Archive for April, 2013

3 Years in the Hole

Thursday, April 25th, 2013

Not quite “30 Days in the Hole,” but there you go. Happy third blog-o-versary to me!

I’m frankly kind of amazed at all the ideas I generate on here; time to start reckoning with them in a more systematic way.

These are the questions or concepts I framed or developed on the blog in the past year, along with my three favorite posts of the  past year. Next week, I’ll do year two.

  • An app that lets you choose a good to donate (clothing, a teddy bear) to someone in a disaster zone that turns the value of that donation into cash, gives that to the person in the disaster zone, and gives the good to someone in your town, like at a homeless shelter
  • Personal leverage factor: the resources you can mobilize through your very existence
  • The Downton Abbey example: When is inefficiency at the level of the firm effectiveness at the level of the community or town?
  • Zombie philanthropic ideas that won’t die
  • Vertical ties and horizontal ties in giving
  • Democracy has a verb. Is there a verb for philanthropy? What does it mean to philanthropize?
  • Expressive and directional modes of consumer-citizenship
  • What are the political arts, and how can philanthropy use them?
  • Privacy, autonomy, and perpetuity as the tenets of the archetypal charitable foundation, and transparency, interdependency, and finitude as the (opposing) forces that shape contemporary life

My favorite posts:

Thanks to those who have followed along!

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Take the Bait

Thursday, April 18th, 2013

I’m pretty sure that it’s a spam account, but one of my Twitter followers seems to exist to spew out random questions about fundraising and the nonprofit sector, and solicit people to contribute answers. At the risk of further spam, I’ll take the bait and answer a question that showed up in my feed and piqued my interest:

“What if every company were non-profit including Wal-mart?”

My favorite kind of question, one that invites consideration of an alternate reality, in a way that questions the premises of our current reality. Lot of good sci-fi out of that conceit. (RIP Fringe, so good until the last season.)

There are different ways to answer this, but I’ll choose this approach: what if every company, instead of returning value to shareholders, were obligated to reinvest surplus in the mission?

To start with, would all companies be private? Would there be any reason to take a company public? There would if you thought that other people might like to share the risk of ownership with you because they believe in the mission. They might risk losing their money if the business goes belly-up. But wait – how is that any different from receiving donations from individuals? They don’t expect to get a financial return – in essence, they’re sacrificing that money, in return for the hope of social impact. (See last week’s post on the three returns and “third heat” of impact investing.)

Are we just talking about membership organizations, where people pay a certain amount to belong to an institution, like a film society or a museum? No, they’re not assuming any risk for anything other than their own money. Someone has to be accountable for the assets of the organization.

So a public non-profit company would be…just a regular non-profit. What would a private non-profit company be? A foundation? No, those have particular obligations to pay out 5% of their assets. And they’re insulated from market pressures other than on their endowments. A private non-profit company would have owners who would directly assume the risk of failure if expenses exceed revenues to the point where all assets are depleted.  It would have beneficiaries, and purchasers of its services, but only a relatively small number of owners assuming the risk. And they would do so without expecting value returned to them from a surplus.

So this seems to come down to ownership and risk. What’s different about a world where all companies are non-profits is that, at first blush, it’s not clear why anyone would start a company, or try to grow it. But I suspect if we look beyond the profit motive, there would be other reasons to do so. For another post….

Does Anybody Really Know what Time it Is?

Thursday, April 11th, 2013

Which is the title of a classic song from the band Chicago. I’m just back from there, having spent several days at the Council on Foundations conference. I tweeted up a storm, met some great people, and wrote a couple of posts for the conference blog:

Welcome to the (Global) Accountability Class
About self-motivated accountability in philanthropy

Learning: The “Third Heat” of Impact Investing—and All Grantmaking?
About the idea of a “learning return” in impact investing, and how it may apply to all of grantmaking