Tag Archives: philanthropy

Beyond 3D: The Emerging Fourth Sector

photo credit, JamesWatkins via Flickr

Again this summer, I attended the United Community Services Human Services Summit here locally, a gathering of a couple hundred human services professionals, this time to talk about major trends in our communities that will impact the demand for and delivery of human services in the coming years.

I participated in a discussion about rising poverty in the suburbs, which was certainly interesting (and, of course, gave me an opportunity to do my usual “solving poverty is a question of political courage, not technical ability” speech, so that’s always welcomed!), but I found it notable that one of the trends offered as a choice to participants failed to garner enough interest to be one of the areas of discussion for the breakout groups: the rise of alternative organizational models in human services.

Now I am by no means one of the experts on social enterprises and other manifestations of these different approaches to organizational structure and governance in human services. But I have noticed the impact of this trend on my students, and, therefore, on my own thinking about organizational approaches to solving social problems, in a couple of significant ways:

  • While most of my students still go to work for “traditional” nonprofit organizations, I have had a few recent graduates find work in the for-profit sector, either in the realm of privatization or, more recently (and more importantly, for this discussion) in pretty straightforward for-profit companies that are developing new social benefit enterprises, and want social workers on board to help guide those.
  • Regardless of where they work, social work graduates, particularly those in administration, are called on to have more traditionally ‘corporate’ skills, related to financial management and articulation of impact, than in the past. Sometimes, social work education fails to adequately prepare students for these demands.
  • I’ve had several conversations lately with, in particular, some of my more recent social work graduates who are chafing at the confines of the divisions among types of organization and who find categorizing organizations based on their purpose, rather than their tax structure, a much more useful distinction.

    It was in light of these developments, and the apparent lack of much interest in them by these local leaders in social services, that I read with interest the report by the Fourth Sector Network, The Aspen Institute, and the W.K. Kellogg Foundation–The Emerging Fourth Sector.

    Here, they’re defining this fourth sector, and the organizations that comprise it, as a new class of organizations focused on sustainability–“lasting economic prosperity, social equity, and environment wellbeing”, incredibly diverse in their structures and areas of emphasis, but united by their pursuit of social goals/purposes through the method of engagement in business activities. They might be nonprofit social service organizations developing businesses in order to fund their mission work, or for-profit companies committed to democratic governance, fair compensation, transparency, and social/environmental responsibility, or some sort of hybrid in between.

    As this report defines it (and this is what really caught my eye, given some of the discussion on this blog about what we should call the organizations where we do this great work), this fourth sector is the “for-benefit” sector, which holds a lot of appeal for me, since, after all, what organizations do (and achieve) should matter a lot more than what their tax status is.

    So, what does this mean for social workers? There are two key pieces, I think:

  • This fourth sector currently lacks the infrastructure and regulatory environment needed to support this type of organization, and this kind of support will be essential if for-benefit organizations are to achieve their full potential. This means that we have to think about advocacy beyond on our issue areas (mental health, child welfare, poverty) to affect the tax, corporate, and nonprofit policies that provide the foundation (or fail to) for the kinds of strategies that we want to pursue in order to impact social problems in all of those fields.
  • Social workers (and others) will need to be able to cross sectors–with a common language and transferable skills–in order to flourish in the fourth sector. Given how hard we find it, sometimes, to work even with others, within our own profession and working in the same types of organizations, this won’t be an easy lift. We need to get comfortable working with for-profit organizations (which, obviously, doesn’t mean the same thing as blindly accepting their practices and objectives!). We need to think about cooperatives and social enterprises and civic initiatives, and how those structures might be good adjuncts, perhaps, to our more traditionally-structured 501(c)3 organization. This will require, of course, changes in social work education, and also an openness to change that, quite possibly, will be facilitated by the infusion of new nonprofit leadership (and the entrance of those Millennials) expected in the decade to come.

    At its heart, I think discussions like these, and like those I’ve been having with students and practitioners and (through social networks) “social enterprise thinkers” over the past several months, boil down to the truth that what we call ourselves, at the end of the day, doesn’t really matter.

    All that matters, or should, is what we can call our work.

    If that’s “good”, then the rest is just details.

  • Philanthropy and Government: Perfect Strangers or Bosom Buddies?

    So, yes, the title of this post does reveal the last decade in which I regularly watched television. Thank goodness for my students, who let me in on secrets of the modern world, like those Real Housewives shows that I first thought they were joking about!

    This week, while my students are keeping up with American Idol (is that even still on?) so that I don’t have to, I’m blogging about a somewhat random collection of reports and analyses about the worlds of philanthropy, advocacy, and social entrepreneurialism, I guess so that you don’t necessarily have to read them!

