common sense for the common good

A New Capitalism? Not Just Yet

July 25th, 2007 by Vihar Sheth
Posted in Capitalism, Organizations, Philanthropy

I’ve argued on these very pages (right here in fact!) that ventures born of social entrepreneurship need not be structured as not-for-profit, though I’m also not naive enough to think that for-profit social entrepreneurship will become mainstream any time soon. My vision is for capitalism to be supplanted by for-profit social entrepreneurship. The odds are slim, but a boy can dream. In the mean time, I enjoy learning of studies like this one, which provides ”a detailed assessment of the quality of the non-governmental organisations and United Nations’ agencies with which private-sector companies have established long-term working relationships”.

The study was conducted by the Financial Times and Dalberg Global Development Advisors, and “identified 865 corporate partnerships with NGOs, polled the 445 companies involved on their views, and drew up a shortlist from their responses of 554 organisations to study in further detail”. The partnerships were assessed by the companies on four criteria: (1) Accountability, (2) Adaptability, (3) Communication and (4) Execution. The global rankings as determined by this assessment can be found here.

The FT website that hosts the results of this study, as well as many others, is rich in information. I’ll spend some time browsing and post if I learn anything worthwhile, though even my casual survey of the site yielded links to at least half a dozen articles with appealing titles.

Reaching an equilibrium between maximizing profits and meeting the needs of every citizen on earth is more than improbable, it is impossible. Human nature compels man to help others, as it simultaneously compels man to hurt, even if passively, ignorantly and indirectly. Until the latter of the urges can be suppressed or eliminated, no equilibrium can be reached. Of course, suppressing or eliminating the urge to hurt would dehumanize man, removing from his repertiore the act of overcoming selfishness and removing from our hearts and minds the ideas of will and sacrifice.

What then is the proper direction of economics in a feeling society? I believe free market capitalism is part of the answer, but the part in direct conflict with sacrifice in the status quo. Profits should be generated through innovation and increased efficiency, not manipulation and victimization. The burgeoning partnerships, like the ones described in the study I referenced, give hope to world of hybrid organizations. But, non-governmental organizations and non-profits can not only be relevant to capitalism when it behooves a for-profit corporation to act for political, financial or even social reasons - they must become part of capitalism.



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