Archive for January, 2014

Phantom of the Paradise

Thursday, January 30th, 2014

Picking back up on the “Redefining Capitalism” article from the latest issue of Democracy. In a prior post, I wrote:

The role of foundations as labs for innovation…The redefining-capitalism lens suggests that this function is essential to philanthropy’s role in the capitalist system. By focusing on specific problems and promoting creative solutions to them, foundations play their part in helping capitalism function more effectively. Which depending on your point of view, may not necessarily be a good thing. But this redefining perspective certainly makes it sound more palatable.

I’ve been thinking a lot lately about phantom needs that fuel the economy. Go into any Duane Reade drugstore (that’s what Walgreens is called here in NYC), and all along the aisles and in front of every checkout counter are little products someone came up with to entice people to part with their money: USB dongles that go in a car’s cigarette lighter, another kind of candy bar, light vanilla soy milk. What if you walked into a Duane Reade, or a grocery store, and the only things on the shelves were things you actually buy or have ever bought? How bare would those shelves be? Now layer on the version of that image for each person who walks in on a given day. How empty would the shelves be? What proportion of products never get bought by more than two or three people in a given week, or month? Yeah, you’d think those products would disappear from the shelves, and I’m sure the data analytics at Duane Reade are pretty decent to enable them to do so – but maybe some items are a package deal from manufacturers: want to sell Doritos, which you know people want? You gotta stock Funyuns, which no one wants, but we’re going to try to push anyway.

Funyuns are a phantom need. If they didn’t exist…meh. Would the world be any different? Would anyone’s well-being really be diminished? (Don’t touch my Munchies mix, though, those are vital to national security and the general welfare.)

And yet we’re told that what the economy needs is more businesses, more ideas, more people making…stuff. Like USB dongles and Funyuns. Those are invented needs. Which are EVERYWHERE. They fuel our economy: stuff we don’t need, and just barely want. But you know, just seem, maybe useful, once. I’m thinking ahead to spring cleaning, and looking at how many clothes I haven’t worn even once in the past year. Closet full of phantom needs.

This may ultimately be the value of the social sector: we focus on real needs, not phantom needs. The problems we focus on are hopefully ones that are genuinely worth solving. If that’s helping capitalism function more effectively (doing the right things) as opposed to just more efficiently (doing things right), then maybe that’s not such a bad thing.

Until you stop to think about the problems that capitalism creates, especially in the pursuit of phantom needs.

There are some problems that are just problems of resource extraction – fuel pollutes. Those are real needs, however bogus the solutions (“clean coal”). Those negative externalities should be internalized, and taken into account when making planning decisions.

But problems caused by the fulfillment of phantom needs, like the giant plastic island in the Pacific from plastic shopping bags? (Which, it turns out, isn’t an island, but is still bad news.) As the guys on ESPN would say, “c’mon, man!”

So, new rule: to judge the value of a solution, you have to weigh both the problems its solves as well as the problems it creates. And if the needs the solution solves are phantom needs, well, that’s just a problem in itself.

How good are nonprofits at defining and solving real needs and not phantom needs? How good are foundations?

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99 Problems

Thursday, January 23rd, 2014

…but foreign aid ain’t one?

I’m wondering whether we’re too problem-oriented in philanthropy. Are we so focused on figuring out things that need to be fixed about the world that we have a hard time seeing the way that things have improved?

Bill Gates published his annual letter about the Gates Foundation’s work this week, and it focused on countering “3 myths about foreign aid.” The crux of his argument is that within his lifetime (he was born in 1955), billions of people worldwide have been elevated from extreme poverty, and that in a bit more than 20 years (2035), he expects that there will be “almost no poor countries” in the world – meaning, almost no country will be as poor as the 35 countries classified as low-income today, after adjusting for inflation.

Put this alongside the recent news that India has all but eradicated polio, and it’s important to remember – things are actually getting better for huge numbers of people across the world. Gates also cites the rise of middle-income countries like China, India, and Brazil, which contain huge portions of the global population. Their economic development, while unequally distributed, has led to a notable decrease in human misery. There are still more than a billion people in extreme poverty, “so it’s not time to celebrate.” But it is time to recognize, Gates argues, that a lot of aid has worked.

The value and effectiveness of foreign aid is a whole other topic of discussion. But I’m struck by the notion that problem-oriented philanthropy may at least partly blind us to the progress that has been made in addressing problems. It’s like we get so focused on our particular problem, our theory of change, that we forget to look up and see that some pretty major collective problems have actually gotten better. No one needs to give up on problem solving anytime soon (though I’ll be glad when there are no longer any Indian doctors who have a memory of treating a polio case), but a virtual high-five to those who’ve made real progress, even if not in our field, is a good idea.

What sign of progress NOT in your own area of focus are you most excited about? Bonus points if it affects people nothing like you and whom you’ll never meet.

We’ve Only Just Begun

Thursday, January 16th, 2014

I’ve been writing about collective action in philanthropy. But what happens when it ends?

Health Care for American Now (HCAN) is the entity set up to manage key elements of the campaign to pass the Affordable Care Act, aka Obamacare. Atlantic Philanthropies, among others, made heavy investments of time, talent, and treasure, in helping HCAN achieve its goals. And achieve them it did – against long odds, the ACA was passed. And then a couple of years passed while bureaucrats talked about what the rollout would look like.

Then came October 1, 2013. And all of a sudden, Obamacare was a mess. The initial rollout of healthcare.gov was a complete disaster, and even now, the site is plagued by myriad problems. As I’ve written before, it’s important to remember that part of the reason so many people hate the government so much is not primarily ideology or having the wool pooled over their eyes, but the low quality of their day-to-day interaction with government services, whether the IRS or the DMV. The fiasco of healthcare.gov was this grievance on an epic scale.

In the midst of the recovery from the bungled initial rollout, HCAN has, according to its plans, shut its doors, as of December 31, 2013. “It may seem a funny time,” writes former national campaign manager Richard Kirsch, :with the current fracas over the implementation of the Affordable Care Act, but that is the point. The organization’s campaign mission was to win passage of a law, a mission extended to include ‘win and secure’ the ACA.” But wait! What about implementation?

There’s a lesson here for philanthropy: It’s not enough to get the policy passed. It has to be implemented well for the change to truly stick. Where’s the coalition for effective implementation of healthcare reform? HCAN did its work superbly well, and is to be commended. But where was the planning for the implementation phase?

We have the opportunity to learn from this experience. If comprehensive immigration reform happens this year, it won’t be enough. There have to be plans in place for effective implementation. The 11 million people who could be on a path to citizenship, like the tens of millions potentially covered under the ACA, deserve no less. Lift your sights up higher, funders, and see the true horizon.