The Business of Giving

04/07/2006

The art of communication is the language of leadership.
James Humes

The "The Business of Giving: A Survey of Wealth and Philanthropy," in The Economist (February 25, 2006; www.economist.com), provided an interesting analysis of "the new philanthropy" brought on by the rising donations of the recent generation of super-rich technology leaders. The report observed that while the rise in charitable giving is welcome, much of the potential value of the contributions has been lost. "Billions are wasted on ineffective philanthropy," says Michael Porter, a management guru at Harvard Business School. "Philanthropy is decades behind business in applying rigorous thinking to the use of money."

As a result there is a growing interest among the new philanthropists in bringing about a "productivity revolution" in the philanthropic world by applying the best elements of the business world they know. This has prompted the non profit world to adopt business jargon, with philanthropists now talking about "social investing," "venture philanthropy," "social entrepreneurship," "triple bottom line," "high-engagement," and "leverage maximization."

According to the Economist report, however, not everyone is sold on the new non profit business mentality. Jim Collins, auhor of *Built To Last* and *Good to Great*, was quoted as observing, "We must reject the idea — well-intentioned, but dead wrong — that the primary path to greatness in the social sectors is to become 'more like a business.' Most businesses are mediocre."

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