Given the rise of neoliberalism over the last twenty years—the extension of the market into every sphere of life—it’s no surprise that civil society has begun to receive the same attention. Large parts of politics and government, health care and education, knowledge production and the media have already been overtaken, but civil society, one could argue, is a more important case because it’s the ground from which alternatives can grow.

Is there anything more frightening to foundations than democracy? I don’t mean the kind you pay for through projects, but the kind that enables people to participate in decisions that affect them, including decisions about philanthropy. If philanthropy is "private funding in the public interest," it doesn’t seem unreasonable to ask that the public has some say in defining how its interests are identified and met. Yet there is no way they can do this at present.

Much of the "new philanthropy," it seems to me, inhabits a world like Pandora of Avatar—James Cameron’s new film that is now the biggest blockbuster of all time. Pandora is a place whose inhabitants live in perfect harmony with their environment, with no hint of conflict until those nasty corporate mercenaries start bulldozing their trees. It’s the same with philanthropists who see no contradiction between civil society and the market—between competition and cooperation, self-interest and sacrifice, social impact and the financial bottom line.

A common assumption of the "new philanthropy" is that "social capital markets" will separate effective from ineffective organizations by forcing nonprofits to compete with each other for scarce resources, allocated according to standardized criteria. I think it’s much more likely that important work in civil society will be marginalized, leading to less social change, not more. How come?

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.