The Nature of Narrative in the Age of Networks

Michael Robertson recently wrote a controversial, and no less compelling piece on philanthropy, referencing the Bill Gates and Warren Buffet effort to direct half the wealth of the country’s wealthiest.

I agree with many of Michael’s points.  One in particular.

Some might say, “What can it hurt to have charities distribute money?”. History indicates it can have a hugely detrimental effect. One can examine the great charitable experiment called Africa to see how a half a trillion of well meaning donations prop up cruel governments, cripple economic freedoms, and retard meaningful change over the last 50 years. By any measure the monies have achieved the exact opposite effect. Africa has seen its GDP decline during the last 50 years along with a decline in life expectancy.

He goes on to suggest that free markets are a better solution to rectify inequities in the haves.v.have-nots.  I don’t totally jibe with his view on this, mostly because I don’t feel that truly free markets exist.  The game is rigged at the top, to a large extent, and is dominated by super-organism dynamics– increasingly huge, monolithic and non-innovative companies and governments perpetrating corporate imperialism.

In the note he sent around to a number of folks he commented that there is too much derision regarding large corporations.  It was probably rhetorical (so I apologize, Michael, for literally responding!).   I don’t agree with Michael that unchecked pseudo-capitalism is a good thing. I say “pseudo” because there is no truly free-market system.  The system is gamed constantly by the bigger players.  But that’s another blog.  The thing he said that stood out for me and piqued my interest was this:

Someone needs to explain why the 49th hire is a good thing, but the 50th or 500th is bad

There is is a real difference, as I’m sure everyone already knows.  It’s embodied in every dealing with a small, owner-operated business versus a massive, faceless institution.  The dynamics of ANY organization changes with size– commercial or philanthropic.

It’s not that the 500th hire is intrinsically bad, it’s that organizations behave inherently differently with size. They become organisms, the whole becoming more important than the sum of the parts. There are oodles of historical and evolutionary precedents, the most prevalent relate to military organizations. There is a reason that a military “company” has settled on the size of 150. There is a decent essay her that touches on those dynamics (though I’m not endorsing the writer).

A smallish organization is inherently more connected to an eco-system, as a whole. Larger entities tend to try to *become* the eco-system, or manipulate the eco-system for their own benefit. They are no less selfish and self-serving, but they are simply more powerful, and their reliance on the human individual becomes less pronounced– humans become a fungible asset (we even call them “human resources”), and those organizations tend to abstract themselves from the affect they have on the even larger organism (Earth!). They will ultimately respond to changes in the macro-ecosystem… but kicking and screaming all the way. They tend to become defensive, not innovate and responsive.

“Overhead” becomes an influential dynamic– perpetuating a status quo. Those human resources hired to facilitate the original mission become entrenched, and it’s more important for them to keep their jobs than make decisions to serve the mission or goal. The goal becomes to keep the job, and thus mediocrity and reduced innovation or efficacy often result.

The Catholic Church (in which I was raised) as an organism is many centuries old. It has outlived every member, and will outlive every member. The Red Cross is older than every human living today (unless someone knows a 130 year old person). They famously became a travesty of inefficiency. Any organism of size’s first-order of business is to perpetuate and proliferate the organism. Philanthropic organizations are no different.

IMHO, to be efficient, charity must be a human-to-human (or small group of humans to small groups of humans). There is less abstraction from the “context of the need” (that is, a large organization will have less understanding of the cultural idiosyncrasies to gifting or so-called “relief”), and financial and organizational overhead remains low. Philanthropy may make someone “feel good” when giving to a Red Cross or Haiti Relief fund… but the downside of perpetuating (or creating) an institution to administrate it will kill efficacy (or severely reduce it). Models like Kiva’s (and other micro-lending or micro-giving) seem like a better dynamic to me, but I have no direct evidence as yet.

People can be greedy. Organizations “of size” are inherently so.