Debating the Wedge Issue

Is philanthrocapitalism a force for social change? That is the theme of a debate we are having with Kavita Ramdas, the former CEO of the Global Fund for Women, on the website of the consistently excellent Stanford Social Innovation Review. She says, no it isn’t. We say, yes it is!

Introducing the debate, the SSIR observes that philanthrocapitalism is “a term that came into common parlance in 2006” – when Matthew invented it in The Economist – “to describe the need for philanthropy to become more like for-profit markets with ‘investors’ and ‘social returns’, is becoming a social sector wedge issue. The reason? The increasingly uneasy relationship between markets, democracy, and economic inequality.” We are delighted that philanthrocapitalism is now getting the attention it deserves, though stimulating a debate about the role that philanthrocapitalism can play in briging about the right relationship between markets, democracy and economic inequality was why we wrote the book. The last chapter is all about the need for the rich to operate, in their wealth creation, consumption, political activism and philanthropy, within the context of a new social contract that urgently needed to be redefined.

We won’t rehearse at length here the arguments in the debate, as you would do better to read them for yourself. Suffice it to say, we think there is an urgent need for a debate on how to make philanthropy more effective, but “that debate must be based on real issues, not tired old dichotomies.” We raise four topics that we think should be top of the agenda. 1) How do we start a conversation about failure in philanthropy? 2) How can government change to work better in partnership with philanthropy? 3) How can businesses add to social value – not through PR-driven corporate social responsibility projects, but through their core business activities? 4) How can we get a greater focus on improving nonprofit performance and impact?

The debate is generating some interesting responses on the SSIR website, and we would be delighted if you want to continue it by commenting on this blog, too. These issues are too important not to debate them properly!

0 replies on “Debating the Wedge Issue”

1) For higher relevance to the implications of this debate, it seems best to address the failures of philanthropy with respect to two fronts: The first front relates to Ramdas’s concerns about “the dominant development model” and “the root causes of inequality.” How is philanthropy failing here, and is philanthrocapitalism even fit to provide any solutions? The second, and undoubtedly, more popular front relates to the “symptoms” of our underlying global problems such as hunger and malaria. A typical and excessively narrow perspective asserts that philanthrocapitalism only pertains to this second front and even questions its capacity here.

I don’t have time to go into lengths in this single comment, but I will certainly be sharing my personal thoughts on all points later. Well, actually, before moving on, I’m sure everyone agrees that these are two fronts of the same battle and a failure on either is intolerable. Yes, we should certainly be giving more focus to our global systemic problems than we currently are, but that should not detract from our efforts on symptomatic problems. After all, symptoms kill, and they frequently need to be addressed with greater urgency than a slow cure of broad systemic problems. It would be disgustingly inhumane for anyone to argue that “the poor should be left to watch patiently as their children die of preventable diseases.”

It would be really great to hear a gradual exchange on all of Bishop and Green’s points! 🙂

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