Posts Tagged ‘freedom’

Discount Double Check

Thursday, February 6th, 2014

One of the central issues in philanthropy is time horizons. Do you exist in perpetuity? Are you spending down within the donor’s lifetime? Are you looking to bring the next generation into governance? When can you expect to see impact?

Private funders have a tremendous luxury in the ability to set their own time horizons. If they want to exist in perpertuity, the law allows them to pay out 5% of assets per year, and with sound investment policy, they can keep ahead of inflation for a long, long time, and not have to touch the principal. If they want to spend down within the founding donor’s lifetime, as Chuck Feeney of the Atlantic Philanthropies has elected to do, or within fifty years of the death of the last founding trustee, as the Gates Foundation will do, there’s nothing stopping them.

Compare their reality to that of other endeavors:

  • Publicly traded companies: Quarterly earnings reports drive the stock prize and the value of compensation. Analysts will punish you for failing to make predictions. (Almost makes you not want to publish your theory of change if you’re a foundation – why be seen as making a prediction?)
  • Elected officials: Members of the House of Representatives are elected for two-year terms. As soon as they’re elected, they have to start campaigning again. Maybe this was designed to keep you accountable to the people, but nowadays, it means you’re accountable to donors and fundraising events.
  • Pop stars: One album doesn’t sell – hmm, have they lost it? Two albums don’t sell – bye-bye record deal, enjoy the nostalgia circuit.
  • Sports coaches: The Monday after the final regular-season NFL game, the coaching carousel begins to turn. The Cleveland Browns have had three head coaches in three seasons.

It’s really only tenured college professors who have at all comparable time horizons to private funders.

So how should private funders handle this power?

There are worse places to start than gauging δ.

What’s that, you say?

I said, δ.

Is that a backwards six?

No, it’s a lowercase delta, the Greek character. You may recognize its upper-case sibling, Δ, the symbol for change.

Lower-case delta, δ, is the symbol for the discount rate, your personal algorithm or set of assumptions for how you value future payoffs relative to present ones. “This ice cream tastes good. If I have another few spoonfuls, I’ll enjoy them, but man, my stomach will hurt in 20 minutes. So I can have yummy ice cream now, or sleep better later.” If I have a low discount rate, the value of future payoffs goes up, and I get a good night’s sleep. If I have a high discount rate…well, at least I can blog at 1:15 in the morning.

So, low δ = high patience.

High δ = politicians, public-company CEOs, sports coaches, pop stars: give me success now, whatever the cost.

Now, what happens when you have high δ people running a low δ institution? This is one of the problems with governance in philanthropy. We look to experts who thrive in high δ environments and ask them to downshift to a low δ mindset, without necessarily the tools for making that shift and checking their own instincts.

The good news is that in economics at least, δ boils down to preferences. And preferences can change. The art of governance in philanthropy may be tapping into the power of low δ thinking. I’m curious how much being a family board affects this. The presence of children is a classic way to lower δ – “think of what they’ll inherit.”

How do you see δ play out in the foundations with which you work? How do they value future payoffs relative to present results, particularly with regard to funding decisions?


System of a Down

Thursday, November 21st, 2013

So, the Grantmakers for Effective Organizations (GEO) “Supporting Movements” conference this week was as good as advertised. Great mix of speakers, lots and lots of practical tools and applications, an appealing variety of formats and topics. Kudos all around.

Substantively, I came away with a lot of questions about the term “movement,” and how it was used to describe different forms of collective action. If I understand GEO’s take correctly, what we’re talking about under the rubric of collective action are:

  • Networks
  • Coalitions
  • Campaigns
  • Movements
  • Collective impact

These are related, but have important distinctions. Campaigns are generally time-bound and issue-based; they’re probably the least permanent of the five types. There are electoral campaigns, which have a definite end date and a very specific aim. There are issue campaigns, which can last a very long time: the campaign to reduce tobacco use has evolved over decades and taken many forms.

Networks and coalitions are especially closely related. It’s not always clear which is an instance of which. Is a network a type of coalition or vice versa? I tend to think of a coalition as a type of network, one that is specifically goal-oriented. It has a target. Therefore, an issue campaign is a strategy a coalition might undertake. A coalition to advance the passage of health-care reform might run a campaign in favor of the public option.

Collective impact, as it’s been used in recent years, tends to be place-based, which the previous forms aren’t necessarily. And it tends to be explicitly cross-sector, involving funders, nonprofits, and often business and government.

