The Blog Briefly Known as "Democratizing Philanthropy?"

“Meet the new boss…same as the old boss” (go to about 7:35 in the video)

Continuing this week’s series on China and innovation, I suggested yesterday that among the varieties of capitalism, China will be good at innovation that requires lots of people acting in coordination – massive, massive amounts of people. What are the implications for philanthropy and the social sector?

The thing to think about is what philanthropy looks like in a non-democratic, semi-capitalist context. You’re building on a strong tradition of local-level generosity within communities – mutual aid and such. There’s no tax incentives, so foundations are set up with different incentives and for different reasons if at all. The “independent” sector isn’t particularly independent, it’s monitored closely by the government. The government is closely involved in regulating – in a way that the associations that word brings up in an American context can’t really capture – business activity, with state-owned enterprises and non-state-owned enterprises starting in the last 10 or 15 years. If you stay within the lines, you can build your business.

So this is a context where philanthropy is most likely going to be about advancing and to a degree complementing economic progress. It may also be about preserving traditional arts and cultures. Interesting question about whether those cultures will include ethnic minorities within the country – which ones get their stories told, in an officially-sanctioned way.

In its own way, the approach would be progressive – in that it’s oriented single-mindedly toward economic progress of the country, and bringing the most number of people out of poverty. Hard to argue with the numbers generated in the last 30 years. This is very troubling! It’s the Chile question all over again: would they have been able to generate those kinds of poverty-reduction numbers without an authoritarian government ramming policy change down the people’s throats? And who benefits, what’s the change in economic inequality? (Chile is one of the most economically unequal countries on earth.)

So in a context where innovation is about leveraging the power of massive numbers of coordinated people to solve problems that can only be solved that way, philanthropy becomes less about letting a thousand flowers bloom like in the U.S., but in harnessing the power of coordinated voluntary effort to promote cultural and social practices that reinforce and support economic growth. It’s just not any kind of independent sector.

That’s where this train of thought leads me…time to look into how things have played out in practice in Chinese philanthropy….

Continuing from yesterday on China, I’m wondering about the types of innovation that China’s economy will be good at. In the varieties of capitalism framework, coordinated market economies like Germany and Japan are good at incremental innovation, while liberal market economies like the U.S. and Britain are good at radical innovation. So what kind of innovation would a hybrid state-led Chinese model be good at?

I’m sure there are comparative political economists who have good answers to this, but I naively wonder if it isn’t mass-based innovation, the kind driven by sheer numbers of people. I think this recalling the opening ceremony of the Beijing Olympics. The film director Zhang Yimou put together a multi-multi-million-dollar ceremony of amazing scope and grandeur. And one of its central features was the coordinated action of all…those…people!

It was breathtakingly innovative, leveraging a vast and seemingly malleable labor pool to achieve effects that can’t be achieved any other way. Talk about scale!

So I’m thinking Chinese innovation – in the varieties of capitalism sense – is about offline crowdsourcing: throw a bunch of people at the problem. Or rather, think of problems that require tons of people acting in concert to solve, and go solve those.

Tomorrow I’ll explore the implications of this approach for philanthropy and the social sector.

Was at a philanthropy conference today, and one of the panels was about trends in the financial markets and their implications for foundation investment management. Unfortunately, the second part of that topic wasn’t really touched upon, but the three old white guys they had talking about the first part were pretty interesting. Half the conversation was about China: how long it’s going to rule the world, what that’ll be like. Turns out China has been the leading economic power in the world 17 of the last 20 centuries, so according to one guy, there’s a feeling of, “oh, we’re just reclaiming our rightful place.”

But the part that most caught my attention was the discussion of how China has managed to achieve spectacular economic growth in the last 30 years, not in spite of an authoritarian government, but because of it. I appreciated that one of the panelists pointed out that authoritarian governments may be good at the early stages of economic growth, but have a harder time with the more complex dynamics of the global economy. I’ve also seen the argument that China’s growth is not sustainable because the environmental shortcuts they’re taking will catch up with them sooner rather than later. I’d like to think these will be sufficient incentives to democratize, but I kind of doubt it.

I’ve written a fair amount on here about varieties of capitalism, and the types of innovation that different types of economies are good at. But I haven’t considered the Chinese model – particularly in the light of Gates and Buffett’s challenges bringing the Giving Pledge to China. Sounds like the start of another series…..

Going to hold off on posting the rest of the week, will be back next Tuesday.

