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Capitalism

Only days after their debate at the Center for Effective Philanthropy conference, I got a chance to see Mathew Bishop continue his debate with Michael Edwards in Washington DC. The session was at the Hudson Institute, which likes dramatic titles to its events—this was one was called “Philanthrocapitalism: Savior or Emperor?” (A program last month was called “Apocalypse Now for Nonprofits?” and was about the financial crisis.)

Bishop is the author of Philanthrocapitalism: How the Rich Can Save the World, and is the chief business writer of The Economist. He gave his by now well known view that the mega-rich like Gates and Soros have the money and business know-how to make a dramatic impact on philanthropy and the world’s problems, applying metrics and a demand for accountability. By the way, Bishop will also be a speaker at the DonorEdge conference in June with GuideStar’s community foundation partners. His protagonist this day was Michael Edwards, who has written Just Another Emperor? The Myths and Realities of Philanthrocapitalism and sounded mistrustful of the wealthy and scornful of efforts to merely solve problems rather than get at the systematic root causes. It was an entertaining arm wrestle.

What caught my attention, however, was the third participant: Dennis Whittle, co-founder of Global Giving. Dennis is a former executive at the World Bank and was part of a troika that led the World Bank’s Corporate Strategy and Innovation units, where he co-led the team that created the Development Marketplace. He was blunt in his analysis of the World Bank’s shortcomings and suggested the Bank (was he implying other big institutions as well?) are too big and bureaucratic for making a major difference. He suggested a better approach may be the philanthropic marketplace, such as one he has helped to start at Global Giving. Dennis observed that he was helped in starting Global Giving by some notable philanthrocapitalists (Skoll, Hewlett and Omidyar), but many small donors as well. He thinks this is important in order to avoid concentrations of power. Global Giving posts the causes and needs of social entrepreneurs and organizations that have gone through a vetting process and gives donors an opportunity to contribute to projects of their choice. Dennis says the marketplace encourages learning and innovation, and giving people more than one chance to succeed. It embraces the concept that there is not always one correct answer. Another thing I like about Global Giving is that project leaders are encouraged to post progress reports on regularly. According to their Web site: If you’re not satisfied with your donation for any reason, the GlobalGiving Guarantee provides you with your money back in the form of a voucher for the amount of your original donation.

The marketplace concept appears to be where much of charitable giving is heading and certainly is where much of the energy is right now. The Hewlett/McKinsey study on the electronic marketplace reminds us that an effective marketplace requires both a supply and demand for high quality data on which to make decisions, along with the tools to efficiently connect buyer and seller. That’s where we hope GuideStar can make a difference.

Topics: Policy Finance