Movements I think of as the most ambitious and having the longest timeframe. They mobilize one or more constituencies that have a specific claim – rights, recognition, dignity, freedom – that requires a rearrangement of existing social norms, relations, or structures. They try to change a system. And that change usually takes generations, although dramatic gains can be made in compressed periods of time, such as advances on marriage equality in the last five years.

So what I think threw a number of people I spoke with at the conference was the way the opening plenary framed a “movement” around reducing childhood obesity. For a number of folks in attendance, myself included, movements are constituent-driven and seek the transformation of existing social systems and power relations. A coordinated effort to reduce childhood obesity has many merits, but in important respects it operates within the existing status quo. It’s a really good coalition – but a movement?

This gets at a central tension in the world of collective action: how much are we talking about changing the practices of systems, and how much are we talking about changing the behaviors of individuals? Childhood obesity is a widespread conditions that’s socially pernicious. I can see a campaign against that condition. But what is it a movement for? The civil rights movement has a positive aim, it seeks to obtain the expansion of civil rights to all. If the childhood obesity “movement” were a movement for healthy children – of which lower rates of obesity is one indicator – then maybe I could see it. But even so, it’s not the children themselves who are necessarily mobilizing. Adults are mobilizing on their behalf – a remove that seems contrary to the spirit of movements as I understand them.

So, all through the conference, I was working on this dichotomy in my head and in conversations. But my tablemate at the closing plenary gave me another bone to chew on. (Ew, not literally.) She described successful efforts to address homelessness that were explicitly not constituent-driven or funder-driven. It was funders and researchers who had the ability to generate data to show what programs actually impact homelessness that were able to galvanize collective action…(here’s that phrase again) on behalf of the homeless, who weren’t necessarily mobilizing themselves.

So maybe there are movements of (positive goal of claiming a right, constituent-driven) and movements for (goal of solving a problem, not necessarily constituent-driven) – and we need a better term for the latter.

Do you find this a tenable distinction? What’s the right term for “movements for” or “on behalf of”?

Coat of Many Colors

Thursday, September 12th, 2013

New York City’s mayoral primary was this week, and the discussion reveals many of the dumb ways we think and talk about race, power, and representation.

The narrative around New York politics has long been about identity and voting blocs: blacks, Puerto Ricans, Chinese, Jews, LGBTQ folks have their own enclaves, candidates, and voting patterns. Candidates for City Council or Mayor play to certain constituencies with certain targeted messages.

This election scrambled all that. The queer woman candidate lost among women and LGBTQ folks by double-digit margins, the Chinese candidate couldn’t carry the Chinese vote, and the African-American candidate couldn’t carry the black vote. In the space of two months, Bill de Blasio, the public advocate (a largely symbolic post), came from nowhere to the cusp of a runoff-avoiding plurality.

So how did he do it? And why did Thompson and especially Quinn implode? Here’s where the dum-dums step to the mic.

Let’s get a couple of things straight. It’s insulting to think that representation trumps reality: Liu lost the Chinese vote because people could see him implode, and De Blasio convinced them that he couldn’t win and they should get on board with someone who could. And Thompson lost the black vote because he didn’t come out against stop-and-frisk, while De Blasio did, strongly. There’s pride in seeing one of your own come to power, but they have to deliver. It’s as simple as that. People can see what’s in front of them. So stop being surprised that people didn’t automatically line up behind “their” candidate.

You’ll note that the common factor in the above two examples is De Blasio’s cunning. Another element of it is the ad that featured his family, his African-American wife and their Afro’d teenage son. As the NYT points out in a fascinating piece about his campaign strategy, the ad made clear that De Blasio’s opposition to stop and frisk wasn’t just a progressive checklist item, but grounded in a real fear about his son’s well being. Bloomberg called this tactic “racist.” I mean, honestly. This is like Chief Justice Roberts saying “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” No, sorry, it’s by educating people about the fictitious (as in, socially constructed) nature of race and emphasizing that part of people’s common humanity is their ability to draw on many different identities – and not be defined or determined by any one of them. Again, why is this so hard to grasp?

Don’t even get me started on how these fallacies play out in philanthropy. Suffice it to say that we need to make room for people to say the wrong thing so that real, sensible conversations can happen about how to acknowledge, respect, and balance differences of background and identity. If NYC voters can see past convenient labels to the reality of a candidate’s life and convictions, then funders have to be able to talk constructively about how and why they may or may not target particular racial or ethnic populations – without being called racist or automatically being thought of as progressive. What’s the thought process? We could all stand to do more unpacking of mental-emotional models via that kind of question.

