of giving is doing more harm than good" >>

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” for short, its supporters believe that business principles can be successfully combined with the search for social transformation.

There is no doubt that this is an important phenomenon. Very large sums of money have been generated for philanthropy, particularly in the finance and IT industries. But despite its great potential, this movement is flawed in both its proposed means and its promised ends. It 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.

Business will continue to be an inescapable part of the solution to global problems, and some methods drawn from business certainly have much to offer. But business will also be a cause of social problems, and as Jim Collins, author of “Good to Great,” concluded in a recent pamphlet, “we must reject the idea—well intentioned, but dead wrong—that the primary path to greatness in the social sectors is to become more like a business.”

Philanthrocapitalism’s other promise is to achieve far reaching transformation by resolving entrenched social problems. Yet its lack of understanding of how change occurs makes it unlikely that this promise will be achieved. There is a huge gulf between the hype surrounding this new philanthropy and its likely impact. Some of the newer philanthropists have come to recognize this—and have shown both humility and a readiness to learn about the complexities of social change. But too many remain captivated by the hype.

Download Just another Emperor? The Myths and Realities of Philanthrocapitalism >>