The Obama Opportunity

Barack Obama’s inauguration was truly inspiring, evoking the hope that, for once, the American government can help solve pressing problems ranging from economic crisis to war to climate change. What does this imply for philanthrocapitalism?

Matthew is in Washington this week, and was spotted catching up with some philanthrocapitalists who were celebrating the new administration at a party called “Cocktails We Can Believe In”. A common theme of the conversation was that so many people in the Obama team, including the new president, have spent time in the non-profit sector, where they have been exposed to and shaped by philanthrocapitalism.

The new president worked for a while with the $500m educational challenge initiated by the billionaire Walter Annenberg. His education secretary, Arne Duncan, worked closely with a number of charter schools funded by the Bill & Melinda Gates Foundation. Lael Brainard, who will be Undersecretary for Economic Affairs, hosted a conference in Aspen to explore how the “new players” of philanthrocapitalism were transforming the aid and development process. (We presented a paper at the conference.) Several members of the transition team have good philanthrocapitalistic credentials: John Podesta, who headed the team, is a regular at the Clinton Global Initiative; Sonal Shah works for; Howie Buffett is the grandson of Warren Buffett, and already an active philanthropist.

As we have argued, in many cases philanthrocapitalists will have to change how government behaves if they are to achieve the impact they desire. (This has led some people to suggest that we should have called our book “philanthro-socialism”.) Now that some of these “children of philanthrocapitalism” are in government, or at least in a position to influence it, the question is will they go back to traditional ways of governing, or instead bring the insights and methods of philanthrocapitalism with them into government, including by working in partnership with philanthrocapitalists?

Our hope is that they will see the potential for scaling up what they learned about social innovation whilst working with non-profits, social entrepreneurs and philanthropists, and that the result will be smarter, more effective government. Perhaps that will prove to be naive. But surely there is no better time than now for a bit of audacious hope.