The Magazine

Rich Rewards

He who pays the piper is getting his money's worth.

Mar 23, 2009, Vol. 14, No. 26 • By MARTIN MORSE WOOSTER
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So many charities created in the past decade aren't nonprofits but have mutated into something else.
Google.org, the philanthropic arm of Google, is deliberately designed so that sometimes it will act like a foundation in funding nonprofits and sometimes it will act like a venture capitalist in giving seed money to start-ups. Another hybrid is the Omidyar Network, created by eBay cofounder Pierre Omidyar, which melds a venture capital firm and a nonprofit. Omidyar says that he has created this form of giving because he is "pro-market, anti-big government, skeptical of traditional philanthropy."

And some people who would have run nonprofits in the past have decided that the market is the best way to help the poor. Bishop and Green report on the case of the Mexican social entrepreneurs Carlos Danel and Carlos Labarthe who wanted to help the poor of Mexico by providing small loans. Their nonprofit struggled until they reorganized it as a more traditional bank. Today, Compartamos Banco is a thriving bank which aids far more poor people than it would have as a cash-starved nonprofit.

While these innovative gestures toward the market by nonprofits should be encouraged, a more discouraging trend is the move by today's philanthropists towards left-wing political activism. While George Soros is the best-known example of this breed, Bishop and Green cite other examples as well. New York's mayor Michael Bloomberg has not only banned smoking but, as a philanthropist, has lavishly funded antismoking lobbyists around the world. The hard-core leftists Marion and Herbert Sandler have created ProPublica, which will provide "nonpartisan" investigative journalism to newspapers and magazines. ("It remains to be seen," Bishop and Green write, "if ProPublica will produce investigative pieces about the Democratic party, to which the Sandlers have been substantial donors.")

Of course, billionaires should be able to spend their money as they see fit. But wouldn't it be nice if someone pointed out to these liberal titans that spending large sums on the culture wars is not only a poor way to achieve the changes they desire, but could provoke their conservative counterparts to open their checkbooks to fund
counterattacks?

Martin Morse Wooster is a senior fellow at
the Capital Research Center and the author, most recently, of The Great Philanthropists and the Problem of 'Donor Intent.'