This is the time of the year when NewYork’s traffic is gridlocked by two massive events focused on global problems – the General Assembly of the United Nations and the Clinton Global Initiative – and a plethora of smaller events making the most of the influx of world leaders, thinkers and celebrities. (Matthew is participating in two of these “fringe” events, the Creative Leadership Summit hosted by philanthropist Louise Blouin, and the Social Good Summit curated by the 92nd St Y and Mashable.)

Inside the United Nations, there will also be plenty of gridlock, we fear, at least on headline-grabbing topics like the politics of the Middle-East. Such progress that will be made will be on issues where the UN is engaged in a posse with business, non-governmental agencies and philanthrocapitalists, such as on tackling communicable diseases – thanks not least to the Ted Turner-created UN Foundation and its associated UN Office for Partnerships. But the true centre of posse action will be the Clinton Global Initiative, where the sheriff (or cowboy-in-chief – in a good way), Bill Clinton, will preside over updates and new commitments from dozens of posses bringing together people and organisations committed to doing what works across a wide range of global issues, although this year’s three main themes will be job creation, girl power and sustainable consumption.

Michael outlined our theory of the art of the posse-able at a recent discussion on development hosted by the World Bank in London, as blogger Owen Barder has reported. We first started talking about this approach years ago, after reading a rather dense section (starting on page 407) of the influential yet often incomprehensible book, “Empire“, by Michael Hardt and Antonio Negri. They saw the role of the posse as largely about bringing down (in a sort of neo-Marxist way) the established oppressive forms of government: “the name that we want to use to refer to the multitude in its political autonomy and its productive activity is the Latin verb posse – power as a verb, as activity.” We prefer to see the posse as a way that government, business, non-profits, philanthropists, celanthropists and individual citizens can work together more effectively to solve problems that cannot be sorted out by government alone (or any of those other actors alone, for that matter).

Posses, as we all know from cowboy movies, have two key characteristics. First, they are set up to achieve a specific goal that is both necessary and achievable, such as catching the black-hatted cattle-rustlers. Second, they are voluntary, collaborative associations – yes, coalitions of the willing: they may be convened by the town sheriff (doubtless wearing a white hat), but they are based on the active, engaged participation of others irrespective of their job or role.

In her excellent new book on the future of work, “The Shift“, London Business School professor Lynda Gratton talks about how every individual should form a posse to help them succeed professionally. Her thoughts on posse formation for the individual would apply equally well to any organisation meeting this week in New York: “Here is what I think a great posse is and can do: It’s a relatively small group of people [organisations!], who have some of the same expertise that you have – so there is enough overlap for you to really understand each other and add value quickly. Your posse trust you – they have ridden out with you before – you have been there for them in the past. So, these are folks you have known for some time and who like and support you. They come to your rescue [or join your campaign to solve a problem] quickly precisely because they can understand what you are up against and can help without distracting.”

Probably the clearest example so far of the posse approach to global problem solving is in public health. Take the example of the revived campaign to eradicate malaria, led by Ray Chambers, the private equity pioneer and UN Special Envoy on malaria. The Malaria No More campaign has the two key characteristics of a posse.

First, there’s the goal, which is certainly specific – malaria no more. The fact that a child dies every 45 seconds from this preventable disease is also enough to persuade most people that this is a worthwhile necessary goal. It is achievable, since malaria has been eradicated in other countries. Second, it is a coalition. Chambers, blessed by the UN, is the sheriff, but he is not working alone. Indeed, the biggest contribution is coming from the Bill & Melinda Gates Foundation, which has used its own cash to breathe life into malaria research but also, crucially, to leverage others. The Global Fund that Gates seeded is a special purpose vehicle, the posse as an institution, created to pool money from governments, philanthropy and business. Together with the Malaria No More campaign, the Global Fund has mobilised a diverse coalition, from governments to big companies to celebrities, to bring sufficient resources to be bear to solve the problem (The Global Fund is also a unique institution of global governance where the board is made up not just of the usual rich countries but also representatives from developing countries, civil society, philanthropic and the private sector. The World Bank, by contrast, is run by governments alone and controlled by the rich countries, which have the lion’s share of the voting rights because it is their cash.)

Will the malaria posse succeed? Let us hope so – and not just because that will save millions of lives. Its success is crucial if it is to inspire other posses to take on other challenges. Happily, more posses are forming already. The Elders, the Richard Branson inspired and Nelson Madela anointed group of former heads of state and moral leaders, has announced that it wants to end child marriage within a generation. Maybe this is merely a high-minded aspiration (we hope not); if they are serious, they will need to form a serious posse.

