Obama’s Philanthrocapitalism

Although he did not actually appear in person, Barack Obama stole the show at last week’s Global Philanthropy Forum, as senior figures from his administration invited the philanthropists and non-profits gathered in Washington to partner with them. This is is great news, and something we have argued for. If done well, it can help philanthrocapitalism to achieve some of the potential we describe in the book.

Sonal Shah, formerly a senior executive at Google’s philanthropic arm,, gave her first public speech as head of the new White House Office of Social Innovation. She said the doors of her office are “wide open” and warmly invited philanthropists and social entrepreneurs to come forward with innovative ideas about how to work together.

In a speech, Obama’s Secretary of State, Hillary Clinton, announced that she would use the department’s Global Partnership Initiative to work with philanthropists, as a key part of her “smart power” strategy. She cited several examples of “cutting-edge philanthropic tactics that can be replicated on an even larger scale.” She continued by explaining that scaling up is “where government can come in. We have unique strengths to offer at the State Department and USAID, with our global reach, with relationships that connect us with governments and people around the world.”

In particular, Clinton – who has clearly learned a lot from watching her husband’s philanthropic career – thinks that the state department can fill three key roles as a partner to philanthropists. “First, we can be a convener, bringing together people from across regions and sectors to work together on issues of common interest. Second, we can be a catalyst – launching new projects, actively seeking new solutions, providing vital training and technical assistance to facilitate additional projects. And third, we can be a collaborator, working closely with you and other partners to plan and implement projects – avoiding duplication, learning from each other, maximizing our impact by looking for best practices.”

These three seem right, though perhaps in the division of labour within a partnership the philanthropists should do more of the initiating and catalysing, and the government more of the collaborating, especially that bit about avoiding duplication and identifying best practices.

Matthew chaired a plenary discussion on public-private partnerships, involving three participants in the first partnership included by Hillary Clinton in the Global Partnership Initiative – the US Palestinian Partnership, which is aiming to promote peace by encouraging business investment in the West Bank (and hopefully, one day, Gaza). Walter Isaacson chairs the partnership, Jean Case (who runs the Case Foundation with her husband, Steve) has been an energetic philanthropic partner in it, and Shelly Esque has overseen Intel’s involvement, which includes investments in education.

Isaacson, who is also president of the influential Aspen Institute, told an interesting story of how good can come out of bad. In 2005, several Jewish philanthropists, including Jim Wolfensohn, a former head of the World Bank, had paid for the ownership of some fruit and vegetable growing green houses in Gaza that had been occupied by Jewish settlers to be transfered to the Palestinian authority. However, within a couple of days, these viable going concerns had been wrecked with the apparent approval of the new owners. This might have been a source of discouragement, and certainly excited lots of attacks on the philanthropists in the Israeli press, yet according to Isaacson it in fact provided the impetus for the creation of the US-Palestinian Partnership, which he says has already generated considerable sums of money from American businesses to help develop the West Bank – though, such are the problems being addressed there, progress will surely be on a wing and a prayer.

Describing the panel in her blog, Jane Wales, the founder of the Global Philanthropy Forum, writes that Case “stressed that neither the public nor private sectors are homogenous groups, so you have to carefully analyze the tools that each entity brings to the table so that you are sure you are not asking a potential partner to take on a role that they are not built to take on: “what fails”, she explained, “is when you ask a partner to do something they’re not good at.” She noted that business is most effective in promoting change when it is intrinsic to their value chain or business interests. Shelly added that it’s crucial that philanthropists be explicit about their expectations in collaborating: spend the time up front asking all the tough questions, be clear about what your strength is.” Wise words, indeed.