It Is a Recession, and It Could Be a Restructuring

I’ve been thinking about this post since last November. Unfortunately, quite a few things have come between my thinking about it and my writing about it. My thinking on this is not totally complete, but let me put out some ideas because I think this frame is critical—this is an opportunity to reframe, rethink, re-set, and re-build some of the things we take most for granted. It is not (just) a recession, it (can be) a restructuring.

This video, which I found on Marty Linsky’s blog (with a big shout out to Virginia Clarke) is worth the 4 minutes and 50 seconds to watch—I bet it will get you thinking in a “re-set” kind of way.

So, beyond the alliteration, what does a restructuring mean? Focusing only on issues of the public good and how they get done and who contributes to them (what I might have previously called philanthropy) let’s think about this:

We know that nonprofits are under extreme duress financially. Our communities are filling with neighbors out of work, houses under water, questioning of the “American dream,” fear that the government won’t be able to “get us out of this mess,” closed shopfronts, under-performing schools, health care crises…you know the list.

Our collective financial assets have dropped by some un-imaginable amount—10 trillion USD? 30 trillion USD? These are numbers none of us can visualize, let alone really comprehend.

Most of us have also finally gotten the message that we live on “spaceship earth”—the resources of which are both finite and undergoing rapid changes for which we argue about the pace but can’t really begin to comprehend or plan for the impact of higher coastlines, arctic water passage, post-petroleum economics, and so on.

It doesn’t make sense to think of this as a dip in an otherwise upward trend. It is more like a turn off onto a different path. People born since 1990, all over the globe, have fundamentally different assumptions than those born before that year about where information lives, who controls it, where and how work gets done, what the “proper” role of government might be, where their friends live, how much personal privacy they have, want or value, what kind of resources will be needed to fuel their futures, what kind of innovation might fuel the economies in which they will live, and what their individual relationships to others—proximal and far away—are, could be, or might be.

So, what might now seem to be on the edge of philanthropy—or any industry—may very well come to its center. And quickly. Here are some ways restructuring might happen:

• Social enterprise begins to morph the philanthropic giving that exists to its left and the commercial enterprise that exists to its right (on a spectrum from giving to investing)
• Networks of individuals - deliberately or expectantly time-limited - get more done than organizations
• Individuals’ daily contributions and activities are a deliberate and recognized mix of paid and unpaid—and successful enterprises build themselves to catalyze those inside/outside, professional/volunteer, expert/amateur, user/producer contributions
• Philanthropic giving is really asked (read: required by regulators or purchased: in a marketplace) to prove its value in the funding food chain of producing social good. So are social investing, social enterprise, and socially responsible investing.
• Islamic finance and various Asian cultural practices regarding mutual aid, private capital for public good, and giving become as influential in practice as they are in number of people
• Enterprises and activities that generate economic, social and environmental benefits move from marginal to the middle—and innovation shifts elsewhere
• Schooling and educational systems evolve to prepare more kids for the skill, job and political markets they will actually face
• Cooperation on a global scale prevents or limits a global pandemic, and we learn from that
• We will no longer assume that nonprofit = social good, commercial enterprise = profit, rather we will think about what we need as a society (investigative reporters, an independent media, universal literacy, human rights) and figure out new forms of delivering those things
• Foundations will act like entities in the knowledge business, not as mere funders
• We’ll be working among a profoundly different set of dynamics between the public sector, commerce, and independent entities—and making the most of those changes

Such a future is already here. The debates about the future of the newspaper, working models in which indigenous knowledge informs medicinal innovation, free and open educational resources and tools to access them, debates on social innovation and business models, and the growth of the science commons, creative commons and (maybe even) a giving commons are early signs of movement in these directions. Linsky’s post above asked individuals which way they’ll go—hunkering down or resetting. These are choices at the individual level, but the larger forces are already in motion.

What do you think? Are we at a fork in the road? Which way will we go?

Lucy Bernholz is the founder and president of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award winning blog about the business of giving and serves as executive producer of The Giving Channel on Fora.tv.

Read more stories by Lucy Bernholz.