A world of posses will appal some people. The posse, they object, is a relic of a lawless, institution-less past. Yet maybe we need to accept that a multi-polar world in which the G7 countries are no longer dominant, and the traditional multilateral agencies such as the UN are clearly limited, is more like the Wild West than, say, Switzerland.

We will return to these crucial topic shortly in a more detailed essay on The Art of the Posse-able, but for now we leave you with the words of John Wayne, “Tomorrow hopes we have learned something from yesterday.”

As we have argued before, the natural disaster in Haiti provided an important test of philanthrocapitalism. In a blog post soon after the quake we outlined a range of things that philanthrocapitalists might do, and concluded that “although this is a terrible tragedy, it is also an opportunity for creative thinking – for doing things much better than before. This has been probably the biggest contribution that the philanthrocapitalists have made to global development – new ideas that challenge orthodoxies and conventional wisdoms.”

The Rolling Stone article quotes Matthew repeating our view that “the hope is that using the private sector will be a lot more efficient. Traditional aid has been extremely wasteful. When it is allowed to take the lead, the private sector is more likely to try something new or entrepreneurial.” It then quotes Matthew saying that “ultimately it all comes down to governance. There was this tremendous outpouring of goodwill after the earthquake, and this idea of ‘build back better’ caught on — but for all their consultations, no one really found out what the Haitian people’s concept of build back better actually was.”

Clearly, things have not gone as well in Haiti as, in our more optimistic moments, we had hoped. Yet the positioning of this second quote in the article means that a reader might easily interpret it as pinning the blame on the trampling of Haitian democracy by what “might be called the ‘New American Plan’” and “the demands of the bottom line”. That is not at all the meaning of Matthew’s quote, which actually was about how difficult it is, with the best will in the world, for philanthrocapitalists to succeed in a country where there is failed political governance and a lack of serious interest by local politicians in delivering what their people want.

A reader might also wrongly interpret Matthew’s quote as a criticism of Denis O’Brien, the Irish philanthrocapitalist boss of Digicel, a mobile phone company. Actually, Mr O’Brien has been one of the more effective supporters of Haiti since the earthquake, showing that a smart philanthrocapitalist can make a positive difference even in the most inauspicious circumstances.

Ultimately, the Rolling Stone article, whilst containing much genuinely disturbing and distressing information, fails to prove its case that the continuing problems in Haiti are due to the bottom line being given too great a role. Nor does it provide any reason to think that an alternative, non-philanthrocapitalistic approach would have worked any better than what was tried. Which is not to deny that mistakes were made by the philanthrocapitalists who have tried to help Haiti; it is just not clear from the article what those were or how they might have been avoided.

Yet although it is flawed, and we still think there is hope that philanthrocapitalism can help build a better Haiti, we welcome Rolling Stone‘s scrutiny of what is happening there, and the debate it will hopefully provoke about what could be done better – a debate that, no doubt, President Clinton will be continuing to lead next month at the Clinton Global Initiative. As we wrote with regard to Haiti in The Daily Beast, “Our giving is an act of the heart, but that should not stop us from thinking hard about how to ensure we are putting our money to the best possible use.”

P.S. Former President Clinton is also a fan of our other book, The Road From Ruin, which (like Philanthrocapitalism) would make an excellent Christmas gift. You can see President Clinton talking about the book here.

Maybe this should be a model for all political memoir writers? After all, they are largely making money out of the public’s interest in how they performed their public duties (and if they really need to cash in on their experiences, they can do so in other ways through directorships, consultancies and speaking fees). Perhaps Mr Blair could make this the start of a political giving pledge to mirror that of Bill Gates and Warren Buffett in the business world – how could Prime Minister Cameron, or Mr Blair’s old chum former President Bush, refuse if asked to sign up to give away, say, at least half their book proceeds?

But why stop at politicians? As we write in the book, ex-leaders such as Messrs Blair and Clinton, are a subset of a category of philanthrocapitalists called “celanthropists”, whose fame is a key source of their ability to drive change. How about the rest of the celanthropists following Mr Blair’s example? Ludicrously well-paid sportsmen, like Britain’s footballers, pump out mind-numbingly tedious ghost-written memoirs for the Christmas market each year – how about turning at least a chunk of those earnings over to the public good? So too with those celebrities who do nothing except be a celebrity. Their giving, unlike Mr Blair’s, might actually be a smart piece of PR.

