Michael Edwards Responds

In my recent post on Albert Ruesga’s Metrics Mania comments, I mentioned a “growing backlash against philanthrocapitalism”:

At a time when we are seeing a growing backlashing against “philanthrocapitalism”, it is interesting to look at what is being grouped under that term. For many people, “metrics” and the push for more “evaluation” of philanthropy is an unwelcome element of a “business-like” approach to giving. I believe that evaluating nonprofits and philanthropy in general is necessary for a the Third Sector to become a high-performing, high-impact driver of social good. But as I wrote last week, I think that much “evaluation” takes a scientific approach to measurement that is borrowed from the hard sciences, while the lessons of the liberal arts (under which investing and financial markets should be categorized) are more appropriate.

That link in the paragraph above connects to the essay Philanthrocapitalism: After The Goldrush, by Michael Edwards. Edwards is also the author of the newly released book Just Another Emperor: the Myths and Realities of Philanthrocapitalism. Mitch Nauffts at PhilanTopic has written a brief review of the book. I’m in the middle of reading it and will comment further in the future. But in the meantime, Michael Edwards emailed me after reading the post in question:

Nice piece, thanks Sean. However, just so we are clear, it is misleading to conflate the “growing backlash against philanthrocapitalism” with opposition to “a push for more evaluation in philanthropy.” The two may be related in some people’s minds, but not in mine, nor I suspect in the minds of many others who are passionate about measuring social change but skeptical about the role of business metrics. I’d encourage visitors to your blog to read “The Myths and Realities of Philanthrocapitalism” (downloadable for free from www.justanotheremperor.org) and check out the examples of SCOPE, SPARC and Make the Road New York that are described in the book’s conclusion. All of these organizations take evaluation very seriously, and they are developing creative ways to measure their impact on both short-term service outputs and long-term structural or systems change. Isn’t that where the real debate should be?

In reply I wrote:

I found your essay fascinating and I’m about half way through Just Another Emperor. I plan to post about my opinions of your ideas once I finish the book.

Personally, I think that the definitions of the new words being thrown around in philanthropy is really important. I do think that many people see “measurement” as “business-like”. But I’m glad to hear you don’t. I’d like to give you full access to express your thoughts on my blog. From what I’ve read of your writings so far, I do disagree with a lot of it. But that should only make the conversation more interesting! Personally I think that nonprofits and philanthropy can learn a lot from business thinking, but that there are huge limitations to the analogy.

Michael is director of governance and civil society at the Ford Foundation, although his book notes clearly that he is writing “entirely in a personal capacity”. I look forward to the unfolding conversation around “philanthrocapitalism”. I believe that as the Second Great Wave of Philanthropy continues, we are in the midst of a battle over the future of philanthropy. How words get define, what ideas become cultural norms and who emerges as leaders will all greatly influence how philanthropy is practiced in this country.


  1. Meghan says:

    Nothing major to add just yet (I’m midway through the article myself), just a word of encouragement. This thread of posts has been very interesting and helpful as I’m trying to keep tabs on the shifts in public discussion around philanthrocapitalism and metrics. Thanks for it.

  2. Leyla Farah says:

    Before “philanthrocapitalism” became the new trend, “social entrepreneurship” – where organizations founded and ran businesses to fund their social missions – was considered the next wave of the non-profit world.

    In this new iteration, power rests in the hands of the few. The philanthrocapitalists are the ones in charge and are the ones dictating the use of their funds. The earlier model at least allowed for some flexibility for those willing and able to run a business alongside their social mission. In the best case scenario, successful social ventures found themselves unfettered from the requirements of funders who assumed they knew better than those actually running the programs.

    Perhaps there’s a happy medium? The capitalists could help run embedded businesses that provide funds for the organizations who could, in turn, focus on their missions and not have to be business owners as well.

    That way, everyone gets to focus on their strengths – and no one is presumed to be qualified outside of their own area(s) of expertise.

    Leyla Farah
    Cause+Effect – Public Relations with a Purpose