Tuesday, April 15, 2008

Silicon Valley Psychosis

You don't have be in Silicon Valley to contract Silicon Valley Psychosis (SVP).

A self-anointed group of mostly young technocrats calling themselves "social entrepreneurs" want to use the tools of venture capital to restructure private charity. They use the term "metrics" geek code for upsetting bloated nonprofits, sluggish bureaucracies, impenetrable opacity, lack of accountability and too much distance between social need and demonstrable outcome. They put up money to start nonprofits of their own cut to their own notions of social responsibility and charitable purpose.

The symptoms of SVP are ego driven myopia, arrogance, duplication of charitable services on a small scale, insufferable self absorption and the exact same problem of measuring results. Venture capital is but another form of "sea gull" behavior: fly in, fly out, leave a mess behind and not incidentally control the enterprise. SVP is driven by the notion that bringing a start up to market, spinning it off for a bunch of money, and going on to the next (ad)venture is a workable imitable and desirable model in the nonprofit world.

Responding publicly to a recent speech by Emmett Carson head of the Silicon Valley Foundation and a scarred veteran of the traditional foundation world - I observed to him and the audience that virtually none of these (mostly) guys is giving evidence of thinking strategically about the vast problems of the world's richest nation tolerating a poverty rate of 15%, the decampment of government responsibility for basic human services and a nonprofit culture that is indeed out of touch. Why can't they bring their creativity, innovation and get-it-done attitude to mainstream organizations? They could bring a profound difference and a new perspective but only if they stop to listen, respect the achievements of the charitable sector and enter the dialog.

The traditional private nonprofit culture they resist - despite its considerable inefficiencies - has made an exponentially greater difference in the lives of people everywhere than this small group of entrepreneurs thinking they can save the system only by throwing it over. The idea that private charities are too far gone to be made efficient, effective, accountable and transparent is plain out ridiculous. It's time to drop the pose. Social entrepreneurship is not going to replace the existing structure any time soon if ever.

With the economy circling the drain investment capital - venture or otherwise - is becoming scarce. In this environment is the social entrepreneur-venture capitalist really a new exemplar for charity or just the second lemming over the cliff?

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