Credit where credit’s due, Barron’s put eBay founder Pierre Omidyar and his wife, Pam, at the top of the list, in his case a welcome rehabilitation for a donor who has had some wobbles institutionalising his philanthropy but has now moved on to really apply the principles of philanthrocapitalism to his do-gooding. Nor do we object to Barron’s decision to pick ‘usual suspects’, many of them featured in our book, such as Bill Gates (number 7 on the list), George Soros (19), Eli Broad (4) and Bill Clinton (13), all of whose philanthropy has broken new ground in 2009. Yet, with no disrespect, it is hard to say that 2009 has been a big year for Sir Richard Branson’s (10) giving. Similarly, the Tribeca Film festival (14) is a great event but does an impact of “5,000 teens danced at one outdoor screening in Manhattan”, really count as world-changing?

So, today, we would like to honour five philanthrocapitalists who should have been on the Barron’s list – the Philanthrocapitalism Forgotten Five:

1) Mo Ibrahim: the Nobel Peace Prize committee couldn’t think of anyone to honour this year, so they gave it to a guy they hope will achieve something – Barack Obama. (See our comments on how Obama should have responded to that decision.) No such timidity from Sudanese telecoms tycoon Ibrahim when he couldn’t find a suitable recipient for his annual prize for the best African leader. His foundation didn’t just refuse to make an award, they also explained why. Take that Thabo Mbeki! Bad politics is behind so many of the development challenges in Africa – Ibrahim’s effort to create a debate about political leadership is real smart, strategic philanthropy.

2) Jet Li: the once curiously American habit of giving is going global and film star Li is leading the charge in China. His One campaign is working to make giving an integral part of Chinese society for the first time by getting those who have benefited from the country’s spectacular economic growth to start giving back to help others less fortunate than themselves. Bill Gates thinks that emerging economic powers like China could become the new big players in philanthropy – Jet Li is making this happen.

3) Global Impact Investing Network (GIIN): it isn’t a person and it isn’t just about giving but GIIN, which was launched in September 2009, is looking to have impact that would dwarf all the giving in the world. This network of foundations, like Rockefeller, and banks, from the socially minded Shorebank to the red in tooth and balance sheet Citigroup, is trying to get more of the money sloshing around the world’s capital markets to be invested in projects that do social and environmental good. As they say, if just 2% of the world’s capital were used in this way that would be $500 billion. Now that would be impact.

4) Jerry Hirsch – the philanthropist behind the Lodestar Foundation (slogan: “seeking happiness through philanthropy”), which this year awarded its first “collaboration prize” for the best non-profit collaborations in the US. Hirsch, who sees his mission as encouraging effective philanthropy, understands the need to leverage money by addressing the inefficiencies in the non-profit world, one of the greatest of which is the “not invented here syndrome” that leads many non-profits to go it alone rather than collaborate, let alone merge (as many of them should). The first winners were a YMCA that merged with a Jewish Community Centre in Toledo, Ohio, and three museums in Dallas that merged. This is a vital trend to encourage in a year when, more than ever, “the name of the game is to make your dollars go far – very far”.

5) You: the rise of mass philanthrocapitalism has been the biggest trend of 2009. At the end of October online microfinance site Kiva.org announced that it had broken the $100 million barrier, just five years since it started, and is on track to $1 billion in the next five years. That is unheard of growth for the nonprofit sector. Donorschoose, globalgiving, Facebook causes – the list goes on – the internet is mobilising and empowering givers like never before. Yes, Kiva faced a bit of a backlash towards the end of the year, with accusations that it was misleading its members. These criticisms were rather overdone, although Kiva’s speedy response has improved how it works, and also signalled how quickly expectations and ambitions are changing. You don’t have to give and just hope that you’re doing good these days – internet giving has empowered you to know where your money is going. Use it!

Well, there ends our retrospective of 2009. Watch out for our predictions for philanthrocapitalism in 2010, coming soon.

Comment from Trevor Neilson of Global Philanthropy Group:

Thanks Matthew and Michael for weighing in. The goal of the Barron’s ranking was to begin a lively, global debate about outcomes in philanthropy. We feel that philanthropic impact is more important than philanthropic process – and yet most reporting on philanthropy does not address the impact it achieves. As noted in the Barron’s piece, the process of ranking philanthropists is extremely difficult and by its nature requires a great deal of subjective decision making, primarily because quantitative analysis is difficult across issue areas that do not share common metrics. We welcome everyone’s criticism of the list and hope that you and other leading thinkers will offer your own lists of the most effective philanthropists.

