“Philanthrocapitalism” Vs. Nonprofit, debate

tags: fund raising, Nonprofit, Online Giving, philanthropy, Pilanthrocapitalism

There is a debate among some regarding the advent of philanthrocapitalism Vs. Nonprofit charitable giving. The arguments are both valid. Here are the differences, you choose for yourself.

Definition of Philanthrocapitalism:
Not found on Dictionary.com as a “real” word. Here is the best definition to describe it. Harnessing business and the market to the goals of social change. “Philanthropy” Means: altruistic concern for human welfare and advancement, usually manifested by donations of money, property, or work to needy persons, by endowment of institutions of learning and hospitals, and by generosity to other socially useful purposes.
http://dictionary.reference.com/browse/philanthropy

The argument:
Philanthrocapitalist supporters believe that business principles can be successfully combined with the search for social transformation. Many philanthropists’ such as Warren Buffet, Bill and Melinda Gates and Gordon and Betty Moore are giving billions to charity but doing it in a manner to which they are accustomed. Their wealth has given them the ability to give the way they choose. The fact is the “wealthy” and financially cautious people generate and manage their money and charitable donations differently than the average donor (in general). Some reasons for this may include tax consequences, budget restraints and business methods. To be a “Philanthrocapitalist” is to recognize money is a resource that can be-re generated and not given all away at once.

Re-generated money for charity:
How can money be re-generated, then used for charitable purposes? The wealthy and financially educated have discovered the secret of growing money. They have discovered that planting many seeds will grows many trees which will bare much fruit. They realized long ago that if they gave all their seeds away they would not grow enough trees to bare fruit. Instead they grow as many trees as they can and when it’s financially prudent to do so they give of their fruit. Philanthrocapitalists know how to generate money for their good deeds without giving up the “farm” of trees!

Definition of Nonprofit: 1. Not established for the purpose of making a profit; not entered into for money: a nonprofit institution. 2. a nonprofit organization, institution, corporation, or other entity.
http://dictionary.reference.com/browse/Nonprofit

The Argument:
Those against Philanthrocapitalism believe that Nonprofit organizations should be the only organizations to support charitable causes. Their concern is that capitalism is meant for profit and Nonprofit organizations are meant to serve without the benefit of profiting.

Serving without the expectation of gain:
The 1 + million registered Non profit organizations in the U.S. are designed to fulfill a cause and purpose without an expectation of “profit”. They can, within the law support their fiscal responsibilities and compensate people for their efforts within the Nonprofit rules and guidelines. Those against Nonprofits being the only ones to serve do not realize what great expense and effort a Nonprofit exhausts to stay in existence. When other organizations take money from their donor base it weakens their ability to function or even survive.

My Opinion:
I am a firm believer in change. Our world, laws and methods change daily. We all need to concern ourselves with who makes and controls the “rules” but I feel we should not be concerned about change.

Currently Nonprofit organizations all around the world are serving with such grit, determination and love and the way Nonprofits work today is different then how they worked 20 years ago. They had to change and adapt and have done (on the most part) a great job of it.

In the U.S. we are seeing record breaking donations given to charitable causes. Over $306 billion dollars was given in 2007 to U.S. based Nonprofits (Churches, Schools, Private and Public charities). Billions of which were given by Philanthrocapitalists. And I am glad we have that extra money  that may have never been given to charity at all. There are millions of people now being helped by those contributions and I applaud the Philanthrocapitalists that “signed the checks”.

I will not descriminate against a Philanthrocapitalist or a Nonprofit for what good they do as long as they do good. Nor will I discriminate against an individual as long as they do good. I judge them by their “fruits”.

Jeff Crane @ July 11, 2008