Archive for the 'Project' Category

Why a Policy Discussion is Important

I am a co-conspirator with Lucy on the Philanthropy Policy Project, and I’m excited to be a part of this.  I am very hopeful that this conversation will lead to something, for I’m convinced that policy questions are of the utmost importance.

Why?  To start with the obvious: I am a political theorist by training and therefore my interest as a scholar is on the political institutions in which philanthropy takes place rather than on the actions and motives of individual philanthropists.  I am inclined to think that the actions and motives of individuals cannot be properly understood or evaluated outside the political institutions that currently structure philanthropy.  (Can the motive of the philanthropist be understood apart from the tax incentives that reward philanthropic behavior?)  But such a claim is not strictly necessary.  I want simply to recognize that, though philanthropy may be as old as humanity itself, its setting in modern society embeds it firmly with the political institutions of the state.  Laws govern the creation of foundations and nonprofit organizations, and they spell out the rules under which these organizations may operate.  Laws set up special tax treatment for philanthropic and nonprofit organizations, and they permit tax concessions for individual and corporate donations to qualifying nonprofits.  In this sense, philanthropy is not exactly an invention of the state but can be viewed as an artifact of the state; we can be certain that philanthropy would not have the form it currently does in the absence of the various laws that structure it and tax incentives that encourage it. The goods and harms of philanthropy can be products of, or at least can be promoted or diminished by, the policies of the state that are designed to encourage or reward philanthropic behavior.

That’s my brief for why the philanthropy policy project is important.  Your thoughts?

Some responses to #philpo

This blog post from folks at NCRP calls some key questions for this project. Of specific note to me, was this paragraph:

“What policy changes would transform our sector into something more than an emergent effect of forces beyond its control? What kind of tax policy, economic policy, industrial policy, environmental policy, or health-care policy would support the stability and growth of philanthropic capital?”
Those are great questions.

And in the words of the NCRP writer, here’s the risk of not stepping up to the plate:

“Are we moving toward a more prosperous, more equitable, more sustainable state of affairs, or is our greatest genius in creating “new” philanthropic instruments? A Policy Project that confined itself to narrow sector issues and the endless contemplation and reproduction of the giving tools already in use would be a recipe for irrelevance.”

Why rules matter

“In the end, we get the charity sector we deserve.” – That’s Matt Bishop, author of Philanthrocapitalism, on why the policies that shape philanthropy matter. In his comments regarding the UK’s review of two charities’ work he emphasizes the roles that donors, tough questions, and the ways we act can shape how the nonprofit sector work. He also notes that the structure itself is a result of 400 years of law – the point of leverage this blog is about.

What is the Project on Policy and the Social Economy?

This is an initial holding place for a potential global network focused on the policy domains that influence the social economy. Social economy is our term for the enterprises, revenue sources, and intermediaries that produce social good – social enterprises, social entrepreneurs, philanthropists, impact investors, social investors and the many kinds of funds, exchanges, and advisory firms that serve them. We are focused on the capital and enterprises that are dedicated to producing social good – with or without positive financial returns.

The project started as an idea and a blog post on http://www.philanthropy2173.com. Here is the original blog post:

“The most recent complete review of regulations, policies and practices for the nonprofit sector (of which I am aware) was the 2005-2006 Panel on the Nonprofit Sector, hosted by Independent Sector, which produced a first report with 120 recommendations and a supplemental report a year later.

Since then we’ve seen the development of new reporting and ratings systems (GIIRS, IRIS), whole new “sectors” such as Social Capital, a steady increase in online giving, a rise in international giving flows, the expansion of two new organizational forms through state law – the low profit limited liability company (L3C) and the B Corporation and probably lots of other system-oriented innovations of which I am not aware.

We’ve also seen a boon in citizen participation in reading, informing, mashing up and making sense of government data and regulations as a result of The Sunlight Foundation, Data.gov, and Government2.0. The federal government is testing new community-driven mechanisms for awarding patents that involve citizen experts, requiring public access publication of NIH funded research, and is now proud home to a Chief Information Officer and a Deputy Chief Technology Officer for Open Government.

This is a perfect opportunity to invite nonprofit and philanthropy professionals, social entrepreneurs, social capital market makers, data wonks, think tanks and others to reimagine the regulatory and policy structures that guide and inform philanthropy.What policies or regulations would improve philanthropy? Here are some that are being discussed at Internet watercoolers (or even being debated in legislatures):

* Proposed new accounting rules for philanthropic equity, based on the proven success of work done by the Nonprofit Finance Fund.
* New requirements for foundations about racial and ethnic diversity, first proposed by the Greenlining Institute, defeated in California (AB 624) and then brought back to the national discussion by NCRP.
* Requirements for independent finance and investment structures to prevent the kinds of endowed asset losses that resulted from the massive Madoff ponzi scheme.

I’d like to propose a Philanthropy Policy Project as a way of inviting new ways of thinking about the regulations and policies that guide the flow of capital to social good. I tend to try to simplify complex problems in order to get started, so I’d approach this by asking a couple of basic questions:

1. What would a better social economy look like? (Is it more money? More focused money? More democratized? More visible? Better informed? More accountable? More market-oriented? Less market-oriented?)
2. What is likely to make those improvements happen?
3. Are there policies or regulations that could accelerate or direct the change? (Based on the ideas already mentioned there are viable debates under way on accounting rules, governance structures, reporting requirements, and organizational options)
4. What are those policies/regulations and at what level do they need to exist or be changed? (Who needs to be involved)

If you have thoughts on any elements of this – the existing policies and regulations that guide philanthropy, the areas of policy that should be up for discussion, any of the proposals already on the table, or how to go about sparking this discussion in a meaningful, broad-based, and imaginative way, please let me know.”


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