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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