A recent article in the NYTimes focuses on Vinod Khosla, co-founder of Sun Microsystems. Some of the article discusses the relative lack of philanthropy among rich Indians, but most of it is about his belief in the power of capitalism to improve living conditions in developing countries — and his lack of belief in NGOs for the same purpose.
Mr. Khosla’s advocacy of the bootstrap powers of capitalism is part of an increasingly popular school of thought: businesses, not governments or nonprofit groups, should lead the effort to eradicate global poverty.
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Mr. Khosla says that he is not completely opposed to charities — that his fund may even donate to some nonprofit entities. But he says he is generally skeptical that nongovernmental organizations can accomplish much because they tend to drift away from what their donors wanted them to do.
I’m sure many charities will appreciate that he isn’t completely opposed to them.
My view is that it’s strange to set this up as a dichotomy between so-called social enterprise (remember ‘double bottom line’ accounting?) and not-for-profit development. To be fair, perhaps that was the journalist going for a story, but I think people do sometimes see it as either/or rather than and. It’s clear that market forces can lift countries out of poverty (I’m thinking of, say, the USA), but it’s also clear that market forces have been at work for many decades in some countries that are still very poor. There’s every reason to think that NGOs (and even aid, although that’s obviously a charged issue nowadays) can play an important role here.
