PHILANTHROPY 2173

Monday, December 04, 2006

"Hey, Zeus!" The new myth of philanthropy

Back in the 1960s an important myth was born. Foundation philanthropy was to serve as the "research and development" arm of government.

I've spent a lot of time trying to peel back the layers of this myth. I can trace it to a few programs (e.g. A Better Chance) funded by The Rockefeller Foundation which were picked up by the federal government (Upward Bound). This dynamic was helped along by close personal ties between staff members of the foundation and the Kennedy and Johnson administrations. Similarly, The Ford Foundation funded a few programs which heavily influenced the Great Cities Program and the War on Poverty.

These examples, and one or two others that may exist, occurred in about a five-year window from 1961-66. From this limited sample, foundations - especially those on the center and left of the political spectrum - have built themselves two important myths that shape how they work.

Myth #1: Foundations fund innovation and the public sector implements it ("Foundations pilot and the government replicates").

Myth #2: The myth of sustainability ("Foundations will fund a pilot and the public sector will support it from then on.)

Besides the fact that these myths don't hold true, its high time to dump them for another important reason: philanthropy is busy building itself a new myth.

This time, philanthropy is going to be the "research and development arm" or, perhaps more accurately, "a new investment resource" for the marketplace. How else to explain the remarkable growth in foundation initiatives that seek market solutions - from the Rockefeller and Gates work for a second "Green Revolution," to Richard Branson's bold euphemisms about "giving" his profits to alternative energy investments and the preference for hybrid structures such as Omidyar.net and Google.org. Foundations seem to have confused "sustainable" with "market-supported."

At best, I'm skeptical. The old myth was a myth, this one may be also. And while I think there is plenty of room to innovate in the market to direct additional financial resources to social change, rearranging the equation so that philanthropic innovation provides more resources for the marketplace may solve problems, but not the ones that matter.

Second Life Nonprofit Podcast

This link will bring you to a podcast interview with "educators and activists who have discovered that a Second Life can change their first one."

Sunday, December 03, 2006

Philanthropic drop outs?

The pile of New Yorker magazines by my bed is almost two feet tall. When I do get a chance to read the magazine I reach in, grab a copy, and indulge without bothering to look at the date. Given the height of the pile, the issue might be from any week in the past three to six months. Which adds to the fun of reading "The Talk of the Town section," for which timeliness often matters and which I invariably read with the benefit (or pain) of hindsight.

Dorothy Wickenden's column, "Top of the Class," from the October 2, 2006 issue didn't turn so much on "the moment" in which it was written but on the moments to come that it brought to mind. In brief, her piece addresses the decisions by Harvard and other Ivies to end the early admissions process which so blatantly favors elite kids with deep familial awareness of how the system works. It is an attempt to end, as Wickenden puts it, "reverse affirmative action."

And it won't make much difference, she goes on to argue. The system is heavily weighted against children from poor families and/or first-generation college applicants. She quotes statistics from The Century Foundation that note only 3% of students at the nation's 146 most competitive colleges come from "families whose level of education, jobs, and income put them in the bottom socio-economic quarter." (p. 35)

What really struck me, however, was still to come. Noting elite colleges' preferences for legacy students and those whose families might significantly add to the endowment, Wickenden notes:

"...And its certainly not the colleges fault that the financing of education for the less well-off, like so much else these days, is being increasingly left to the private sector....Congress is more beholden than academe to its wealthiest contributors, and more willing to compromise its principles - like equal opportunity - that its members claim to cherish.' (p. 36)

This reality is truly depressing. This is a broken system. And I think more damage is on the horizon. This Sunday, the San Francisco Chronicle ran a story about tech entrepreneurs "dropping out (of school) and cashing in." As the story notes, quoting Paul Saffo of the Institute for the Future, "Everything that would get you detention in school will get you funding in Silicon Valley."

More and more often the biggest fortunes are being made by people who don't stick around for degrees - witness Bill Gates, Larry Ellison, Steve Jobs and Michael Dell.* The Google guys finished college but dropped out of grad school.

Soon it seems, the whiz kids who hit the biggest financial jackpots won't even have alma maters to dote on. Then we'll see what happens to early admissions at Harvard.

*At least Gates and Dell have focused much of their philanthropy so far on education, both K-12 and higher education.

The "to be read" pile

A few posts back, I challenged readers to use del.icio.us to track their reading material. My tag cloud captures mine, and you can "subscribe" to what I read by logging into del.icio.us and subscribing to "lbernholz."

In the meantime, here are some recommendations, "the old fashioned way" - good old hyperlinks.

Complex problems need complex solutions. Foundations that understand this are increasingly including policy-focused or advocacy efforts in their program strategies. But how do you know if these investments are paying off? The California Endowment has published two reports on evaluating policy and advocacy activities (written by Justin Louie and Catherine Crystal Foster, my colleagues at Blueprint). Both reports are available here.

The Stanford Social Innovation Review has a story that shows off some of the coolest applications of technology to social challenges. Check out John Voelcker's story "Creating Social Change: 10 Innovative Technologies." (subscription required)

Bruce Sievers, of "flying pigs" fame, raises 8 questions about the Buffett/Gates gift.