A World Guided by “Philanthropreneurs”…or America’s Philanthropic Oligarchy

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December 8, 2014; The Guardian

Yet another word has been added to the lexicon of nonprofits and foundations: “philanthropreneurship.” London Business School marketing professor Rajesh Chandy uses the neologism to refer to “the skills [that] enabled people to make their fortunes, which are often the ones required to solve apparently intractable problems.” Chandy identifies Pierre Omidyar, Jeff Skoll, Richard Branson, Steve Case, and, not surprisingly, Bill Gates as exemplar philanthropreneurs. Referring to Bill (and Melinda) Gates, Chandy says that they show how philanthropists “can bring their skills to bear in a more productive way than simply bestowing money on a problem…They bring their entrepreneurial chutzpah and business thinking along with their cheque books.”

“Working in large networks, these high net worth individuals can pool the resources and expertise of a worldwide network of social entrepreneurs with the collective capacity to achieve global goals,” Chandy writes. “The act of grant-making is more collaborative than it has ever been before. The cash granted is no longer invested in things, but in the people who make things happen.”

Chandy identifies four distinguishing characteristics of philanthropreneurs:

  1. Their “driving force must be a passion to make life better for others, especially those who are underprivileged”
  2. “An element of giving”
  3. “Creativity, the envisioning of novel approaches to solving problems”
  4. “Leadership—directing, organizing, and influencing the efforts of others”

“Together,” Chandy writes, “[philanthropreneurs] are more than the sum of their parts.”

The acolytes of these philanthropreneurs, the writers who tend to see anything critical of social entrepreneurs as “tall poppy” jealousy, undoubtedly agree that these philanthropists have been endowed through their work experience and money-making with greater insights into social problems, leading to “solutions that are impactful, scalable, and sustainable.” There are online journals that publish regular hagiographic profiles of these high net worth philanthropists and their leadership in the nonprofit and foundation worlds. They downplay, however, scalable philanthropic disasters of philanthropreneurs, such as the Gates Foundation’s support of inBloom, or the ideological biases in some philanthropreneurs’ choices of solutions, like the Gates Foundation’s overwhelming support for mechanisms of school privatization.

For all of the suspicion in our society of people of wealth, there is a persistent theme in that people of wealth, people who have earned millions or billions in the business world, are somehow better equipped to devise solutions to social problems than the rest of us. How many in the nonprofit and philanthropic realms really, deeply, secretly believe that plutocracy is superior to democracy? How many quietly think that we would all be better off if we were ruled, officially in government or more broadly in society, by philosopher kings and queens, the rulers of the ideal state envisioned by Plato? How many think that society—or, more specifically, the nonprofit and philanthropic sectors—would be better off if guided by Chandy’s philanthropreneurs?—Rick Cohen

  • Terry Fernsler

    Unfortunately, the answer to your question, in my experience, is yes, unfortunately, many nonprofit leaders DO believe that plutocracy is superior to democracy and would prefer to be ruled by these “exceptional” (often, really, exceptionally lucky) individuals—at least that is their behavior. By putting philanthropreneurs (who sound suspiciously like philanthrocapitalists—it’s just like these followers of the latest “shiny new object” to think that by changing the name they can change the identity of phlanthrocapitalists) on a pedestal because they were successful in finances, the authors are enabling elitism and plutocracy. Philanthropreneurship is an extension of capitalistic excesses. Never mind that the inequities created by many of these philanthropreneurs are often at the root of the social problems they profess to address. Profit is not the issue in philanthropy.

    Deference paid to the wealthy supports plutocracy and hero worship, believing one person can have all the answers for an organization. Over-reliance on one decision maker, acting as experts with the answers rather than trustees of the community, pushing communications rather than responding to the greatest needs, deters innovation.

    The deference philanthropreneurs receive is a short-sighted defense of unfettered capitalism.
    One of the problems with philanthropreneurs is that they made their fortune, and base their social decisions as well, on a growth mindset. Perpetual growth is a myth perpetuated by those who make their fortunes and then rest on that success. They seem to imply that going to scale (growth) is always desired, as it is in business. This ignores the value of social bonding and social bridging important in the civil sector, and the very purpose of philanthropy. Growth often creates haves and have-nots. Sustainability, on the other hand, will be based on a change mindset. Reflective nonprofit leaders will consider how to create new systems out of the old, inequitable, consider how to create new systems out of the old ones, not immortalize an inequitable, harmful system that works for only a few.

  • Mark Kordic

    !Collaboration. Using insights from successful business leaders. Focusing on outcomes which make life better for underprivileged people. Noble behaviors. Noble goals.

    Chandry applauds the movement led by Philathropreneurs to collectively use their skills and resources to accelerate growth of non-profits. I would suggest another element in the relationship between Philathropreneurs and non-profit leaders which may promote positive feelings of success between both parties: introduce mutually agreed-upon goals and benchmarks at the beginning of a project.

    In his book “The Age of Global Giving” (William Carey Library, 2014), my colleague Gilles Gravelle summarizes research that when incremental benchmarks and specific outcomes in a project are mutually agreed upon by philanthropreneurs and non-profit leaders, “donors are certainly willing to take risks when they understand the sort of positive impact risk taking can produce.”

    May the trend for Philathropreneurs and non-profit leaders to reach clarity on project goals and mutually agreed upon benchmarks continue. Transparency makes all the difference. May the ranks of philanthropreneurs increase to help alleviate spiritual and physical poverty worldwide. That’s a story worth writing about as the calendar year turns over.

  • Carolyn M. Appleton, CFRE

    I have to admit that after many years in major gift fundraising, I have seen communities sorely divided as to whether or not certain nonprofit projects of great potential benefit should even be attempted. Comments like, “should we spend the money – we can’t afford it!” and, “there is no way we can raise that kind of money!” were common.

    And I have seen a few wealthy businessmen and women step up to fight the good fight. They looked to the long term health and well being of the community, and they came together to fund the projects at significant levels despite acrimonious debate. One defining personality trait of these visionaries is that they have all been highly entrepreneurial.

    I have also been teasingly called a “monarchist” by a former nonprofit director. To this I say, if I see a worthy project waiting in the wings, and I also see a few prospective donors capable and willing to make it a reality, I will most certainly focus on the latter to help achieve the former!

    I believe in democracy, but one that is tempered by the wisdom of far-sighted community leaders and philanthropists. Communities (including local governments) that do not take their advice and guidance into account will remain behind.