The Great Debate UK
from Felix Salmon:
Steve Jobs’s philanthropy
Andrew Ross Sorkin takes a look at the private life of Apple's chairman today, passing on rumors about activity he clearly doesn't want publicized, in the face of stony silence from Apple. But hey, Sorkin's a journalist, I guess that's what journalists do.
The column is headlined "The Mystery of Steve Jobs’s Public Giving," but really there's no mystery at all: there is no public giving from Steve Jobs. Sorkin isn't happy about this. "Most American billionaires have taken up philanthropy in a public way and helped inspire future generations of charitable giving," he writes, concluding that "perhaps" in future years Jobs might "inspire his legions of admirers to give."
Some of Sorkin's points are good ones. There's no good reason, for instance, for Jobs failing to reinstate Apple's philanthropic programs, which he cut on the grounds of wanting "to restore the company’s profitability." Similarly, Apple's failure to match its employees' charitable giving does make it stand out -- and not in a good way -- from its Silicon Valley peers.
I think this is maybe a downside of Jobs's famous micromanaging: if he's personally not interested in something, then his entire company becomes uninterested in it.
from The Great Debate:
Impact capital is the new venture capital (Part II)
By Sir Ronald Cohen
The views expressed are his own.
The first part of this essay laid out the rationale for impact investing, whereby investors can simultaneously create social impact and achieve financial returns. How can we bring it about? First, we need an enabling environment. In the 1970s and 1980s, the venture capital community argued successfully for changes in taxation and the regulation of financial institutions to foster investment in venture funds. Governments were lobbied to improve the climate for start-up and early-stage ventures. Markets to raise equity and trade stocks in pre-profit companies were introduced in the US (Nasdaq in 1970) and in the UK (USM in 1979). Rates of direct, personal taxation were reduced. And, in 1978, amendments to the USA’s ERISA legislation were specifically designed to foster venture investment by U.S. corporate pension funds. Such liberalizing measures were adopted first in the USA, which, as it turned out, reaped most of the benefit of the high-tech revolution, largely funded through venture capital.
Social enterprise and impact investment need similar rule-changes to foster investment in mission-driven ventures that deliver social returns in combination with financial returns. We need tax incentives, as well as several rule changes: in the permitted scope of activities by charitable foundations; in the role of banks in low-income areas; and in the rules governing institutional investment. In particular, the restrictions on investment by charitable foundations and financial institutions need to be adapted to enable the inclusion of social investment. For example, regulatory encouragement for pension funds is needed, so that social investments are included within the definition of prudent investment.
from The Great Debate:
Impact capital is the new venture capital (Part I)
By Sir Ronald Cohen
The views expressed are his own.
Broadly speaking, capitalism does not deal with its social consequences. Even as communities grow richer on average, so the gap between the “haves” and the “have-nots” increases. For example, since the mid-1970s, both the USA and UK have actually become less equal rather than more equal. In the long post-war boom many governments did make significant headway in ameliorating the consequences of social inequality. This can be seen in levels of investment in areas such as health and in critical performance measures such as life expectancy. Nevertheless, governments, despite their best efforts and even in the best of times, have not been able to resolve all social problems.
Commentators on one side of the political spectrum attribute this failure to the lack of resources available to the state and to the state’s reluctance or inability to act appropriately. Commentators on the other side attribute government’s shortcomings to the inherent inefficiency of the state itself. The truth is that the political process, which focuses on short-term gains, does not favor long-term, preventative investment of the type required to address major social problems.
from Felix Salmon:
How Philanthrocapitalism coddles CEOs
A quick reply to Matthew Bishop and Michael Green, which with luck will bring this exchange to an end: I'm not saying that they make the case for the status quo. But when Davos Young Global Leaders, like Bishop, intone importantly about how "there is an urgent need to tackle fundamental flaws in the economic system" and how CEOs need to concentrate on long-term enlightened self-interest rather than "short-termist behavior", the very corporate chieftains they're trying to reach are going to nod in serious agreement and claim in all sincerity to be part of the solution rather than part of the problem.
Never in the history of Davos has a CEO got up on stage and said "I'm trying to make as much money as I can before the board finds me out and fires me". Which is precisely why CEOs don't think that Bishop and Green are talking to them. And on top of that, the Philanthrocapitalists are happy reducing the pressure on any individual CEO even further with rhetoric like this:
from Felix Salmon:
Philanthropy isn’t for profit
Dalberg is an international consultancy which explains, on its About page, that "we value social impact above profit but recognize that a sustainable business model is essential to our success". Makes a certain amount of sense: if you want to do a lot of good in the world, it's helpful not to be having to beg for money all the time. And of course that mission makes it much easier for Dalberg to charge huge sums of money and help its owners on their path to wealth and fortune.
Daniel Altman is an economist who glories in the title of Director of Thought Leadership at Dalberg, and he's now written a paper which essentially seeks to eradicate the distinction between social impact and profit altogether. Social impact, he says, along with similar ideas like double bottom lines or corporate social responsibility (CSR) and creating shared value (CSV),
from Felix Salmon:
Don’t donate money to Japan
Individuals are doing it, banks are doing it -- faced with the horrific news and pictures from Japan, everybody wants to do something, and the obvious thing to do is to donate money to some relief fund or other.
Please don't.
We went through this after the Haiti earthquake, and all of the arguments which applied there apply to Japan as well. Earmarking funds is a really good way of hobbling relief organizations and ensuring that they have to leave large piles of money unspent in one place while facing urgent needs in other places. And as Matthew Bishop and Michael Green said last year, we are all better at responding to human suffering caused by dramatic, telegenic emergencies than to the much greater loss of life from ongoing hunger, disease and conflict. That often results in a mess of uncoordinated NGOs parachuting in to emergency areas with lots of good intentions, where a strategic official sector response would be much more effective. Meanwhile, the smaller and less visible emergencies where NGOs can do the most good are left unfunded.
from The Great Debate:
Say it with philanthropy
- Matthew Bishop and Michael Green are the authors of "Philanthrocapitalism: How the Rich Can Save the World." They blog regularly at Philanthrocapitalism. Their views are their own. -
Bankers keep telling us how sorry they are for getting the world into the current economic mess, but the public doesn't seem to want to accept their apology. To show they mean it, the rich need to discover philanthrocapitalism and start to give back to society - for their sakes and ours.
