Posts Tagged ‘Michael Edwards’

Collaboration or competition? Let the nonprofit sector answer that question

Join us for the final installment of our interview with Michael Edwards about his book, Small Change: Why Business Won’t Save the World. In this portion of the interview, find out where you can follow the debate about philanthrocapitalism, and learn more about Edwards’ views on collaboration versus competition.

CausePlanet: The notion of philanthrocapitalism sounds like the next new great idea at first blush—especially to those who haven’t read your book. Are there any blogs, newsletters or periodicals you would recommend that provide an ongoing, unbiased evaluation of philanthrocapitalism as it evolves?

Edwards: That’s a tough call, though I’m already beginning to see more pushback, constructive criticism and healthy debate about these questions. It’s still very difficult to be honest and open about this stuff because of a justifiable fear of offending the donors, and there’s a huge industry of advisers, consultants and bloggers who act as an echo chamber for the philanthrocapitalists and their views, often in ways that are quite divorced from the day-to-day concerns and experiences of the nonprofit community. But I would definitely recommend The Nonprofit Quarterly, for example, which does speak up and is not afraid to take up the difficult questions, and Blue Avocado. The National Committee for Responsive Philanthropy is also very good, and the Chronicle of Philanthropy publishes opinions on both sides of the debate.

CausePlanet: Everyone talks a big game about collaboration in the nonprofit sector, but many nonprofits still don’t believe that a rising tide lifts all boats despite positive examples. You support collaboration by way of addressing businesses’ misguided favor of competition among nonprofits. Can you explain?

Edwards: This is one of the most contested issues in the debate over philanthrocapitalism, and it’s partly down to language. If “competition” simply means doing one’s best for the causes one believes in, or striving to be the best that we can be, then it would be odd to argue against it. But if it means competition in the formal, business sense of building market share against other providers, often by driving prices down and profits up, then I think that’s very damaging to the nonprofit mission of securing equal rights for all. After all, you can’t have too much social justice or compassion, and securing things like that requires a rich diversity of organizations acting like an ecosystem so that the whole is more than the sum of its parts. The elements of an ecosystem co-exist in a mutually-supportive relationship, they don’t compete. Obviously, nonprofits have to secure resources in environments where they are scarce, but that doesn’t mean that competition should define the sector and its work.

CausePlanet: What factors characterize high-performing, appropriate collaborations between philanthrocapitalists and nonprofits?

Edwards: Honesty, humility, authenticity, self-criticism and an equal valuing of what each has to bring to the table. Those qualities may be absent from many current collaborations (which are very one-sided, reflecting the power imbalance and structures of privilege that run through much of philanthropy), but they determine whether enough common ground exists to make the work effective, to set it on the right road, and to monitor and address any problems that arise along the way. There’s a saying from the foreign aid world that I think is relevant here: “If you have come to help me, go home now. But if you have come because your liberation is bound up with mine, then let’s get to work.” That captures the spirit of equality and mutual learning that all successful collaborations require. But that is very demanding, because it requires openness to change—deep, personal change—on both sides.

For more information about Small Change, visit Michael Edwards’ site at www.futurepositive.org. For the complete interview and summary, visit our summary store or subscribe to our monthly summaries of Page to Practice. Or, you can keep up with what we’re reading on Facebook and Twitter.

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What should you ask yourself when considering a corporate partnership?

Michael Edwards’ book, Small Change: Why Business Won’t Save the World is our feature this month and is an essential read for any nonprofit that’s engaging businesses with their mission. We offer another compelling excerpt below from our Page to Practice interview.

CausePlanet: Your book makes a terrific case for nonprofits staying out of the business of market strategies to create social change. What advice would you give a nonprofit CEO who would like to disengage a business partnership but faces unanimous opposition from the board?