Too easy on the title of the post. Traveling for work this week, staying with a friend in DC. Enjoyed a great meal, fun company, and stimulating conversation.

One of the topics we discussed was the political power of shaping public sentiment. I think one of the things that the right has been most successful at doing in recent decades has been normalizing a pretty heartless version of market thinking. If some people are poor, too bad; not everyone is going to get ahead. It’s interesting, by which I mean terrible, how inequality of endowments (some people are more capable than others) has been equated with inequality of outcomes (the poor will always be with us). Can philanthropy overcome this kind of thinking when it’s so rooted in inequality of outcomes (the rich set aside funds they don’t need for charity)?

My friend Nicole Rodgers launched a new project today, Role/Reboot, that seeks to restart the conversation about gender roles in our culture and society. Bravo! There’s some really interesting work going on in philanthropy about gender and giving. One of my favorite writers on this is Phil Cubeta over at GiftHub, who as a philanthropic planner has faithfully advanced a vision in which women are included at and are central to philanthropic planning in wealthy families and all families. He sometimes overdoes the “I’m not worthy” bit, but rhetorical excess seems to be the house style at GiftHub, so it’s all good.

And today we read the text of the speech our Main Man, President O, gave in Tucson at the service last night. The part that had me welling up was this:

Christina was given to us on September 11th, 2001, one of 50 babies born that day to be pictured in a book called “Faces of Hope.” On either side of her photo in that book were simple wishes for a child’s life. “I hope you help those in need,” read one. “I hope you know all of the words to the National Anthem and sing it with your hand over your heart. I hope you jump in rain puddles.” If there are rain puddles in heaven, Christina is jumping in them today. And here on Earth, we place our hands over our hearts, and commit ourselves as Americans to forging a country that is forever worthy of her gentle, happy spirit.

“Her gentle, happy spirit.” How beautiful to have that held up as the ideal for our country. Thank you, sir. Talk about a reboot.

(Had to google the title of the song for today’s post; thanks YouTube. I was surprised it was as recent as it was, it always felt like an ’80s song to me.)

Back to the song titles for post titles. Great issue of New York magazine this week, all about what’s the quintessential New York…fill in the blank: athlete, musical, building, TV show, etc. They got panels of celebrities and experts in each area to debate; half the fun was reading people debate what criteria to use – tenure, attitude, level of success, etc.

Which got me thinking, what would be the quintessential New York foundation? Of course there’s the New York Community Trust, but a community foundation is too easy. And New York is such a global city – is it Ford, or Rockefeller, players on the global stage? How about Open Society Institute, featuring a living donor who moves between spheres of influence – finance, politics – in a way that resonates with this town that’s the center of so many things? Is it Bloomberg’s anonymous-but-not-really largesse that until last year was funneled through the Carnegie Corporation? Or is it the Brooklyn Community Foundation, the scrappy upstart carving out a space in the shadow of a big kahuna?* Or the North Star Fund, raising money from the community to give to grassroots, social-justice causes, reminding us of the New York that most of its 8 million people inhabit?

There were two criteria that stood out for me from the New York magazine articles: that when you describe it in a single sentence, you have to use the word “New York” (by that light, Seinfeld is the quintessential New York TV show); and/or that it has to be the best at something (by which criterion Babe Ruth is the ultimate New York athlete). For a New York foundation, I’d say that you want something that captures the grandeur and ambition of the city, the sense of being at the center of it all and yet interested in everything. I’ll cop out for the moment and say that I don’t know that there’s one foundation that really captures that right now. If anything, Cory Booker’s efforts in Newark, funded by Zuckerberg’s $100 million announced on Oprah are more of that scope. Maybe Bloomberg when he rolls out his family foundation after leaving office will have that swagger. Once Jay-Z name-drops a foundation in a remix of “Empire State of Mind,” we’ll have our answer….

*Wow, that was a lot of incompatible images in one sentence.

(Disclosure: the giving circle of which I’m a part, the NYC Venture Philanthropy Fund, has had its donor-advised fund housed at both the New York Community Trust and the North Star Fund, and I’ve worked with Ford, Rockefeller, and OSI funding at an intermediary and/or at my current job.)

Ucch, so sad and scary about the shooting of Representative Giffords. I think I’ll pass on the clever song title for this post. Interesting how the opinion page of the NYT yesterday had two opposed takes on the upswing that were telling in their difference. Krugman sounded the alarm that it’s time to wake up and realize that while the left has rhetorical excesses, it’s a false equivalency to say that they’re similar to what goes on on the right these days. And literally on the same page, their conclusions meeting side-by-side at the bottom of the column, Ross Douthat works hard to make that equivalency, even tilting blame not-so-subtly to the left side of the ledger (George Wallace’s assassin “had only a tenuous connection to left-wing politics”).