“In politics, most debates focus on two questions: What are you going to do? and How much money are you going to spend on it? Too little attention is given to what is often the most important question: How are you going to do it?

Bishop and Green document the relentless focus of the best social entrepreneurs on the How questions: How to keep HIV/AIDS and malaria from killing people? How to empower and educate the poor? How to reverse childhood obesity in the United States? How to fight climate change and increase economic opportunity? How to get other people working on these problems? How to turn good intentions into positive changes? How to do it faster and at lower cost than government alone can?

I often say my foundation is in the “How” business: We’re helping deliver AIDS medicines to adults and children, more than 2 million of them in the developing world, by changing the business model from high margin-low volume to high volume-low margin. We’re helping forty of the largest cities in the world reduce their greenhouse gas emissions by providing new technologies at volume discounts and offering new financing options. We’re supporting the efforts of thousands of schools to create healthier learning environments by reducing the caloric content of beverages and snack foods in vending machines and offering low cost, high impact options for improving the fitness of students and staff.

We’re using the same business-oriented approach to ensure money is spent efficiently and effectively to increase economic opportunity in Latin America, Africa, and U.S. cities. You can see the same approach taking hold throughout the world. Nobel Peace Prize-winner Muhammad Yunus pioneered with the Grameen Bank‘s microcredit loans, which have helped lift more than IOO million people out of poverty across the world. The Gates Foundation has used it to save countless lives from malaria, to search for better ways to prevent HIV/AIDS, and to improve education in poor communities in the United States.

I’ve tried to increase the momentum and impact of those in philanthrocapitalism through the Clinton Global Initiative (CGI). Since 2005, we’ve invited philanthropists, political leaders, business executives, leaders of nongovernmental organizations, college presidents and students, and citizen activists from around the world to meet in New York at the opening of the U.N. They discuss the big how questions, develop their own answers, and make specific commitments to implement them. To date, members have made more than 1,400 commitments valued at $46 billion that have already improved the lives of more than 200 million people in 150 countries. CGI is, in many ways, the laboratory in which the authors’ ideas about philanthrocapitalism are tested.

At its best, philanthrocapitalism reinforces and amplifies the time, money, skills, and gifts given every year by people who are not rich, and it informs and enhances government policies. As Bishop and Green clearly demonstrate, the twenty-first century has given people with wealth unprecedented opportunities, and commensurate responsibilities, to advance the public good.

This is an important book. Our interdependent world is too unequal, unstable, and, because of climate change, unsustainable. We have to transform it into one of shared responsibilities, shared opportunities, and a shared sense of community. Bishop and Green show us how to do it.”

We want to give away one of our copies before publication next month, and have decided to hold a competition. Go to our new Facebook fansite, join up and simply answer this question in one sentence (or so): will the Gates Foundation or Kiva.org have a greater impact on poverty and why? Post your answer as a comment and we’ll choose a winner on Sunday. Good luck!

Many critics of the Nobel peace prize will regard this award as further damaging the reputation of a philanthropic prize that has lost much of its credibility over the years by honouring such peacemakers as Henry Kissinger and Yasser Arafat. Even Al Gore’s win, following his climate change movie, “An Inconvenient truth”, has been cruelly lampooned as a prize for mastering the art of Powerpoint presentation.

That it was endowed by a 19th century munitions tycoon, Alfred Nobel, is also widely noted by critics of the peace prize. As we report in the book, and on this blog, prizes are increasingly back in fashion among today’s philanthropists – yet what their prizes increasingly aim to do is incentivize future behaviour that the philanthropist wants rather than honour past achievements like the Nobel.

The X Prize Foundation is perhaps the best example of this new trend, with its prizes for achievements such as commercial manned space flight, rapid cheap mapping of a human gene, and building a super-fuel-efficient car. A recent study by McKinsey found that there has been a sharp increase in what the consultancy calls “inducement prizes”. Of the philanthropic prizes introduced before 1990, with a total purse of $55m, only 3% were incentivizing behaviour, whilst the rest were “recognition” prizes celebrating past achievements. Since 1990, of the new prizes announced with a combined purse of $302m, 78% have been inducement prizes.

A more positive way of looking at Obama’s award is that the Nobel judges are trying to turn the Peace prize into an inducement prize. By honouring the President’s fine words at the start of his time as the most powerful man on earth, perhaps the judges are hoping that this will encourage him to put them into practice.

