Charitable Creativity Chastised

Over the past several decades many new ways of giving have evolved—some involving capitalism—which have generally deepened the ability of society to help the less fortunate.

Many in the nonprofit sector, who retain a distinct dislike for capitalism, will find a way to decry them, as does this article from the Chronicle of Philanthropy.

An excerpt.

“Decades ago, when America’s nonprofits grew to about 5 percent of gross domestic product, it was pretty easy to guess that the market would start to find ways to peel off some of the larger and potentially more profitable parts of charitable activity.

“First it was nonprofit health care, with hospitals, clinics, and health-insurance groups like Blue Cross and Blue Shield converting to for-profit status. Next came higher education—colleges, universities, and vocational schools were acquired or started by for-profit corporations like the University of Phoenix/Apollo Group and Kaplan.

“While those were by far the most obvious and lucrative targets for profit-seeking investors, one had to wonder how long other parts of the nonprofit world, such as human services and antipoverty efforts, would be spared the avarice of capital. We need wonder no longer.

“Led by the United Kingdom’s Conservative government, and mimicked by the Obama administration and several states, social-impact bonds are the latest push to commercialize the financing of the nonprofit world. The idea is both to give nonprofits a way to pay for their programs and to give investors a way to achieve a financial return when they save government money, such as by reducing the number of criminal offenders who land back in prison after they are released.

“This is but the latest in a long string of efforts working to substitute market models—and values—for altruism, philanthropy, and government responsibility for the common good.

“Let’s quickly look at the recent history of benevolent capital’s efforts to do good while also doing well.

“First came corporate marketing deals that allowed businesses to boost their brand image and sales by tying some small portion of profit to a charity or social need. These arrangements—started by American Express in the 1980s to raise money for the Statue of Liberty renovation and now seen everywhere—do some good, but they almost always benefit the commercial enterprises more than the nonprofit organizations.”