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!