Archive for August, 2013

What’s Strategy Got to Do With It? On the Social Sciences and Philanthropy

Thursday, August 29th, 2013

My first post on the Stanford Social Innovation Review opinion blog:

http://www.ssireview.org/blog/entry/whats_strategy_got_to_do_with_it

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Clever Animals

Thursday, August 15th, 2013

Peter Singer’s recent NYT op-ed, “Good Charity, Bad Charity,” mounts a significant challenge to business as usual in organized philanthropy. He has no problem saying that certain forms of philanthropic endeavor are just not as important, and deserve less investment, than others.

Singer proposes a thought experiment comparing giving to treat river blindness in developing countries and giving to build the new wing of a museum, calculating (literally) that the former creates 10 times as much value as the former.

“Given this choice, where would $100,000 do the most good?,” Singer asks. “Which expenditure is likely to lead to the bigger improvement in the lives of those affected by it?”

There’s something forbidding about pursuing Singer’s line of reasoning. Where do you stop? How much of your income is enough to give to proven solutions that improve life outcomes for other people? If those exist and you know about them, aren’t you obligated by that knowledge to give as much as possible?

There’s an element of Singer’s thought that I hesitate to mention, because the debate he surfaces is a useful one. It has to do with the relative merit of people and animals. This element surfaces in what he frames as a more difficult question in philanthropy, as opposed to the “easy” one of deciding that preventing trachoma for 1,000 people is 10 times more valuable than building a new wing of a museum that 100,000 people will visit.

“The choice between, say, helping the global poor directly, and helping them, and all future generations, by trying to reduce greenhouse gas emissions, is more difficult,” Singer writes. Okay, climate deniers aside, so far so good.

“So, too, is the choice between helping humans and reducing the vast amount of suffering we inflict on nonhuman animals.” Really? That’s a difficult choice? “Nonhuman animals.” There’s perspective, and then there’s perspective.

In his provocative op-ed on“The Charitable-Industrial Complex,” Peter Buffett says, “I’m really not calling for an end to capitalism; I’m calling for humanism.” There’s an element of Singer’s thought that might label humanism as “speciesism.” Like I said, here’s something forbidding about following his line of reasoning.

I’ll have more to say about Singer’s challenge to philanthropy, but this facet of it seemed worth mentioning.

Jealous Guy

Thursday, August 8th, 2013

“I didn’t mean to hurt you / I’m sorry that I made you cry / I didn’t want to hurt you / I’m just a jealous guy”

I wonder if implicit bias is the progressive version of unintended consequences.

A truly powerful idea that’s associated with conservative thought but has become widely accepted is “unintended consequences.” You try to alleviate poverty by providing a village with a better paved road, and the town becomes attractive as a route for drug smugglers to use in transportation, bringing violence to the town. You create certification processes for businesses so that consumers are protected, and business is disincentivized because the red tape becomes unmanageable.

For foundations, you provide grants in your focus area, and nonprofits that are desperate or don’t know any better modify their missions to go along with what you fund. You try to be clearer in your grant guidelines, and nonprofits hew ever more closely to what you say.

Unintended consequences are usually marshaled as an argument against government intervention, which makes them a popular resource of conservatives. But the reality of their existence means progressives are aware of and care about them as well, even if they don’t like some of the thinking behind them. They’re a hard-to-deny reality that undermines a central tenet of progressive thought, the value of intentional collective/government action in pursuit of greater social welfare.

I wonder if implicit bias is the progressive version of unintended consequences – a hard-to-deny reality that undermines a central tenet of conservative thought, that, as Chief Justice Roberts put it in a recent decision on affirmative action, “The way to stop discrimination on the basis of by race is to stop discriminating on the basis of race.” If despite our conscious efforts, our unconscious minds betray us, Roberts’ notion is not enough.

Implicit bias is the idea that even if you don’t consciously hold racist beliefs, even if you would reject them with your conscious mind, you have still learned patterns of thought and behavior that encode biased and racially invidious beliefs.

Studies have been done looking at the way recruiters handle job applications differently based on something as superficial as people’s names (example, see page 4).

For foundations, implicit bias can affect the way that leaders of nonprofits are seen as legitimate or not, authoritative or not, trustworthy or not. There’s a gender dimension as well, as the study linked to previously points out as well.

My question is whether the moment for implicit bias to emerge as the counterpoint to unintended consequences has come. The beliefs that George Zimmerman had about Trayvon Martin based on the limited visual information he initially received – some were explicit (“they always get away”) and some were no doubt implicit. “Suspicious-looking” – so much is encoded in this slippery phrase.

We live in the era of the algorithm – they calculate what to recommend on Amazon or Netflix, what ads we see on Facebook, what search results we get on Google. We all walk around with implicit algorithms about race and propriety and danger. George Zimmerman’s came to light, tragically, fatally. How long before it becomes abundantly clear to all that implicit bias is real?

In the meantime, foundation folks who review and approve grant applications would do well to ask themselves about potential sources of implicit bias, and investigate means to mitigate them. Because it would be a tragic unintended consequence to allow implicit bias to undermine the laudable goals of philanthropy.

Change in My Pocket

Thursday, August 1st, 2013

I got a letter from my health insurance company today saying that my employer and I would be getting a rebate because under Obamacare, insurers are required to spend at least 85% of premiums on hospitals and health care services, and no more than 15% on “administrative costs such as salaries, sales, and advertising.”

The overhead ratio has come to healthcare, just as nonprofit leaders are calling for it to be transcended in the social sector.

The kicker: just for New York State, the amount of customer premiums for this one insurer in this one year is $2.2 billion. That would have put it at number 27 in the list of top 50 foundations by assets in 2011. So 0.7% of those premiums is about one-seventh of what that hypothetical foundation’s payout would be – call it one grant program. $15 million, give or take. (Now whether I as a policyholder ever see a dime of that rebate is an open question: my employer subsidizes my premiums, so they may decide to use whatever we get toward defraying those costs.)

I bring that up just as another reminder of the scale of philanthropy relative to other parts of the economy. And to observe that in the aggregate, even relatively small-seeming instances of inefficiency (missing the target by less than 1%!) can conceal some serious dollars.

But the larger issue is, do we want an overhead ratio in healthcare, is that actually a useful thing? For once, the nonprofit sector may be ahead of the game relative to other sectors. I worry we may have to really evangelize some of this thinking beyond our own sector – where it’s hard enough to get the word around. And it’s a tough sell in healthcare – hard to argue that we need more hospital marking. It’ll be interesting to monitor how this “Medical Loss Ratio”, aka the “85/15 rule”, plays out in practice. God, I hope the authors of the healthcare bill didn’t get that number from nonprofit overhead ratios….

Oh, and like everyone in philanthropy, I read and thought and talked about Peter Buffett’s blog on the “Charitable-Industrial Complex.” For me the definitive word on this is from Zack Exley here. The upshot: the unglamorous way to reduce poverty quickly is aggressive state-led development. Viva varieties of capitalism!