Archive for October, 2010

Attack of the Kohnasaurus

Thursday, October 28th, 2010

My pal Sally Kohn at the Movement Vision Lab has been crushing it lately in a series of op-eds from a progressive perspective on Foxnews.com, of all places, venturing into the lion’s dens with thoughtful, unapologetically progressive, well-reasoned arguments. The comments section of her posts are a horrorshow, but this is fighting the good fight, and I applaud her. Go Sally!

Her latest is about 3 areas of common ground between progressives and Tea Partiers. One I would add to the list, as I’ve been saying, is valuing local knowledge over centralized administration. This is a variation on a point Sally makes, that Tea Partiers mistrust centralized power in the form of government, and progressives mistrust concentrated power in the hands of big corporations. The flipside of that is, both sides like local, grassroots efforts and organizing. Locavores and loco-vores? OK, that’s cheap and a bad pun. But I continue to think the privileging of local knowledge is a bipartisan issue that hasn’t been explored sufficiently. Hopefully Sally’s work can help create an opening in which to have that conversation.

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Help a CIVET

Wednesday, October 27th, 2010

It’s been a couple of months since I posted in my series about the CIVETS, the emerging economies that are meant to be the next BRICs (Brazil, Russia, India, China). I was on the “I,” for Indonesia. Sadly, there’s been an oceanic earthquake there and an attendant tsunami that have killed at least 112 and left many more missing.

In the scale of recent disasters like Pakistan and Haiti, it’s small, but Indonesia’s certainly had its share of natural disasters in recent years, as the new Matt Damon movie reminds us.

Relief organizations are apparently having a hard time reaching the affected area. Stay tuned for opportunities to give to the relief effort as I identify them.

Perhaps because of the geographic difficulties, a Google search yielded relatively few results. The American Red Cross, Mercy Corps, Avaaz – none have anything up yet. (I’m writing this around midnight Eastern on Tuesday, though will set it to post in the morning.) This is what Twitter may (may) be good for, as a resource for breaking news when larger news and relief orgs haven’t been able to report out yet. Bizarrely, the most relevant link on an “indonesia” search came from…Tom Cruise. Go figure. Here it is, looks like the local Red Cross in Indonesia. There’s a way to donate in dollars, but it doesn’t look like online.

Remember the principles of smart disaster giving we learned from Haiti and Pakistan:

  • Give cash, not goods.
  • Support organizations that have existing relationships on the ground, it makes the process more efficient and means that more relief gets their sooner.
  • Give to the long-term recovery effort, not just immediate relief.
  • Be OK with the fact that because of what it costs to have an effective on-the-ground response, your dollar now may get into the field weeks or even months later, or on another disaster. Relief orgs need revolving sources of funding, and it’s not like you’re going to say, “no, don’t help those other people in the next disaster.” It’s like providing general operating support, give the organization that’s proven its ability to get help to those who need it the latitude to use the funds in the most effective way.

Five zombie philanthropic ideas that won’t die (#1)

Tuesday, October 26th, 2010

Inspired by a Foreign Policy article about “Five Zombie Economic Ideas that Won’t Die,” I’m thinking about the equivalent in philanthropy.

  1. Foundations are legally prohibited from doing advocacy.

The first one is easy: one of the most common concerns foundations, especially boards, express about doing policy advocacy is that foundations aren’t allowed to do it. The good people at Alliance for Justice have for years and years been combating this misperception. It’s an unfortunate case where a bit of nuance freaks people out. Perhaps it’s even just an excuse not to deal with the issue.

The main distinction is between what private foundations can do and what public charities, which include most 501(c)(3)s, community foundations, and other regranting entities that raise money from the public, like the North Star Fund or the Headwaters Foundation for Justice, can do. Public charities can lobby, but private foundations can’t – meaning only that they can’t take positions on specific pieces of legislation or specific candidates in an election. But both finds can fund lobbying and advocacy among their grantees.

Here’s AFJ:

Private Foundations May Advocate!

Private and Public Foundations May Fund Charities that Lobby

Public Charities Can Lobby: Guidelines for 501(c)(3) Public Charities (this includes public foundations like community foundations)

Public Foundation Representatives Can Safely Visit Legislators!

So the question really becomes, what else is behind a particular foundation’s reluctance to do advocacy? Is it about a certain level of public exposure, the risk of attacks from political actors or media sources? Moving past unfounded objections about foundations’ legal constraints with respect to advocacy opens up space for a conversation about these more fundamental questions – what Bill Ryan calls “generative” questions about who the organization is and what it wants to do.

Congratulations to AAPIP on 20 years!

Thursday, October 21st, 2010

I’m in Chicago, and couldn’t miss out on Asian American and Pacific Islanders in Philanthropy’s (AAPIP) 20th anniversary celebration last night even while traveling. Very fancy webstream from San Francisco to viewing parties in 10 cities across the country. Check out the Twitter hashtag #aapip2010.

