Posted on February 16, 2010
Small Change: Why Business Won't Save the World
(New York, NY : Demos, 2010)
PND - Small Change: Why Business Won't Save the World
Almost two years after making a splash with Just Another Emperor? The Myths and Realities of Philanthrocapitalism, Michael Edwards returns with Small Change: Why Business Won't Save the World, to remind everyone about the dangers of introducing market forces and business thinking into social change work. Given the high profile of contemporary philanthrocapitalists such as Bill Gates, Warren Buffett, Bill Clinton, Pierre Omidyar, and Jeff Skoll, it may seem like a quixotic, even foolish, endeavor. But Edwards' critique is not without merits.
Currently a distinguished senior fellow at Demos, a nonpartisan public policy research and advocacy organization based in New York City, Edwards served as director of the Ford Foundation's governance and society program from 1999 to 2008. Prior to that, he worked for a number of NGOs, including the World Bank, Oxfam-GB, and Save the Children-UK, and that experience allows him to see past the celebrity and fawning attention paid to many of today's mega-wealthy philanthrocapitalists. Indeed, his perspective is that of the progressive activist for social change who knows all too well that hundred of billions of dollars a year are channeled to tax-exempt organizations in the United States, but only "5.4 % of philanthropic resources are spent on activities defined as [having] public and societal benefit." Which leads Edwards to ask: If philanthrocapitalism is going to save the world, where's the proof?
Distilled to its essence, Edwards' answer to his own question is simple: Creating real social change while focusing on income generation are different and almost entirely incompatible objectives. In part, that's because the tangible results that business metrics strive to measure do not always accurately reflect the often intangible benefits produced by a good many nonprofits. Small Change is filled with stories of how well-intentioned but ultimately misguided business practices have led organizations astray and even caused them to fail. Moreover, writes Edwards, while philanthrocapitalism assumes that market-based competition will make nonprofits more efficient and lead to greater social change, such an approach "is a particularly damaging form of social Darwinism that misreads the way social change actually occurs." According to Edwards, business principles tend to force organizations to specialize instead of diversify. But "it's the difference that makes the difference to society," says Edwards. "In the real world," he adds, "there is no seamless weaving of competition and cooperation, doing good and doing well, sacrifice and self-interested behavior. If something seems too good to be true — like securing social justice by becoming a billionaire — then it almost certainly is."
Edwards isn't totally disparaging of efforts of philanthrocapitalists; he acknowledges that the business thinking and practices that brought them wealth have also been drivers of huge technological and commercial innovations that could be applied to social change. But he suggests that philanthrocapitalists should apply their skills to roles they are better suited for, such as "using the market to increase access to useful goods and services [and] fostering healthy and sustainable economic solutions [that]...lay the groundwork for social transformation." It would appear to be the perfect compromise: a division of labor that directs resources where they are most needed and best utilized, while fostering a sense of cooperation instead of competition among different sectors.
Alas, while it's a message that's sure to resonate with many of his readers and Edwards' arguments are well supported, Small Change does not add much to the conversation. That's because "parts of this book," as Edwards notes, were included in Just Another Emperor. Quite the understatement when one realizes that much of that book has been incorporated into this one, even though the newer volume is better organized than its predecessor and includes minor updates such as how Barack Obama's successful use of grassroots campaigning can be seen as a sign that civil society in the United States may be on its way to recovering its "sense of purpose and self-confidence."
That said, Small Change is useful as an introduction to the lively debate happening around the concept of philantrocapitalism and will help the general reader understand the tension and tradeoffs between mission and financial sustainability that every social change organization must deal with.