Monday, May 24, 2010

Michael Edwards: the danger of business approaches in the not-for-profit and civil society sector

"No lasting change has been successful without large numbers of people acting consciously and collectively around human values of solidarity and social justice, not market values. Markets are great ways to do some things, but not to fashion communities of caring and compassion"
Michael Edwards Small Change: Why Business Won't Save the World.

It has become tiresome to hear the cliche that not-for-profit and civil society organisations should become "more businesslike", that they should operate more like business and be remodeled along business and market lines. Frankly, it is a ludicrous and dangerous claim.

Most times it reflects a naive understanding of not-for-profit and civil society organizations and is predicated on the false assumption that such organizations are run by well intentioned amateurs who need a dose of "business thinking" to be more effective and effective. My view has always been that the reverse is in fact true. Business and corporations would in fact benefit more from the values, principles and practices of many not-for profit and civil society organizations.

In his new book Small Change: Why Business Won't Save the World Michael Edwards questions the wisdom of applying business and corporate thinking in the world of NGOs and civil society. Michael Edwards's book should be required reading for any one working in the not-for-profit and civil society sector(s). Edwards, who has spent over three decades in the not-for-profit and civil society sectors in the USA, UK, Europe and internationally, has published widely on the sector. His book Civil Society is acknowledged as one of the seminal works on the role of civil society and citizen action in democracy and public life.

Small Change is a wise and radical book that challenges many of the taken for granted assumptions that dominate thinking and practice in the world of not-for-profits and civil society. Edwards argues that business and market thinking has too much influence over not-for-profit organisations and civil society groups.

Edwards rejects the role of markets, business and business thinking as solutions for the social ills of society and the challenges facing the not-for-profit and civil society sector. He contends that civil society and NGO groups must turn away from the lures of the market and business and reassert the importance of independent citizen action. He is deeply skeptical about importing business approaches into the nonprofit sector.

Edwards argues that while market approaches can improve access to goods and services, confronting inequality and injustice head-on requires advocacy and system change.

In this book and an earlier monograph and articles Edwards critiques what he called philanthrocapitalism- the belief that markets and business can create lasting social change and that philanthropy from wealthy individuals and corporate sources that is guided by the values and metrics of the corporate world is a force for positive and just social transformation.

In Australia we see a growing body of powerful and influential philanthrocapitalists who claim to be putting their money to work to achieve socially transformative goals. As Edwards points out what is missing from their work is any genuine systemic change that addresses social injustices and inequities in fundamentally significant ways.

Here are just some of the lessons to take from Edwards masterly work
  • Philanthrocapitalism concentrates power in the hands of a few major players, mirroring the very inequities not-for-profits and civil society organizations should be trying to ameliorate. With a vested interest in the status quo it shies away from fundamental change. At most all it can promise is valuable but limited advances: small change.
  • Markets and business cannot be fundamentally reformed to serve social purposes in the way that their proponents claim
  • What seems inefficient using market and business criteria is essential for the social and political impact of not-for-profits and civil society
  • Most business metrics and business practices are at odds with the social goals and social transformation that not-for-profits and civil society organizations aspire to.
  • Achieving social transformation and change requires cooperation not competition, collective action rather than just individual effort and support for long term systemic solutions rather than immediate results. Business and business models promise only limited advances in addressing society's inequities and injustices.
  • Business and business values are ill equipped and unable to address the core issues of concern to many not-for-profits and civil society groups.
  • The adoption and use of business models and market thinking can and does corrupt the core mission, purpose and values of NGOs and civil society.

1 comment:

Erik Leipoldt said...

Too true! In the current push for a public premium-funded fund for disability services in Australia, the motivation to save government ballooning expenditure in this area and services from underfunding; economic/business ideology of efficiency through competition in the market; meeting demand rather than need; marrying legitimate desires for greater choice, control and attention to individual need to individual consumer preferences/choices in a 'care' market threatens to take us back to segregated/congregated care 'options' in a national funding approach that should be about meeting needs of vulnerable people but in reality meets the needs of treasuries and care 'industry' first. Economic language is so dominant that many do not see the corruption of care in this process. Or, the pornography of care, as a naturallly beautiful act is objectified, measured, costed and sold, leaving only an unsatisfactory and false image of it.