Sunday, April 29, 2007

Part 2: The Revolution Will Not Be Funded

This article proposes a fairly straightforward answer to a question I considered in yesterday's post:

The Revolution Will Not Be Grant Funded
Philanthropic support is declining and government subsidy is disappearing. Isn’t it time for CDCs to break the shackles of foundation support and let the market set them free?

By Michael H. Shuman and Merrian Fuller

For those who don't want to go to the link (or who are reading this blog in RSS), here is the answer they propose:

Next Steps
"If foundations and donors had never existed and professional panhandling had been outlawed, CDCs would have been forced to create and run new enterprises or new networks of local businesses, and our movement would be considerably healthier than it is today. Progressives have become the classic twentysomething kid still living at home, expecting an allowance from the deep-pocket parents for a few basic chores, while agreeing, as a condition for the chump change, to obey someone else’s rules on social change. It’s time to grow up and strike out on our own.

"Here’s a challenge to CDC managers (one we take seriously ourselves): Let’s try to wean ourselves from the charity habit, say by 3 percent per year. Think about just one piece of your agenda that could be framed as a revenue generator, dream about it a little, develop a business plan and give it a try. If you lack the skills, skip your next fundraising class and instead attend one of thousands of entrepreneurship programs around the country. Or hire someone who might start the entrepreneurial subsidiary of your nonprofit.

"The fateful decision nearly half a century ago to make CDCs nonprofit was rooted in the beliefs that the poor were unbankable, that affordable housing was unprofitable and that poor communities made lousy markets for new business – all embarrassingly paternalistic and incorrect assumptions that have been demolished by the work of thousands of socially responsible entrepreneurs. There may be progressive causes that cannot be fought in self-financing ways, but the focal points of CDCs – to provide affordable housing, neighborhood revitalization, and new business and entrepreneurship opportunities – are fortunately not among them."