Michael Edwards: At the moment, market-based strategies are much in vogue, and there’s a huge amount of hype about their impact and effectiveness. Board members obviously listen to that hype and want to become involved, perhaps without delving very deeply into the costs and benefits of these strategies. So I understand the question that you’re raising. I think the way to approach this question is NOT through blanket opposition, which just seems defensive, but through a principled and pragmatic analysis of the nonprofit’s mission and how best to promote it in a rapidly-changing world. There is already plenty of evidence that shows how a mission for social change can be damaged by the adoption of market-based strategies, but often nonprofits don’t know about it, or don’t mobilize it in and for their work. Board members aren’t stupid, so if they see that something isn’t working for their organization and others like it, they are usually open to discussing why that is.

CausePlanet: The allure of a large gift from a philanthrocapitalist is very powerful for a nonprofit organization—especially because their methodology makes sense in the corporate world. What questions should nonprofit leaders ask of themselves or the philanthrocapitalist to determine if the collaboration is appropriate?

Michael Edwards: Money always has a “steering effect” on the organizations that receive it, especially if it comes with strings attached, and those strings are often quite tightly-wound by “philanthrocapitalists” because they believe that close guidance is essential for success. After all, that’s a basic lesson of venture capital investing and supply chain management, even though it’s incompatible with the freedom and flexibility that nonprofits need to respond effectively on the ground. So, nonprofit leaders should ask themselves what trade-offs are acceptable in each situation, and how far they are prepared to go in making compromises in order to unlock these new resources. Sometimes these trade-offs will be manageable through careful negotiation with the donor, but at other times the best option may be to forgo the gift entirely. That’s a tough choice in today’s economic climate, but growth isn’t always the best path to impact.

CausePlanet: In chapter four you identify only two ways that businesses should safely collaborate with nonprofts: 1) delivering social and environmental services; and 2) strengthening the financial management of nonprofit organizations. Are there any potential pitfalls nonprofit leaders should try to anticipate with these recommended channels?

Michael Edwards: I think that depends on the mission of each nonprofit. A community organizing or campaigning group, for example, may need little of either of these two things, though no doubt we could all benefit from stronger financial management. Over the last ten years, nonprofits have been pushed further and further towards service-provision as their core mission, and away from the social and political work of civil society. I think that’s a real problem, because it’s that social and political work that creates the biggest impact over the long term (think of the Civil Rights movement, for example, or the mass membership groups that pushed the federal government to pass landmark social legislation after World War II). So, I want nonprofits to recover that part of their mission at every opportunity. If a focus on service-provision or market-based revenue generation pushes them away from doing that, I’m against it, but if the two can be successfully combined, that’s good. So, a pragmatic way of approaching these questions is to ask how nonprofits can increase the social and political impact of their service-providing and revenue-generating activities. There’s already some good work on that question from the Building Movement Project at Demos in New York and others elsewhere.

For more information about Small Change, visit Michael Edwards’ site at www.futurepositive.org. For the complete interview, visit our summary store or subscribe to our monthly summaries of Page to Practice. Or, you can keep up with what we’re reading on Facebook and Twitter.

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A compelling critique of a seemingly beneficial trend

Michael Edwards’ book, Small Change: Why Business Won’t Save the World is an essential read for any nonprofit that’s engaging businesses with their mission. Edwards’ surprising look at the realities of partnering with philanthrocapitalists will prepare you to closely examine the strings attached to your next big corporate gift. Below you’ll find a compelling excerpt from our Page to Practice interview.

CausePlanet: Some say that blending capitalism and philanthropy is the best of both worlds, and you make many effective arguments against this philosophy in your book. What is the foremost reason, in your mind, for not blending the two worlds?

Edwards: You wouldn’t use a typewriter to plough a field or a tractor to write a book, so why use business and the market where they have no comparative advantage, in the complex world of social and political change? Capitalism and philanthropy (or civil society more broadly) are different instruments that are designed to answer different questions—both necessary and valuable, but different. I fear that by blending them together, we may weaken the ability of civil society to transform capitalism over the long haul. That doesn’t mean that these two worlds should continue in splendid isolation from one another, but real change will come when business acts more like civil society and not the other way around. Business should fix itself instead of meddling with others. The social impact would be enormous.

