Billions of Drops in Millions of Buckets Why Philanthropy Doesn't Advance Social Progress

by Goldberg, Steven H.

• ISBN13: 9780470454671
• ISBN10: 0470454679
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-07-07
• Publisher: Wiley

Summary

"Billions of Drops in Millions of Buckets" explains why the nonprofit sector must assume a greatly enhanced role in producing transformative social change; why capital market fragmentation prevents nonprofits from achieving the levels of growth necessary to produce systemic change; how fragmentation results from the lack of actionable investor information about nonprofit performance; and why financial intermediation is essential to funding performance-driven philanthropy. The book then explains how prediction market mechanisms could generate useful rankings of nonprofit performance to serve as a virtual nonprofit stock market to channel defragmented capital toward social enterprises that produce the most impact.

Author Biography

STEVEN H. GOLDBERG has advised numerous nonprofits on strategic planning and organizational development, including New Profit Inc., one of the founders of venture philanthropy; and Cradles to Crayons, which provides "everyday essentials" such as gently used clothing, books, school supplies, and baby equipment to more than 40,000 poor and low-income children. He is a Senior Fellow at Root Cause, which accelerates enduring solutions to social and economic problems by supporting social innovators and educating social impact investors. Goldberg has nearly thirty years of experience in economics, law, government, and business management, most recently as executive vice president for Business Development and General Counsel at Imagitas, Inc. He coauthored Y2K Risk Management: Contingency Planning, Business Continuity and Avoiding Litigation (Wiley) and has written extensively about nonprofit capital market institutions.

Table of Contents

About the Author	p. ix
Prelude: "The Great Recession"	p. xvii
Preface	p. xxiii
A Word about Scope	p. xxv
A Style Note	p. xxvi
A Case to Be Made	p. xxviii
The Disheartening Problem of "Scale"	p. 1
"All Children"	p. 4
"One Day"	p. 11
Transformative Social Impact	p. 12
The Funding/Performance Disconnection	p. 14
Small Caps and Large Caps	p. 16
Mid-Caps and $100 Million Problems	p. 18
Making the Most of a New "Golden Age"	p. 24
Foreclosing on the American Dream	p. 28
Of Drops and Buckets	p. 30
A Potential Inflection Point	p. 32
Objectives of This Book	p. 34
A Virtual Nonprofit Stock Market	p. 35
The American Underclass	p. 43
American Social Progress: The Early Years	p. 44
The American Dream Arrives	p. 46
The American Dream Recedes	p. 52
Consequences of Social Immobility	p. 58
More Complex Solutions	p. 62
Governmental Response Mechanisms	p. 63
The Challenge of Producing Transformative Social Impact	p. 69
Fragmentation	p. 91
Financial versus Nonprofit Capital Markets	p. 92
Organic Growth Isn't Enough	p. 98
Limits of Innovation	p. 101
Market Adoption	p. 105
Implications of Moore's Model	p. 109
Why Does Transformative Impact Cost So Much?	p. 113
Moving toward Third-Stage Funding	p. 120
The Not-So-Little Capital Market That Can't	p. 125
Intermediation	p. 131
"Better" Philanthropic Choices	p. 132
An Economic Approach to Reducing Fragmentation	p. 133
Extracting Information about Nonprofit Impact	p. 134
"Long-Tail" Economics	p. 138
Between the Short Head and the Long Tail	p. 143
Intermediation	p. 145
"Nonprofit Finance Agents"	p. 154
Closed versus Open Intermediation	p. 157
Social Factor	p. 159
Growth Capital	p. 169
Revenue versus Capital	p. 170
Investor Confidence	p. 172
Crossing the Funding Chasm	p. 173
Making the Nonprofit World Safe for Growth Capital	p. 176
Planning for Sustainable Growth	p. 177
Accounting for Growth	p. 179
A Performance-Based Funding Market	p. 191
The Work of Markets	p. 191
The Illusion of Stock Prices	p. 195
Market Dynamics	p. 197
Financial Value versus Social Value	p. 200
Up versus Down; More versus Less	p. 206
Collective Intelligence	p. 209
Prediction Markets	p. 215
An Illustration	p. 216
Behind the Curtain	p. 222
New Tools Proliferate	p. 224
Kinds of Markets	p. 227
Good Enough	p. 230
Rank Intelligence	p. 233
The Impact Index	p. 241
Designing the IMPEX	p. 242
Determining Eligibility	p. 251
Ranking Nonprofit "Stocks"	p. 253
IMPEX.org	p. 254
Climbing Off the Drawing Board	p. 256
Crossing the Fundraising Chasm	p. 259
Performance Measurement	p. 261
Platform Leadership	p. 265
Information Retrieval	p. 268
We Know	p. 273
Acknowledgments	p. 279
Index	p. 283
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