Non-profit consultant and expert grant writer, Derek Link, shares some information on the debate surrounding Philanthrocapitalism in the non-profit world:

There is often a separation between donors, those of us who give money to causes in order to feel good about helping, and the doers, the volunteers and staffers who do the work of organizations that receive the money. Philanthrocapitalism challenges this model through the creation of organizations that don’t simply distribute donated wealth, but which actually engage in commerce to create wealth for distribution.

The debate over the concept of Philanthrocapitalism challenges the fundamental underpinning of charity, that nobody should become wealthy by doing charity work; for in doing so, that person is personally benefitting from charity dollars. Mother Theresa is perhaps the most visible patron saint of self-sacrificing charity work. She gave most of her life to the poor in India, living among them each day. People like Mother Theresa contribute to a fundamental belief that to do good one must sacrifice, that in order to understand the needs of those you serve, one must feel their pain, and live with the mission at some level.

The Philanthrocapitalism paradigm is challenging the natural order of the charity world. Many people engaged in charity work are employed at low wages and they accept these sacrificially out of commitment to the cause. They sacrifice higher paid jobs in the for profit world to serve a cause. The incursion of capitalists into the world of philanthropy is unsettling to those who think a non-profit executive or consultant earning $200k or better per year is in effect robbing valuable resources from the cause.

The concerns about the potential for corruption of civil society ideals via Philanthrocapitalism are understandable because most non-profit organizations still rely on the trust and goodwill of donors. Non-profits do not want to be painted with the broad brush of recent capitalist corruption. Just witness the hotly debated compensation levels of Wall Street executives and how that has damaged the image of the free market capitalists.

What would happen if the compensation levels of non profit executives were to become widely known? This is public information, just not considered newsworthy yet. The average struggling American worker may feel justifiably outraged that their donated dollars are making people wealthy instead of providing the services they donated toward.

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Related Posts:

Changing Lives through Social Entrepreneurship

Is Your NonProfit a Closed Organization?

Does Philanthropy Serve the Common Good?

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