    Today’s report is from Grantcraft, and it relates to something that’s of significant interest to me–the “best” relationship between private philanthropy and government, in the pursuit of solutions to our most vexing social problems. Getting this right is tremendously important, because of what both philanthropy and government bring to the social problem-solving enterprise: the former innovation and a capacity for risk-taking, in particular; and the latter the fiscal resources and legislative authority to institutionalize the most promising strategies discovered in the philanthropic world.

    Or, at least, that’s how it could/should/WILL work!

    This particular survey solicited the insights from more than 1500 grantmakers, about not just how they’re currently working with government (or why they’re not) but about how they envision this relationship, and what they see as the best strategies for engagement without co-optation  and mutual challenge without devastation of the relationship.

    Some of they key findings, that I believe have implications for how we view philanthropy and government as complementary forces for good:

  • Foundations are working with governments on many levels; in at least some cases, this means building skills and relationships at more local levels first, the same way advocates can.
  • Foundations see advocacy as a critical piece of their relationship with government (in terms of providing information, informing policy debates, and trying to shape policy approaches). This is a critical insight both because it suggests that at least some foundations are committed to playing an advocacy role AND because it correctly characterizes advocacy as part of a partnership with government, rather than an inherently oppositional activity.
  • There is a distinction between collaboration and coordination: the latter seeks to build understanding on both sides about the other’s work, and to find ways to work together, while the former may increase the risk of co-optation. The respondent grantmakers emphasized their role in criticizing government, as a sort of “loyal opposition”, that, if more vigorously pursued, could, I believe, create more space for nonprofit organizations (dependent on both foundations and government for financial survival) to engage in such critique, too.
  • Perhaps the part that made me the most encouraged in the survey was the strong opinion, expressed by several respondents, that philanthropy has to be on guard against being used as “cover” for government’s abdication of its core responsibilities, as part of the social contract between a citizen and his/her state. A direct quote: “we need to be sure that we’re not being used to fund programs and activities that the government should do.”So nothing like kicking the week off with optimism, right? About the enthusiasm and acumen with which at least some grantmakers evidently approach their interface with the government, and about the potential that such a joining of forces has to provide some real momentum in our struggles for social justice.

    And you can still check out the report for yourself, unless the title has you longing for some 1980s TV

  • Philanthrocapitalism, Part II

    So you read yesterday that I might be coming around, at least a little, to this idea of the role that philanthropy, at least that which is strategic, focused on solving serious social problems, and embedded in a truly progressive tax code, can play in our quest for social justice.

    So you knew that there was a “but”. And here it is. The ironic thing, though, is that some of these very same ‘philanthrocapitalists’ are offering the same cautions, the same caveats, to which I now turn. Maybe there’s hope for me to be a billionaire someday after all. Or not.

    I love it that Bono told the authors of Philanthrocapitalism, “as great as some of the philanthropists in your book are, the real change comes from social movements” (p. 12). And it appears that he’s not alone. “A growing number of philanthrocapitalists are realizing that one of the most effective ways to leverage their money to change the world is to use it to shape how political power is exercised” (p. 240). Exactly. And that’s the point about this new emphasis on the new philanthropy that advocates of social justice cannot afford to forget; there is no way that people in poverty, those who have been excluded and marginalized around the world, will ever get what they truly deserve as a voluntary donation from those who have so much. AND, there’s no way that we’ll solve the serious social problems facing our planet (or even just our community) with just a collaboration between people in need and even the most enlightened rich person; we need the resources of our public structures on our side too.

    And only movements move those mountains. The kind of movements that a reliance on philanthropy will subvert.

    Social work has to acknowledge our own less than pristine history in this area: The Charity Organization Society, part of the heritage of our great profession, worked in Victorian England to keep government out of the business of helping the poor, arguing that such work was best done by philanthropy (and, of course, them). Even today, social workers can be guilty of that attitude–discouraging the kinds of universal approaches that seek to prevent social injustices because they may erode the need for our professional intervention. And we are willing to overlook the unscrupulous business practices of companies that write checks for our fundraisers, play up to the foundations who make us jump through unreasonable hoops, and rationalize spending way more time applying for grants than trying to change the world…because that’s the way that the system works now.

    So the part of the discussion about this new philanthropy that excites me the most is that, increasingly, philanthropists and foundations seem to get this, seem to know that they can’t do it alone, and seem willing to invest in trying to seed the kind of social change that can set the stage for real transformation. The Gates Foundation partnered with other donors to build the Ed in ’08 Campaign, an effort to put nationwide education reform at the center of the 2008 presidential campaign. They largely didn’t succeed, but, then, that’s sometimes how agenda setting starts. They’re not backing away from it, though, claiming that advocacy on several issues will be an increasingly critical part of their strategy in the coming years. The Omidyar Network’s (my husband thanks you for eBay, by the way) investment portfolio includes strengthening governments, in the belief that “effective government is crucial to social impact”. It even gave up tax advantages in exchange for the ability to engage in political campaigning to advance its goals. The Skoll Foundation has taken a more indirect route, making movies with a social message to change the public debate.

