Saturday, August 4, 2012

Fighting the business and corporate takeover of the not-for-profit sector

I have been warning against the corporate and business takeover of the not- for- profit human and communty services for years.

The takeover takes many forms, but is intensifiying as Governments outsource more and more public services and public functions to large corporate providers.

In his book Small Change: Why Business Won't save the World Michael Edwards also warns against the corporate and business takeover of the not-for-profit sector.

A review of Edwards's book has appeared on this blog here.

So I was interested to read this piece by Simone Joyeaux on Edwards's book on the US journal Non- Profit Quarterly. Joyeaux writes:

In sum, philanthrocapitalism claims that the “traditional ways of solving social problems do not work, so business thinking and market forces should be added to the mix.” Or, in other words, “business thinking and market methods will save the world.” (And make a lot of money for a limited number of people, too!) Now that’s where I get stuck, and so does Edwards: the excessive admiration for business thinking and market methods. Let’s see…would that be General Motors’ almost-bankruptcy and the 2010 BP oil spill? I guess all those philanthropic responses to natural disasters, civil rights, poverty, education, the arts—from NGOs and millions of people—don’t count for much? Weren’t sufficiently efficient? Didn’t produce meaningful and long-lasting results?

It’s human to want quick solutions and facile answers. But nonetheless, it reflects a dangerous naïveté and an insulting lack of awareness and understanding about what is required to make change. For example, this philanthrocapitalist approach hopes to fix the problems caused by capitalism. Honestly, I’m not trusting that. This approach fixes problems but doesn’t change the underlying systems like racism or sexism. I want more than Band-Aids; I want real change. Moreover, philanthrocapitalists represent only a small portion of our society, but hold a disproportionate amount of control. That doesn’t work for me. I believe everyone should and must have access.

Philanthropy—and the value of the nonprofit sector—is about social transformation. Edwards justifiably asks, “Can these new approaches transform societies, or do they simply treat the symptoms of social problems in more efficient ways?” I know my answer. What’s yours?

Sure, philanthrocapitalism can make a difference. It can find cures for various diseases and produce jobs. But that doesn’t fix the systemic issues that confront our society—things like greed and inequality, fear and prejudice, privilege and disadvantage. Edwards notes, “Few areas of business expertise translate well into the very complex social and political problems where solutions have to be fought for and negotiated—not produced, packaged, and sold. And, so far at least, there aren’t many philanthrocapitalists who are prepared to invest in the challenges of long-term institution building, the deepening of democracy, or the development of a different form of economy in which inequality is systematically attacked.”

Economic growth doesn’t fix racism, sexism, homophobia, and the fundamental inequities of our world. Economic growth doesn’t fix poverty, either; just look at the growing disparity in income over the last few decades. As Edwards says, “no great social cause was mobilized through the market in the twentieth century.” And I don’t believe that the market will ever mobilize any great social transformation.

But that’s okay. That’s okay as long philanthrocapitalists quit promoting their excessive value and societies stop looking for quick fixes. Business thinking is different than nonprofit sector thinking. Capitalism—even philanthrocapitalism—focuses on the financial bottom line first. The bottom line in the nonprofit sector is different. The bottom line is mission, not money. The bottom line is the common good, not the marketplace’s good. The result is social transformation, not reinforcement of the status quo. Certainly, nonprofits need to follow some good business practices to stay healthy, but the bottom line is fundamentally different.

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