There’s something to be said for the printed layout of an editorial page, to make you marvel that such different takes can co-exist. But of course, that’s the point, that they can, and that we argue about them in reasonable terms. I like Krugman’s term, about getting rid of “eliminationist” rhetoric. (That’s of course an ironic sentence if you parse it literally.)

For today, let’s pause and be grateful for the existence of the nonprofit/charitable sector in which I’m lucky enough to work, where people pursue their conceptions of the good in different ways with (mostly) honest effort and good intentions, in a sphere at least conceptually distinct from politics and business. In all of the necessary critique of this sector, it’s important at a time like this to recognize that its very existence is a blessing.

(With apologies to whatever band played that song in Reservoir Dogs for the title. There’s a TV show where all the episode titles are the titles of songs. I might try that for a while with blog post titles, this makes two in a row….)

Continuing this week’s theme on decision-making and transparency:

Congressional appropriations are a kind of grant. What if foundations had to go through a Congressional-style process while making grants? What kind of theater would ensue? Would you see foundation staff whispering in the ears of trustees, who would be seated behind nameplates and microphones, asking questions of the grant applicant, who’s shifting uncomfortably in the hotseat, reading prepared testimony?

The giving circle I’m involved with, the NYC Venture Philanthropy Fund, has a version of this, come to think of it. We do a “pitch night,” where our three finalists for one annual grant come to present to the membership, who afterwards get to deliberate together and vote online about which organization receives the grant that year. There’s definitely an element of theater there, of performance. And it’s interesting how it’s semi-public, for an audience that has ante’d up for the privilege of making that decision together. We have a lot of criteria we use to make the decision, and the deliberation is genuinely enjoyable. Feels like crowdsourcing at its best.

And see, there’s one of the challenges with transparency and decision-making. Whatever the experience of being in that deliberating group is like, I can’t think of a way to describe it without raising the potential, however remote, that someone might call into question the nature of the process. As much as I know internally that we do a careful job, from the outside looking in, it’s always going to have the potential to be mysterious or even suspicious. Even when there’s nothing going on. The very nature of the situation has the potential to breed mistrust. And that potential is amplified when you have – wait for it – more people involved in the conversation. Which is why observing Congress drives people crazy, because so many people are watching and the stakes are so high. (And, well, because there actually is a lot of venality going on.) So what would my giving circle’s pitch night look like with a lot more people watching?

I’m not sure where I’m going with this, I guess I’m trying to abide honestly in the place of ambivalence that drove me to this series of posts and to which I return in the end. I’m open to ways more transparency can improve decision-making, but I continue to have my doubts, or at least my questions….

(With apologies to Morrissey for lifting the title of this post from one of his songs)

Continuing from yesterday, I’m wondering about transparency and decision-making. One of the ultimate decision-making bodies, the U.S. Congress, reconvened today with the first class of Tea Party “freshmen.” Right out of the gate, the theater starts. (Remember how I pointed out yesterday, via Schattschneider, that when you increase the number of people in the argument, the incentive to showboat also increases?)  A friend on Facebook pointed out an article about one bit of performance art – Eric Cantor pushing to get rid of the (frankly kinda silly) resolutions the House does periodically to commemorate National Asparagus Week, or whatever. This is the kind of thing that happens when decisions are made visible – the Congressfolk sponsoring want them to be seen, they make a theater of decision-making, turning the very ability to make a decision into a spectacle. This is the power of certification, an authority changing the significance of something just by pointing its finger. What an abstract and strange power, when you think about it. But it’s real, given how long traditions like these House resolutions persist.

Do we expect such forms of theater to increase or decrease as decision-making becomes more public? Hannah Arendt has some truly beautiful writing in The Human Condition about the importance of the public sphere, and the meaningfulness of political participation – a lot of it based on the example of the Greek polis and the origins of democracy. But as some critics have pointed out, the gap in her thinking is, why do people (well, men in the Greek case) jump into the public sphere? And it turns out simple vanity may be the answer. They want to look good, they want to be seen as virtuous. We tend to think of corruption as the acts of venal people, and “sunshine” or transparency as a way of mitigating corruption. But what if the most venal people of all don’t mind – or even prefer – to do their dirty deeds in the full glare of the spotlight?