Money men in the third sector, part one

My partner and I have been talking a lot about non-profits of late, and some of the thinking about expertise that came out of these discussions is possibly worth sharing (at least to the extent that anything really is on the intertubes). I want to give credit to partner without assigning blame for my viewpoint. She’s more generally positive than I am in almost every case.

My thoughts are braketed by two (good) books: John Wood’s Leaving Microsoft to Change the World and Tracy Kidder’s Mountains Beyond Mountains (which I was reminded about when David Purcell recommended it – thank you, Dave). I should add up front that if this discussion leads you to believe that you shouldn’t give money or respect the work of these non-profits, this makes you a kinda bad person. I’m speaking of relative value rather than absolute value.

John Wood founded Room to Read, a non-profit that donates books, builds libraries, and encourages girls’ education across the developing world. The memoir tells Wood’s story about how he got involved in, among other things, bringing books via yak to communities in Nepal. He was an up-and-comer at Microsoft during its heyday, working in Australia and East Asian markets. And during a trip to Nepal, he had a kind of epiphany, which led at age 35 or so to a total reorientation towards literacy in the developing world.

The Room to Read (R2R) model is straightforward and audacious:

We partner with local communities throughout the developing world to provide quality educational opportunities by establishing libraries, creating local language children’s literature, constructing schools, and providing education to girls. We seek to intervene early in the lives of children in the belief that education empowers people to improve socioeconomic conditions for their families, communities, countries and future generations. Through the opportunities that only education can provide, we strive to break the cycle of poverty, one child at a time.

Wood is a compelling figure in this story, in two main ways. First, he really has no particular expertise in literacy or education. His interest comes from identifying an obvious and heartbreaking lack of resources in schools around the developing world and from his own experiences loving books as a child. Second, his transition from the go-go-go for-profit world of Microsoft to the non-profit world was a change in goals but not process. His self-purported aim is to bring the aggressive, results-oriented culture of Microsoft to the delivery of books and resources to schools and libraries.

My partner has an MBA, and she has worked in for-profit and non-profit sectors. For her, Wood’s model is wholly compelling. His madman’s life of fundraising, strategic planning, and execution are the reason people go through the social entrepreneurship programs at management schools. Why not direct formidable amounts of energy and action towards the eradication of illiteracy in the developing world? As opposed to, say, making another iteration of an operating system or enterprise software.

But this is not without some considerable problems, stemming from the very same sources as the successes of these organizations. I want to focus on a specific piece of Wood’s book, where he was discussing a “failed” fundraiser in Cambridge, MA (‘such failures that I found myself going back and forth on whether this chapter structure was worth the investment of my time’). It’s 159-163 in the book. After giving his spiel about how R2R was giving books to kids in Nepal, he began to feel uneasy:

[I] felt that I had nailed the presentation. Yet at the end not a single person clapped. Odd. Our work had always drawn vocal and positive feedback.

Staring out at a sea of skeptical faces, I paused, wondering what was going on. I filled the void by asking if anyone had questions.

“Yes, I have one.” A young woman in horn-rimmed glasses, short-cropped hair, and a blue Patagonia fleece threw me a zinger. “Can you explain your pedagogical theory?”

Ped-a-gog-i-cal theory. Do I have one? “Uh, sure. Kids need to grow up learning, reading, and going to school, and in the developing world a lot of them currently don’t. We help to fill that void with new schools, teachers, libraries and books.”

She pointed out that this was not really a unified pedagogical theory. I could not argue with her on this one. I made a mental note to ask someone smarter than me whether Room to Read had a UPT.

And there’s the rub. Wood’s organization is good at getting books to kids, but it has nothing to say at all about the kinds of things kids would get from reading those books, or whether this is a worthy educational mission to begin with. Believe me, I think it is. But Wood doesn’t have much to say about it.

In fact…this is quite common among a certain breed of social entrepreneurship. Take the justly-famed One Laptop per Child program, designed to bring the internet to the developing world. Started by Nicholas Negroponte and many of the core folks at the MIT Media Laboratory, their justification is:

to provide a means for learning, self-expression, and exploration to the nearly two billion children of the developing world with little or no access to education. While children are by nature eager for knowledge, many countries have insufficient resources to devote to education—sometimes less than $20 per year per child (compared to an average of $7,500 in the United States). By giving children their very own connected XO laptop, we are giving them a window to the outside world, access to vast amounts of information, a way to connect with each other, and a springboard into their future. And we’re also helping these countries develop an essential resource—educated, empowered children.

Like Room to Read, OLPC has nothing to say about what exactly, children will be learning ‘online’. What resources, websites, information, connections will be made? Or should we just assume that children+technology=education?

The list goes on. The immensely successful Kiva provides micro-loans to entrepreneurs in the developing world. But for what? Kiva is agnostic. Help someone get out of poverty by lending money for a bingo business, a butcher shop, or ‘goods distribution’ (whatever that means).

Kiva has nothing to say about the content of entrepreneurship, just as OLPC has nothing to say about the content of technology, just as Room to Read has nothing to say about the content of education.

At least in some cases, the application of business acumen to complex social problems makes sense. For instance, in the case of Malaria No More:

We have the tools (mosquito nets, medicine, spraying) to eliminate malaria deaths, but we need to dramatically scale up efforts to deliver them to the people who need them most. The challenge is principally operational, not scientific, and therefore amenable to business-style problem solving. Malaria No More was established in December 2006 by two widely respected business leaders—News Corporation President and COO Peter Chernin and Wall Street pioneer Ray Chambers—who are applying their private-sector experience and considerable networks to tackle this problem.

And finally I can make the question explicit: What kinds of challenges are principally operational versus scientific (or, more broadly, requiring content expertise)? What kinds of problems are amenable to business-style problem solving, and which require more than just private-sector methods applied to non-profit goals?

I take this up more in the discussion of Paul Farmer’s organization, Partners in Health.

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