    I’m not worked up about this philanthropic engagement in politics and governmental reform being “an age of plutocracy”. Seriously–isn’t there ample evidence of the far more malicious role that money is playing in our political system today? It probably goes without saying, however, that this does not a movement make.

    An effort like DATA comes closer, since its work centers around using popular culture to bring people (mostly Millennials) to the anti-poverty cause. And it had significant impact, winning historic debt cancellation and raising the consciousness of a generation. After all, building a movement requires changing people’s hearts, and it’s indisputable that rock stars have easier initial access there than do social workers or community organizers or even charismatic politicians. They can put things on the agenda just by opening their mouths, and sometimes that’s an opening that can spark something far greater than they.

    We still have the make the road by walking. There are no real shortcuts that I’ve ever seen. But if philanthropy is increasingly willing to stock the rest stops along the way, and pack our backpacks with some of the provisions we’ll need, and buy us a really good map, well, then, we just might get there a little more quickly.

    Or, what, am I just going soft?

    photo credit, wobblycity, via Flickr

    Philanthrocapitalism, Part I

    I’m a social justice gal. That means I don’t really do “charity”. I have one of those, “Give a man a fish, and he’ll eat for today. Teach a man to fish, and he’ll eat for a lifetime. Until the waters are polluted and the fish all die. Help him to organize with his peers, and he’ll demand all the justice, and fish, they deserve” posters. Yes, the print has to be small.

    So while I monitor philanthropy, because I know that most nonprofits and the jobs of many social workers depend on it, and, while I celebrate advances in philanthropy in the spirit of “something is better than nothing“, and while I’ve certainly interacted with philanthropists as a grantee, I tend to look askance at any thought that reforming philanthropy is the way to change the world. And really rich people kind of freak me out.

    So, that’s why I was really surprised to find myself pulling out tons of sticky notes when I read the book with the rather dubious title of Philanthrocapitalism. But there I was, on page 10, totally agreeing with, “if philanthrocapitalists are to be a legitimate part of the solution to the world’s problems, a new “social contract” is needed to spell out what it means to be a good billionaire, in terms of how much is given and in what way, how much tax is paid, whether the money has been made in a legitimate way, and what the rich can expect from everyone else in return.”

    That obviously raises a lot of questions:

  • What to do about foundations based on money that was not raised in an entirely ‘legitimate’ way (there’s a difference, obviously, in the business philosophy of Rockefeller v. Google)? How do I deal with the reality that it’s hard to be as outraged about how the eBay guy made his billions as Carnegie’s violent repression of the Homestead Strike? And what about holding foundations accountable for their investments today, and the impact those investments may have on the perpetuation of social injustice?
  • How to set tax rates that will compel giving to the public good (one way or another!), because, as generous as some of these billionaires are, does anyone really need $100 million houses? And, connected to below, just because giving to Carnegie Hall may be better than buying another yacht, we shouldn’t settle for that choice–we know how to set tax rates so that really rich people will have to give money away voluntarily or see it taken on Tax Day.
  • How to reform our nonprofit code so that only institutions that truly serve the ‘public good’ warrant deductions? The U.K. is addressing this one with a 2006 Charities Act that may disqualify some of its prestigious schools from tax-privileged status, but we’ve got to ask ourselves whether someone giving to his or her own already well-endowed alma mater or prestigious cultural institution deserves the same tax benefit as someone providing clean drinking water or solving malaria (or funding a local arts institution or providing college scholarships to low-income students).
  • How to harness the entrepreneurial, can-do spirit of some of these philanthropists without riding roughshod over the grassroots leaders and nonprofit professionals whose lives have been wrapped up in these problems for years? For that matter, does every billionaire really need his (or her, but they’re mostly his) own foundation? I’m all for a race to see who can save the world faster, but is some of that overlap overkill?
  • How to bridge the gap that persists, on the ground if not in the minds of these philanthropists, between social enterprise and traditional nonprofit work? How to bring the best that the social entrepreneurs offer–a sharp focus on outcomes and transparency and flexibility and accountability–to the world of social change work, which sometimes is fuzzy and stop-and-go and even obscure, without diluting the former or denigrating the latter?
  • How to build a strong commitment to social justice among these kinds of ‘influencers’ in society, even before they become philanthropists, since that’s what would really begin to change the way that business gets done and governments function? I know, today that sounds crazy, but it’s not without precedent. Changing the rules of that game could go a long way.
  • Instead of turning to philanthropy because innovation is easier there than in government, or because there is a perception of greater accountability or better results, why don’t we pour resources into reforming those aspects of government service provision and social problem solving that we feel aren’t living up to their potential? Why can’t we learn from more of the innovations happening outside of government and seek to institutionalize them so that they’re more broadly available?

    I don’t have any of the answers to these questions. It’s a testament to the rather amazing work that a lot of money is doing around the world that I’m much more willing to listen.