I used to work for AAPIP’s sister organization, Hispanics in Philanthropy, and I know both how hard and how rewarding it is to keep pushing an agenda of unity and the higher road in the face of a rapidly changing sector. So proud of AAPIP, HIP, and other affinity groups that have stayed ahead of the curve. Congratulations!

Five zombie philanthropic ideas that won’t die?

Wednesday, October 20th, 2010

Foreign Policy has an interesting piece entitled “Five Zombie Economic Ideas That Won’t Die.” They’re bits of economic “wisdom” that the economic crisis is meant to have shown we ought to abandon, but for some reason people (and policymakers) stubbornly keep alive. The candidates are things like trickle-down theory and the idea that privatization is always good.

While I enjoy any chance to excoriate lock-step laissez-faire dogma, this piece has me thinking: there must be at least five zombie philanthropic ideas that won’t die. Here are a few candidates, which I’ll expand upon in future posts:

  • Foundations are legally prohibited from doing advocacy.
  • General-operating support doesn’t allow you to demonstrate impact.
  • If we accept unsolicited proposals, we’ll be drowned in inquiries.
  • Every grant should have rigorous evaluation.
  • It’s possible to ameliorate the power imbalance between grantmakers and grantseekers through open communication.

What are other zombie philanthropic ideas that won’t die?

Why does the New Yorker want me to stop trying to improve the world?

Tuesday, October 19th, 2010

Two interesting articles over the past few weeks about the difficulty of intentional action to improve the world. (And yes, I’m aware that I’m relying on them too much for material, but some things just cry out for comment.)

Philip Gourevitch on humanitarian aid and conflict. Does the presence of an international humanitarian aid “industry” incentivize actors in a conflict to increase their level of brutality so as to garner international aid, which ultimately benefits both sides because of the avowed neutrality of such sides?

Adam Gopnik on a new biography of Adam Smith. I learned from Jeff Weintraub back in the day that Smith was more complicated than the invisible hand, but now I’m sorry I never read Smith’s other masterpiece, “The Theory of Moral Sentiments.” The way Smith tends to get interpreted is that the invisible hand of the market orients social outcomes in a positive direction without anyone actually trying to make that happen: pursue your individual self-interest, and through the operation of the market, social welfare will be improved.

The upshot of these two pieces seems to be, “be very, very careful, oh ye who would improve the world through intentional action.” But Gopnik’s piece adds useful nuance to the conventional view of Smith, who didn’t say the invisible hand would always lead to better outcomes (direct quote of Smith below, emphasis added):

“Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, not knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only is own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which has no part in his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”

If we accept this point of view (which is still debatable), what surely needs figuring out is when intentional action to promote the common good is and is not preferable to the pursuit of self-interest. It’s this consideration of incentives, particularly political and military ones, that may be useful to the humanitarian aid groups that Gourevitch writes about.

Don’t stop trying to improve the world, just be very, very aware of what kinds of ripples the stone you drop into the pond may cause.

Stones in the river (conclusion…?)

Thursday, October 14th, 2010

A lot of my series of posts have been open-ended; I’ll try closing off a multi-post arc.

Continuing about the potential lessons for philanthropy from China’s economic development: Justin Lin, chief economist for the World Bank, says for developing countries, “markets are indispensable but government is also indispensable.”

If we accept that both governments and markets are indispensable for economic development, how do we think about the role of foundations – not just with respect to economic development, but more broadly?

Governments set the rules for markets, enforce property rights and security, and can through “industrial policy,” pick “winners” and provide support to bring them to scale.

Markets generate new ideas through competition. Some organizations succeed and others fail; a few are able to reach scale and most either stay at a small level or don’t survive.

Philanthropy can do two things, it can be the source of finance for nonprofit “firms” that operate within the third sector, and it can generate ideas that can be applied by government in the public sector. Foundations can be the engine of industrial policy at two different levels: within the public sector, by picking winners among nonprofits and bringing them to the attention of government; and within the nonprofit sector, by picking winners among nonprofits and signaling to individual donors that they should support them.

It’ll be worth investigating what we’ve learned about industrial policy in different contexts, and thinking about how it applies to nonprofit finance. So much for a closed-ended arc. Closed for the moment, I suppose….

Stones in the river (continued)

Wednesday, October 13th, 2010

Completely fascinated by this New Yorker article about the Chinese economist who’s the head economist at the World Bank. A central tenet of the varieties of capitalism approach I’ve written about extensively on this blog is that there is more than one way to achieve US/European levels of prosperity, and that at least one of those ways involves much more coordination among firms and with government than we see in the US/UK model.

