One way or another, most philanthropy and social change efforts assume a growing economy. But what if that assumption no longer holds?
That’s why Post Carbon Institute is exploring the transition to “Resilient Philanthropy.”
Now, before you get riled up, I don’t mean that caring for others depends on a growing economy. It doesn’t. Sure, philanthropy means “loving human
kind” (sounds a lot like the Buddhist precept of “lovingkindness,” doesn’t it?). However, in current practice
here in the US, philanthropy has come to mean "deploying wealth to achieve social change.” Of course, social change has happened for millennia without capitalism or economic growth. However, a great many social change groups (including PCI) depend in some way on financial support. And financial support typically comes via some combination of donations (the fruits of profit-making activities), tax-supported grants (a percentage of profit-making activities), and fees-for-services (profits by another name).
Which leads back to a sweeping (if not totally inclusive) statement: most philanthropy and social change efforts depend on a growth-based economy (the source of profits, taxes, and fees).
Over the last century or so, that model has worked. However, as we have seen since 2008, social change work suffers when the economy grinds to a standstill…precisely when it is needed most. Social change advocates are hard-pressed to continue their vital work—let alone dream big and plan for the long term—when funding dwindles.
Fortunately, many generous philanthropists have dug deeper in the last few years to temporarily bridge funding gaps. And, many dedicated social change workers have cut down already lean efforts—and dug into their own reserves or worked without pay—to keep their missions alive.
But what if a no-grow or slow-grow economy is not a temporary aberration, but a long-term prospect? What if Richard Heinberg’s landmark The End of Growth
forecasts accurately a future where we can no longer assume compounding economic growth?
Prudence suggests we extend our resilience thinking to include philanthropy and social change. We’ll need a “Resilient Philanthropy” model, where efforts to build a healthier planet and society thrive…even if the Dow Jones dives.
“[F]oundations and our nonprofit partners must make the transition away from assuming growth in our sector as natural and necessary.... To turn around these crises means supporting the emergence of cheerful new cultures built not around consumption but around our relationship with the earth and with each other…. I believe we shall see an increasing shift away from ‘perpetuity’ as the assumed goal of most foundations. This will happen because financial markets will no longer offer sufficient returns for most foundations to maintain assets long term at 5-percent payout, and because foundations will increasingly ask why they should seek perpetuity through a system that clearly is not going to persist.”
Ken (along with other leaders in the social change sector) makes a key point: Since we’ve been complicit in perpetuating the current economic model, we’re responsible for helping a new model to emerge.
Fortunately, the philanthropy/social change sector has a long history of getting out ahead of daunting challenges. Which is good news, because supporting social change in a slow/no-grow economy unleashes the kind of questions that make your head hurt:
· If philanthropists can no longer assume “market rate returns” (or perhaps any sort of financial returns) from investments, then what are the best strategies for deploying assets?
· If nonprofits can no longer expect the same level of financial support, then what strategies will have the greatest impact?
· If the mainstream economy won’t return to “business as usual,” then what are the right goals for education, poverty alleviation, health, housing, labor, and similar efforts?
We certainly don’t have all the answers at Post Carbon Institute. But we can begin by raising some useful questions, as well as exploring “Resilient Philanthropy” (as others like Joanne Poyourow are exploring “Resilient Nonprofits
”). Over a few blog posts, papers, and conversations, we’ll begin to sketch out a model of social change that relies more on GPI (Genuine Progress Indicators) or GNH (Gross National Happiness) than on GDP (Generally Disappointing People).
How do you see the future of philanthropy and social change unfolding? Share your thoughts below.