This Blog is Just Six Words Long

Thursday, March 22nd, 2012

Trayvon. Trayvon. Trayvon Trayvon Trayvon. Trayvon.

What the hell, people. What the EFFING EFF.

In good news, Leah Hunt-Hendrix is awesome. I can’t wait to read her book on the “genealogy of solidarity.” And she’s stirring things up within philanthropy among individual and institutional donors. Go Leah!

Subterranean Homesick Blues

Thursday, February 2nd, 2012

I’m back. The past few months have been a blender work-wise, but I’m back to blogging.

And thank you Albert Ruesga for inspiring my return. Your most recent post on White Courtesy Telephone, “Steve Jobs, the Meaning of a Nonprofit, and Moral Imagination,” crystallized a lot of the things that have been troubling me about sector agnosticism. As arbitrary as the tax code is on some level, the designation “not-for-profit” captures something essential about certain forms of collective action.

As much as the lines between sectors are blurring, I predict that non-profits won’t go away entirely. There’ll always be a sphere of action that is fundamentally opposed to commercial motives – as much as contemporary life in These United States is geared to make us think of “democratic capitalism” as the state of nature, unearthed and made real.

I mused last time about a progressive theory of wealth accumulation. I’ve also complained about the paucity of our theories of human behavior. At the Venn-diagram intersection of these two is a progressive theory of human frailty, of fallibility. Novelists get at this, screenwriters too – but in the political sphere, conservatives have staked out this territory as their own. In one prominent right-wing worldview, progressives believe in the perfectibility of man, that the application of reason can lift humanity out of the benightedness of religion and into a land of rational justice – while conservatives, grounded in Judeo-Christian teachings, see man as fallen, as having original sin, and therefore never being perfectible. On this view, social engineering, attempts to order society to perfect man, are not only doomed to fail but fundamentally misguided due to the fallen nature of humankind. Better to preserve traditions that have emerged organically. (Hello, antebellum South.)

But I believe there has to be a progressive theory of human frailty that is not about fallenness but about compassion and empathy. Such a theory doesn’t have to have the particular elective affinity I’m about to describe, but for me it dovetails with atheism: this is all there is, so dammit if we hadn’t better treat each other right. ‘Cause we’re all we’ve got.

Anyway. To me this is the soil from which a democratic philanthropy grows. Visions of wealth accumulation and human frailty, reclaimed from partisan clutches, put in service of human flourishing in the here and now.

So thank you, Albert, for stirring my (slumbering?) moral imagination.

Money Money Money

Thursday, November 10th, 2011

I had a friend in college whom I met again while about to enter grad school. He’s one of the book-smartest people I’ve ever met, just brilliant at making connections among all sorts of diverse intellectual traditions and disciplines: computer science, philosophy, literary theory, evolutionary biology – it was all one big playground for his mind. And he said the darnedest thing to me when I described my nascent career in philanthropy. This was more than ten years ago, so I have to paraphrase, but the gist was, “I thought about being a professional do-gooder, but then I realized, much better to get rich and then direct the funding to what I think is important.” Of course, that imperative to donor-directed giving is all the range now, but what struck me was the sequencing: smart, progressive people should get rich, and then use that power to do good.

I think about that conversation often, because it’s becoming clear in the current 99%/1% discussion that progressives have a real ambivalence about getting rich. Not being rich, getting rich. Put another way, what is the progressive theory of wealth accumulation? (Separate discussion needed about tech wealth and the cult of Steve Jobs.)

The libertarian economist Tyler Cowen responds to progressive blogger Matt Yglesias’s post on this topic, and the comments on Cowen’s post are well worth browsing – much more light than heat than is usually the case in comments sections.

For me, what it’s about is this: under the current, rigged set of rules, those who succeed the most are rewarded inordinately, all out of proportion to their level of achievement. It didn’t always used to be this way: the ratio of pay between CEO and worker didn’t used to be so absurdly high. (There was a very interesting piece in New York magazine a few weeks back about how Mitt Romney is to a degree behind this change, from his management consulting days.) But these days, if you hit the jackpot, the multiplier effect is astronomical. That’s wealth that could have been distributed differently, more broadly. And it used to be, under good old red-blooded American capitalism. But the game is rigged in a way that rewards the 1%, kind of whether they want it or not. Don’t hate the player, hate the game? I dunno.

