Should Civil Society Be Reduced to a Subset of the Market?

January 25, 2010

Over the past few years it’s become almost an article of faith that civil society—including philanthropy and the not-for-profit sector it supports—should operate on business principles, like rates-of-return, competition to weed out the weak, close supervision of the organizations you support, financial data as measures of success, and paying corporate salaries to the CEO. It’s an increasingly powerful movement that drives me absolutely nuts—not because I don’t believe that some of these things can be useful in some situations, but because I do believe that their overall effects might damage civil society as the wellspring of values and actions that have changed the world for the better, from the struggle against slavery to pro-democracy demonstrations in Iran.
To me "civil society" simply means the ways in which citizens organize themselves for collective action in pursuit of the common good—formally and informally, through a wide variety of strategies, and concerned with a myriad of different issues. In fact I've written a book on the topic that tries to communicate in straightforward terms why civil society is so important.
But over the last few years, this huge diversity has been reduced to a discussion of the social economy and how best to support it, blending civil society and the market in ways that are supposed to benefit both.
Such experiments—like venture philanthropy and social enterprise—are interesting for sure, but even if scaled up they would form only a small component of the civic fabric that all societies require. That’s because civil society is a space for social and political action, not just for providing goods and services to disadvantaged groups, a space in which we as equals can negotiate and address solutions together without regard for profit or government directives. And because civil society is freed from those constraints, citizens can push for the transformation of society in areas where business and governments—even socially responsible ones—usually fear to tread.
I like to think of civil society as an ecosystem, an organic entity in which lots of different organizations and activities are linked together, not a machine in which inputs and outputs can be manipulated by outside forces, including funders. In this sense, the role of philanthropy is to support the conditions in which people can nurture and develop this ecosystem in ways that are appropriate to the context and helpful in increasing its social, economic, and political effects.
That’s obviously a challenge to the current orthodoxy in this field, which directs "investment" to "high-performing projects" that can then be "replicated" or "scaled up." The Obama Administration’s Social Innovation Fund is a classic example of this approach at work—bureaucratic, technocratic, and quite at odds with the way civil society works, but logical I suppose if you come from a business background.
The business approach may be comforting to funders, but it uses the wrong set of instruments to promote deep-rooted social change. Would you use a typewriter to plough a field or a tractor to write a book? Of course not, so why use business thinking where it makes no sense? I’m sure this would horrify its supporters, but eroding the transformative potential of civil society may be the long-term consequence of the coming revolution in philanthropy, and that’s why I’m so concerned. Welcome to "civil society–lite" as I call it in my new book Small Change: Why Business Won’t Save the World.
I’ve used this first blog post to talk about civil society because the complexities involved are usually ignored in discussions about "effective" philanthropy, and it’s the frame I’ll be using over the next five days to explore some important and controversial issues: "social capital markets" and the damage they can do; the conflicts and trade-offs that occur when you mix civil society and the market; the possible erosion of democracy and social activism when philanthropists follow the "path of least resistance"; and the idea of "citizen philanthropy," to borrow a phrase from Peter Deitz and others, as an alternative pathway for the future. I hope you’ll join me in the conversation.
Tomorrow: Why "Social Capital Markets" Could Be a Really Bad Idea

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Michael Edwards


Oct 05

Rip Rapson
President and CEO
The Kresge Foundation