Creative Destruction, Oversimplification, and Assessing Philanthropy

Phil Buchanan, Center for Effective Philanthropy

Phil Buchanan, president of the Center for Effective Philanthropy, offers his critique of Kaplan and Grossman’s article, “The Emerging Capital Market for Nonprofits.” Buchanan argues against efforts to improve the nonprofit sector by incorporating ‘for-profit’ thinking and practices. He contends the nonprofit sector is multifaceted and this way of thinking oversimplifies the complexity of the nonprofit sector, while defending the need for “greater emphasis on performance assessment…and intermediary infrastructure.” Further, Buchanan suggests that philanthropy solves the very problems that business and government cannot, or that often result from market failure.

Buchanan’s piece raises interesting questions about the limits to which market-based practices are relevant and appropriate for the charitable sector. These questions, as well as the points raised by Kaplan and Grossman, are important for foundation and nonprofit leaders to consider as they assess the value and impact of new models and capital sources for charitable purpose.

Global Topics: Nonprofit Capital
Focus Areas: Nonprofit Capital
Resource Types: Article