To me, this starts to get at the heart of the discussion, and opens up some space to think about the role of philanthropy in helping to promote certain framings and certain incentives. Not sure what that looks like yet, but I picture a small flame in a room full of gusts of hot air, and the need to cup your hand around it so it doesn’t get snuffed out. What does a positive, progressive theory of wealth accumulation look like, and where does philanthropy fit in the picture?

I Don’t Want to Spoil the Party

Thursday, October 6th, 2011

Had to choose a Beatles song title for this post title….

I’m kind of baffled by the fervor of the mourning for Steve Jobs. I mean, I’m writing this on a Mac, and we’ve gradually, consciously migrated to pretty much all Apple products over the past few years, but come on, people, he’s a corporate CEO. I thought these guys were meant to be the enemy – not genius/visionaries/etc./etc./etc. It’s interesting how ambivalence about success and wealth get transmuted when it comes to technology, particularly Internet technology. As if creating the tools for organizing absolves you from scrutiny.

Anyway, it’s notable that this outpouring should be happening the same week as Occupy Wall Street. Because so many of the quotes circulating on Facebook from Jobs are about defiant, damn-the-torpedoes individualism. “Think different,” don’t accept the inherited structures, stick to your singular vision no matter what, civility and protocol be damned. There’s become a romance to a kind of individualism that borders on solipsism – only I matter, my point of view is so singular that I must be heard in all my uniqueness, etc., etc. (Yes, I realize this is ironic coming from a blogger.)

Occupy Wall Street – whose statement is extraordinary and merits scrutiny, including critical scrutiny – is about not accepting inherited structures, but articulated in a much more collective, inclusive mode. Rather than cloaking their methods in mystery and parceling out information in cultish semi-annual rituals, these folks operate in the open and organize without hierarchy, in public. It’s the difference between rejecting inherited structures in favor of more of the same (accumulation of wealth), but for me, and rejecting inherited structures in favor of something different, for the rest of us.

It’s odd and perhaps telling about this moment that two models of social action, of being in the world, that are superficially so similar and yet ultimately so opposed should co-exist – even within some people’s minds.

Let’s appreciate Jobs’s contribution, but ultimately put it in its place. He made a tool. What matters is how it gets used. The medium is sometimes NOT the message.

It’s a Hard Rain’s Gonna Fall

Wednesday, September 28th, 2011

“As Scorn for Vote Grows, Protests Surge Around Globe”

So goes the front-page headline in today’s NYT. The gist is that Millennials around the world, from Spain to Israel to India, are rising up in direct protests within regimes that were meant to have afforded democracy. “They are taking to the streets, in part, because they have little faith in the ballot box.”

All right, it’s time to review the difference between procedural and substantive democracy. Procedural democracy means that the rules are in place that can guarantee fair outcomes, substantive democracy means that fair outcomes do happen. It’s no accident that procedural democracy is the version that people have in mind when they talk about “democratic capitalism,” as the NYT article does. The heart of procedural democracy is free and fair elections. (Don’t get me wrong – this is a huge achievement in human history. The voting booth is like a pew, you should be reverent and grateful in there.) Freedom of expression, freedom of religion. But that’s basically it.

It’s a sham. When the outcomes don’t go your way, that is. Substantive democracy means that the rules point in a certain direction. (You know, toward justice.) There’s an analogy to dimensions of human rights. Just as democratization has generally meant the installation of procedural democracy, the most progress on human rights has been on civil and political rights – the right to vote, etc. But many human rights advocates have been pushing for while for a further dimension of human rights: economic and social rights – the right to a living wage, health care, etc. These are part of substantive democracy.

Again, don’t get me wrong – go procedural democracy. One thing at a time, gradualism, politics as the art of the possible, etc.

Except, bullshit. That’s what the people on Wall Street and in the tent cities in Israel and Spain, and the hunger striker in India are saying. Bullshit. Why wait? Justice now, economic and social rights now, substantive democracy now. Especially when the capitalism side of “democratic capitalism” is so manifestly rigged. Makes the other side feel rigged too.

Who are we to say any different?

Only a Fool Would Say That

Thursday, September 15th, 2011

This has to be the most bizarre case of “I told you so” ever, but here goes.