Continental Europe and Japan offer alternative modes (varieties) of capitalist development. For Japan, and the other East Asian “tigers” like South Korea and Singapore, the timing of their development is very important. After World War II, the U.S. continued to have a strong military presence in the region, essentially providing a basis of security. As a result, these countries focused on economic development, and did so in a relatively egalitarian way, involving the countryside in the process (unlike in Latin America, where development has exacerbated existing inequality, particularly in the absence of land reform in most countries).

In this context, China’s development in the last 30 years is interesting, because it happened not with the U.S. de facto providing security through its presence in the region, but through a complex and destructive internal history including the horror of the Great Leap Forward (between 30 and 45 million people died in the attending famine) and the gradual economic (not political) opening under Deng Xiaoping, against the backdrop of Cold War US-Russian rivalry. And the approach, as I focused on yesterday, was “tinkering gradualist,” as Justin Lin, the economist, puts in the article.

Crucially for the varieties of capitalism approach, the government played a key role in promoting development. Lin

“favors a kind of ‘soft’ industrial policy, in which a clamorous free market produces new industries and firms, and the government spots the best prospects and helps them grow by giving them tax breaks and building infrastructure like ports and highways…to rise out of poverty…markets are ‘indispensable’ but government is ‘equally indispensable.'”

Two things there: 1) Wow, that first part sounds a lot like the Social Innovation Fund. Industrial policy for the nonprofit sector? 2) The last phrase is a perfect summary, to me, of the basic varieties of capitalism argument. And it’s a perspective that’s very much needed in current political debates about the role of government.

The question is how philanthropy fits in to all of this. It’s traditionally been seen as part of the third sector between government and business. If we apply a Lin-style developmental/varieties-of-capitalism view, where does philanthropy fit in? To be continued….

Throw another stone in the river, Paul Carttar

Tuesday, October 12th, 2010

Fascinating article in the New Yorker on the head economist of the World Bank, who’s Chinese, and his relationship to China’s boom. For me the most intriguing parts are the implications of the boom for our understanding of the relationship between markets and democracy. As I’ve been saying, the two aren’t inexorably linked (an insight I owe to Jeff Weintraub from a political science seminar lo these many years ago at Williams College). China’s the best example of this: an opening up of markets happening comfortably under an authoritarian regime, and flourishing. At least for the moment; the reaction to the Nobel Peace Prize being given to a leading Tiananmen dissident is indicative of some of the tensions behind the model.

But what’s interesting about the China boom for current philanthropic discussions is the country’s approach to scale. The article describes the policies of the three main economic reformers, Deng Xiaoping, Chen Yun, and Zhao Ziyang:

“Of all their principles, the most important was the willingness to experiment and adapt. When the villagers of Xiaogang and elsewhere stumbled on success, Party leaders expanded their initiative to eight hundred million farmers around the country.”

Sounds like a typical command-and-control economy; what the center says is imposed everywhere – an approach very compatible with authoritarianism, some would say ideally suited. But wait for it:

“China’s reforms had no blueprint. The strategy, as Chen Yen put it, was ‘crossing the river by feeling for the stones.'”

Now there’s a twist: not that they were making it up as they went along, but that they were taking a Social Innovation Fund-style approach to looking for strong local solutions and providing funding to implement them on a large scale. Interesting that the type of political regime best able to take advantage of such an approach (expanding to eight hundred million people!) is an authoritarian one. Talk about varieties of capitalism….

On “diversity”: the perils of monoculture (part 3)

Thursday, October 7th, 2010

Continuing from yesterday: what kind of “diversity” are we looking for in foundations: perspective, experience, background?

I go back to the idea of inoculation: low doses of a pathogen to help you build up immunity. And immunity doesn’t necessarily mean, if I understand it correctly, that whenever the pathogen appears it’s destroyed, but rather, that its presence can be managed without danger to the host. So I think about this in terms of ideas or memes: what’s to be avoided is groupthink, and introducing low doses of ideas that are controversial to the group is a healthy form of preventative medicine, a kind of intellectual inoculation.

So if my little formula from yesterday is that part of an individual’s experience (what happened to them in the past) is how their background (where their past fits into larger social, demographic, political trends) shapes their perspective (the way they view the world, which is more mutable than experience or background), then it sounds like you want people with different perspectives, and you chances seem better of getting that when you have people with different backgrounds AND different experiences.

This doesn’t just have to be within the walls of the foundation, it makes sense to include perspectives, experiences, and backgrounds of grantee organizations, constituents, and other stakeholders. If we’re looking to avoid the perils of monoculture, a foundation should think about its full battery of intellectual immunizations. How do you make sure those are up to date, given the cast of characters (and their perspectives, experiences, and backgrounds) you currently work with? Do others need to be brought in the mix to give a booster shot?