CausePlanet: Why do you think businesses do not respect or observe the comparative advantage nonprofits have with bringing about social change?

Edwards: The explosion of social responsibility in the business world over the last ten years is a historic development, but we haven’t thought hard enough about the costs and benefits of different ways of putting it into practice. People may believe that they can transfer the lessons that made them successful in the business world into the nonprofit world, especially when they see nonprofits as less efficient and effective than businesses, which is a common view. This is understandable, but deeply misguided. I think if business people spent more time on the frontlines of social change and experienced how nonprofits actually work in reality (often very well, and on a shoestring), they might develop a more nuanced view and a greater sense of humility. And as we know,”humility is the threshold of insight.”

CausePlanet: In your opinion, what about nonprofits seems to inspire the savior complex in philanthrocapitalists when the corporate sector has plenty of its own issues with the bottom line?

Edwards: I think it is much easier to focus on the problems of other people or institutions than your own! After all, this is a common human trait which can be found in the nonprofit world as well. That’s why corporate philanthropy is sometimes used as a smokescreen for socially-irresponsible practices. Correcting those practices means corporations paying their fair share of taxes, removing their lobbyists from politics, obeying regulations in the public interest, breaking up monopolies, supporting public health care and education, and creating better-paying jobs with more benefits. And all those things require pretty fundamental changes at the heart of business itself. I think that challenge is daunting, so there’s a natural tendency to eschew the obvious path to social impact and focus on philanthropy instead.

For more information about Small Change, visit Michael Edwards’ site at www.futurepositive.org. For the complete interview, visit our summary store or subscribe to our summary library. Or, you can keep up with what we’re reading on Facebook and Twitter.

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Recruit board members that are advocates—not drab-vocates

CausePlanet is tackling board governance this month with an article feature coming from national expert, coach, and author of Leveraging Good Will, Alice Korngold. She’s worked with national boards for more than 20 years so keep your eyes peeled mid-month.

Additionally, CausePlanet is offering a workshop for Denver nonprofit leaders with nonprofit strategist and board doctor extraordinaire, Denise Clark, at the Colorado Nonprofit Association on June 18 at 1 p.m. We call these workshops Fast Food for Thought because we cover terrific solutions on a nonprofit topic as well as feature a Page to Practice summary in 60 minutes. This month’s Fast Food for Thought is board governance and covers highlights from Exposing the Elephants by Pamela Wilcox, which tackles pesky personalities and problems on boards that undermine progress (apologies for the alliteration).

Don’t forget to visit our Page to Practice book summary this month, which is stop-you-in-your-tracks look at philanthrocapitalism, by Michael Edwards and called Small Change.

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Why business won’t save the world

CausePlanet is pleased to feature a terrific book this month that will have you rethinking how to partner with businesses and philanthropists: Small Change: Why Business Won’t Save the World. Michael Edwards provides a refreshing and surprising look at the widely accepted but unproven success of philanthrocapitalism.

Edwards argues that the hype surrounding partnerships with businesses and philanthrocapitalists far exceeds the reality of outcomes when systemic change is involved. While there is “justifiable excitement” about the potential for progress in major global issues such as health, agriculture and access to microcredit, the reality is that no delivery of goods and services can eliminate inequities surrounding poverty and violence, for example—only the empowerment of those closest to the problem, as well as transformation of systems, values and key relationships can create meaningful change.

Because no nonprofit wants to appear unthankful for the generous opportunities that come their way, the rising debate about philanthrocapitalism’s shortfalls have hovered under the radar. Edwards’ book asks the tough questions and compels readers to examine the messy yet transformational nonprofit work in society versus the sometimes inappropriate reduction of societal problems to a bottom line.

For more information about Small Change, visit Michael Edwards’ site at www.futurepositive.org or learn more about Page to Practice book summaries.

Image: Michael Edwards, TransformativeChange.org

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