Should Philanthropies Operate Like Businesses?

On Monday the Wall Street Journal published a special section on Philanthropy.  The cover story was Should Philanthropies Operate Like Businesses?  One article argued "yes" while the other argued "no."  Both articles left me dissatisfied. 

Bronfman and Solomon, authors of "The Art of Giving: Where the Soul Meets a Business Plan," argue that, like business investors, donors should expect specific goals and measurable outcomes from the non-profits they support.  I completely agree this is smart business, but they fail to comment on many other critical aspects of what is smart business leaving the reader to think that having a plan, collecting data, measuring results, and striving to improve is all it takes to be a well run business.

Edwards, author of "Small Change: Why Business Won't Save the World," argues "social change is.. messy, unpredictable, politicized and subject to conflicts of interest and interpretation."  Business oriented philanthropy threatens "the capacity to do whatever it takes to reach your goal and the freedom to use it creatively."  In business terms, he is saying non-profits need to be able to innovate.  He is actually supporting what is also smart business.

The real hero of the section is an interview with Tierney, author of "The Donor Guarantee Trap," who discusses the importance of overhead for non-profits.  "Without the necessary investments in overhead, without a doubt the organization underperforms."  Investing in the sustainability of the people and organization administrating programs is also smart business.  We know VC firms will patiently delay the short term ability for a start up to be profitable in order to invest more in infrastructure resulting in greater gains later.


TAKEAWAY:

Non-profits should operate more like businesses and I like donors wanting clear goals and measurable outcomes, but if we want long term gains, we cannot just fund program after program.  We must also embrace other smart business practices like investing in innovation and infrastructure.


For another look at the need to invest in the sustainability of the people running our vital community programs, please see my earlier post on Courage to Lead

Just Don't Get Paralyzed

If I take a break from reading about social issues, it's overwhelming trying to get started again.   So many issues, so many causes.  It's paralyzingly.   But, sometimes the distance away gives me perspective.  I noticed something interesting once I get started again. 

Articles about issues alone make me feel hopeless and weigh me down with despair. 

Articles about solutions that solve root problems give me hope and energizes me to do more.


This is why I love the New York Times online article FIXES.  Fixes explores creative initiatives to solve major social problems.

The most recent article is on impact sourcing.  The idea is to make it attractive for companies to outsource business processes to people in the developing world who come from impoverished or remote communities.  Outsourcing is a $100 billion dollar industry, but costs have risen and companies are looking for less expensive alternatives.

"There is no shortage of work to be done. The world runs on data and each day it needs to be updated. Shopping companies need to revise business locations; voice transcriptions need to be corrected; videos need to be captioned; photos need to be tagged; government archives need to be entered into databases; receipts and mortgage applications need to be scanned and verified."


Two social enterprise companies providing impact sourcing, Digital Divided Data and Samasource are successfully employing workers in "microwork," with just a computer and internet connection, across Haiti, India, Kenya, Pakistan, Uganda and South Africa ― some of them living in refugee camps .  Their clients include Facebook, Google and LinkedIn.

Work is at the core of human dignity.  These two companies have found a creative solution for providing an on-ramp to the global economic superhighway for the world's most impoverished, restoring dignity and hope.  Personally, these two companies fire me up and inspire me to believe the solutions are out there.



TAKEWAY #1:

Know which social issues articles motivate you and which don't.  Read the ones that inspire you and don't feel badly about the rest.

For me, articles about inventive programs that create a market based solution get me inspired.  You might find a different type of article inspires you.  Just don't get paralyzed.