Interesting piece in the NYT (hat tip to Bowen Chung) about a speech at a Tea Party convention where Sarah Palin (!) trotted out an coherent (!!) set of ideas (!!!) that actually make sense (!!!!) and some of which I agree with (the ! key just broke). As I wrote exactly a year ago today:

I think the privileging of local knowledge is a bipartisan issue, or a cross-cutting cleavage, one that elements of left and right can agree on.

From the right: lefty-liberal plans for social engineering are based on the fallacy that human nature is perfectable, and subject to rational planning and persuasion. But the truth is man is flawed by nature (or by original sin), and top-down approaches don’t take into account local realities. “Unintended consequences” are the inevitable byproduct of social engineering, and can be avoided by greater reliance on market dynamics. It’s hubris and folly for a central government to try to plan an economy, much less dictate cultural norms that have developed idiosyncratically over time in local communities. As Ronald Reagan said, “The ten most dangerous words in the English language are, ‘Hi, I’m from the government, and I’m here to help.’” (Quote from this New Yorker article, toward the end.)

From the left: the corporatization of culture, food, and everyday life are a homogenizing force that threaten to erase the diversity that make our communities and nation great. “Grassroots community organizing” is a way to empower everyday people to make their voices heard and have a positive impact on the conditions of their lives through obtaining changes in policy, whether local, state, or federal. To be a locavore is to reject the evils of factory farming, which is an environmental disaster, an animal-welfare nightmare, and a public-health time-bomb. Eat local, know your farmer, avoid GMOs, celebrate the diversity of a specific place.

What they agree on: Top-down solutions are bad, bottom-up initiatives are morally and practically preferable.

Now comes that word that Sarah Palin argued, at a Tea Party event, that there’s a permanent political class, that it’s in the pocket of big business and big government, and that “corporate crony capitalism” is choking economic and political progress in this country by keeping small business down.

I doubt that as the author goes on to suggest, these are signs of a political realignment, but geez, wouldn’t that be something?

Now if you’ll excuse me, I need to deal with the pigs that just flew out of my, um, symbol for the Democratic Party.

[post title/song title in honor of the great Steely Dan concert we went to last night.]

Cuts Both Ways

Thursday, September 1st, 2011

Last time, I was fretting about the counter-majoritarian nature of philanthropy, coming to the conclusion that maybe it’s not such a bad thing. There are such things as democratic failures, and it can be good to have a corrective element in the ecosystem – albeit not in a dominant position.

The latest kerfuffle in the nonprofit space is about the for-profit company GOOD buying the non-profit social network Jumo. People have fretted about it, said “get used to it,” said, “actually, there’s something more interesting going on over here.” There are valid points made in this discussion about getting beyond the superficial discussion of tax status.

But the real issue is remembering why there’s a “nonprofit” sector in the first place (however you want to label it). And that’s because there are some things for which there are no “natural” markets. Robert Kuttner pointed this out years ago, that the “markets” for health care and labor are fundamentally different from markets for other kinds of commodities because the former are about human beings and the latter are generally about physical objects. Human beings have a unique moral status, so it simply doesn’t work to treat them like any other widget, no matter what the textbooks say. Those markets will always be different and always inherently political.

It follows that there are areas of human endeavor where market dynamics will not function in the same way. Think of it like the upside-down mountains in Avatar whose magnetic field throws off conventional instruments. Our basic assumptions about how markets function – rational actors optimizing utility defined in terms of immediate material gain, etc – are called into question. Our tools – our business plans – don’t work in the same way; input A, instead of generating output A, leads to output Q. Behavioral economics helps here, but there’s something more needed.

I’ve written about the imp of the perverse, that dark impulse that leads people to do things against their own self-interest. And about how our theories of human behavior are just so boring.

The problem is, there are just some areas of human endeavor where money isn’t the point. The profit motive isn’t enough to motivate action. Something more has to get people to do it. And that something else is like a flame; it can grow, it can spread, but it can also go out. It may endure as embers, waiting to be rekindled, but its going out spreads a chill, dims light, causes the huddled crowd to disperse.

The [insert a better word for nonprofit] sector is where that flame is kindled. My mentor Jeff Weintraub points out that what gets called “civil society” or the third sector actually has two components: civil society, the realm of private business for private gain, and political society, the realm of collective action for collective gain that is not as all-encompassing at the state. Political society is where advocacy happens, where organizing happens, where (shudder) political parties exist. We conflate civil society and political society – however we label them – at our peril.