If so, here is a modest proposal, Mr President. By all means travel to Oslo to give your acceptance speech on December 10th, but when you give it, tell the audience that, though you are humbled and honoured by the award, you are not willing to accept it yet. Then pledge to return to accept it properly after you leave office, but then only if the judges take another vote and decide it is still merited. That way, the prize will really mean something – which, if it is accepted unconditionally now, it really won’t.

The report, produced in partnership with the Climate Group, a business-backed organisation campaigning for action to counter global warming, lists seven “tried and tested” policies which Blair says could achieve the goal of getting carbon emissions to peak by 2020, and decline thereafter. It is part of Blair’s “Breaking the Climate Deadlock” initiative, designed to generate political pressure around the world for a breakthrough at the climate change summit in Copenhagen at the end of the year.

“Now is the moment,” said Blair. “Up to now, climate change has been an issue around which there has been an immensely important and successful campaign, but this is the moment when we take this out of the position of a great campaign and into the position of practical policy.”

Tackling climate change is one of a portfolio of philanthropic initiatives that Blair has chosen to pursue since leaving 10 Downing Street in 2007. Chosen is the key word: as Blair told Matthew in a recent interview at New York’s 92nd St Y, one of the things he likes most about his new life is his ability to choose what he focuses on, rather than being at the mercy of events, as he was in office. Now, as well as climate change, he is choosing to focus on development in Africa and promoting better relations between the world’s religions through his Tony Blair Faith Foundation, as well as continuing to work as a peace envoy in the middle east. (You can watch here excerpts from Blair’s interview at the 92nd St Y, in which he talks about prospects for peace between Israel and Palestine.)

As we write in Philanthrocapitalism, Blair is following in the footsteps of two former American presidents, Jimmy Carter and Bill Clinton, in pursuing a post-governmental career built on philanthropy.
As, like Clinton especially, Blair did not leave office a rich man, the assets he gives are essentially his personal brand and convening power, which makes his philanthropy a politically-coloured version of the celebrity giving we call celanthropy. There are many positive aspects to this, as both Carter and Clinton’s efforts have made clear – and, like them, Blair may well do more good out of office than he did in it. As yet, however, there is no plan to follow Clinton’s lead by launching a Blair Global Initiative – though it surely cannot be ruled out at some point.

Like Clinton’s, Blair’s brand is global and powerful, yet comes with a complicated legacy from actions taken in office. This legacy certainly makes effective philanthropy harder. In an article in the New Yorker a few years ago, it was argued that Clinton’s philanthropic commitment to Africa was prompted in part by his guilt at failing to do more for the continent when he was in office. Some observers suggest that similar feelings may be driving Blair’s promotion of religious harmony, given that many people feel that America’s invasion of Iraq, which he supported with British troops, significantly worsened relations with Islam, for example – though as Blair told Matthew, he remains adamant that the invasion was the right thing to do.

As Blair joked, saying that his goals are to help bring peace in the Middle East and between religions often prompts people to look at him as if he has taken leave of his senses. His Africa Governance Initiative, by contrast, seems far more down to earth. Here, his aim is to work with African leaders (such as Paul Kagame of Rwanda) to build the capacity of their staff to deliver poverty-reduction policies. Given that in government Blair helped secure billions of dollars in new government aid to Africa, and given the growing fear that this money will be wasted, it is encouraging that he recognises the need for Africa to increase its ability to govern itself in ways that promote prosperity, and that he is doing something practical to help.

Matthew moderated a panel on neglected tropical diseases, in which the mood was very positive: the panelists agreed that putting money into drugs, and delivery systems, for these diseases has perhaps the highest return on investment of anything you can spend on in development. That should make it a relatively easy sell at a time when philanthropists are especially focused on getting maximum bang for their bucks. There is a good chance of making progress on each of the 13 leading NTDs by 2015.

Clinton delivered a powerful closing speech in which he reinforced the message of philanthrocapitalism, saying that on public health, and other philanthropy, when every dollar is so scarce, it is “immoral not to be relentlessly focused on effectiveness every single day”. He predicted that the non-profit sector will have to go through a restructuring of its funding and business models similar to that which the financial sector is now undergoing, and that direct fundraising from the public via the internet will be increasingly important.

He also said that the particular focus of this year’s meeting of the Clinton Global Initiative will be on how the philanthropic and for-profit firms can better leverage public spending to make government as effective as possible. In this new era of rapidly expanding government, that is absolutely the right issue to put top of the agenda.