Movember began in Melbourne, Australia, in 2003 when Adam Garone and a few friends fancied growing moustaches, but did not want to suffer the inevitable mockery from their mates, so added a fundraising element. It is now probably the world’s largest non-government source of funds for research into prostate cancer, and is spreading unsightly facial hair across the globe, from neighbouring New Zealand to America, Britain and beyond.

Its success is a reminder that small scale giving by all of us can raise the sort of sums that can make a real difference – mass philanthrocapitalism as we call it in the paperback. It also highlights a couple of important trends: one is the growth of partnerships between mass charity, celanthropists and super-rich philanthropists. Movember has formed partnerships with Lance Armstrong’s Livestrong Foundation and with Michael Milken, the once-disgraced “junk bond king” who since his brush with death from prostate cancer in the early 1990s has masterminded through his foundation one of the most successful philanthrocapitalist assaults on a deadly disease ever seen. Garone says Milken takes a close interest in how Movember is getting on, and has been a great source of advice.

Movember is also an example of how smart philanthropy can tackle some of the huge inefficiencies in the non-profit world. Garone says that as Movember spread around the world it noticed that there was very little communication between scientists engaged in prostate cancer research in one country with their peers in other countries. As a result, there was much unnecessary duplication, and missed opportunities from failing to learn quickly about breakthroughs made abroad. Movember is the driving force behind a conference planned next year at which all the scientists it funds around the world will meet together to talk about their work – which could greatly increase their productivity in the fight against prostate cancer. Being an Australian organisation may have made it easier to make this happen, Garone says – as if Milken had called for such a global meeting, there might have been resentment at yet another example of American imperialism.

This is Movember’s most successful year yet, and deservedly so. Garone’s greatest worry, he confesses, is that the moustache might one day become the height of fashion, so that nobody would be inclined to give money to get someone to grow one. Happily, as tonight’s display of ludicrous face furniture is likely to make hilariously clear, there seems little chance of that!

Last week, world leaders at the G20 meeting were harrumphing about bankers’ bonuses. Should they be turning their guns on highly-paid philanthrocrats?

Absolutely not.

The tendency to judge nonprofit management by the scratchiness of their hair shirts (on the basis that paying decent salaries is a ‘waste’ of precious charitable donations that should be going to the beneficiaries) is widespread. Yet this is a dangerous canard. A cheap bad leader is much worse than a well-paid good one. Better pay could, with care, attract better leaders to the non-profit sector and enable valuable donations to be better used. The art, as in the for-profit world, should be to ensure that reward follows real talent and incentivises real achievement.

According to the sources quoted by the Chronicle, Raikes did not even want a salary (his predecessor and fellow Microsoft veteran Patti Stonesifer took no money) but the Foundation decided that paying the CEO was a point of principle. Although outside philanthropy, some wealthy bosses, from Larry Ellison of Oracle to Michael Bloomberg of New York City, are now working for an annual salary of $1, the Gates Foundation is right that this is a sensible principle to establish. It would be a mistake to make a career in philanthropy the exclusive preserve of those with private means.

There is of course one obligation that Raikes does have to meet – to give in his own right (our ‘good billionaire guide’ applies equally to those with just a few hundred million in the bank), which he seems to be doing.

He should also have to perform well to earn his money – something that, as Matthew wrote when he was appointed, may be hard to judge, given that his role seems to overlap with that of the increasingly active creator of the foundation. Raikes may be the only $1m-a-year CEO on the planet who is not actually in charge!

Schambra rightly points out that many small nonprofits do great work and are being hit by a funding squeeze.  But he then makes two giant leaps of pessimism to argue that philanthropists should stick to the basics of doling out small grants.

First, Schambra predicts that tough economic times will drive corporate do-gooding off the agenda. This is surely wrong. Yes, corporate donations are definitely going to be hit, which seems to be a strange thing to be crowing about, but smart corporate leaders recognise that cutting back on giving can be a false economy. 

Moreover, leading philanthrocapitalists are sure to continue to try to find ways to harness the profit motive. This is not because they think, as Schambra suggests, that “profit making has become as easy as rolling off a log”, but because they understand that, as in the case of microfinance, if somehow they can find a profitable way of solving a problem it can mobilise far greater amounts of capital than will ever be forthcoming from charitable grants.

Second, he pours scorn on the Ed in ‘08 campaign funded by the Gates and Broad Foundations to push education reform up the agenda in last year’s election. Schambra rates this an outright failure (”dead in ‘08″) and hopes that it will persuade philanthrocapitalists to abandon ideas of leveraging big policy changes. When Matthew discussed Ed in ‘08 with Eli Broad at the 92nd Street Y last month, Broad was frank that the campaign had not achieved the national impact he had hoped. Yet he thought there had been some gains at state and city level, as well as a good response from the leading presidential candidates, including the one who got the job. As it happens, Broad is extremely optimistic that the Obama administration will push many of the education reforms that he and other philanthrocapitalists have long supported. Besides, even if ED 08 was a failure, so what? Since when has the risk of failure been a reason for a philanthropist not to try something?

Schambra also concludes that philanthrocapitalists should give up on trying to influence the government stimulus package and instead focus on giving to small organisations that won’t benefit from this flow of cash from the taxpayer. Surely it is worthwhile for foundations to risk failure by trying to get government to use a trillion dollars wisely rather than sounding the retreat from engagement with the government, and ending up spending tiny sums by comparison trying to paper over the cracks?

Schambra says he wants humble philanthropy.  His prescriptions set an agenda for timid, turn-back-the clock-philanthropy, which would only result in humble impact.

Giving by major donors in the US doubled to more than $15 billion in 2008, from $7.3 billion the year before. Nine out of the ten biggest donors appeared on the list for the first time. That is the headline message of the latest Philanthropy 50 list produced by the Chronicle of Philanthropy.

Measuring giving is notoriously difficult.  It is hard to talk about year on year trends when a mega pledge one year can send the headline figure soaring. (Warren Buffett’s pledge to the Gates Foundation made 2006 the most generous year on record, with the top 50 donors giving away $50 billion.) The 2008 total got a boost from the Grim Reaper, for this was a year that happened to see big bequests taking up 7 out of the 10 top slots on the list, led by the notorious tax-dodger Leona Helmsley. 

There are also the problems that money pledged isn’t money given away, and even then actual donations usually go into a foundation that will use that capital to make grants over many years.

So the apparent boom in 2008 does not mean that funding is any easier for nonprofits. All the commentators agree that things are tough at the moment, as many of the super-rich are having to adjust to life with a few fewer billions of dollars. Philanthropy is not going to beat the belt-tightening.

But more important than the sums given, as we argue in the book, is the impact of giving. What does the list tell us about that? The large number of bequests is not a particularly good sign – the knowledge and skills that philanthrocapitalists bring to their giving is just as important as the money. If only Helmsley had applied all hercreativity to giving rather than fidling her tax returns. 

Yet there were two positive trends that the Chronicle reports in its analysis: first, a growing interest in climate change, particularly a $100 million gift by financier Gerhard Andlinger to Princeton University for a new centre on energy and the environment, which shows that philanthropists want to take on big, strategic issues; second, a focus by donors on rewarding good nonprofit leadership, which is going to be needed more now, in these difficult economic circumstances, than ever.

For more on prospects for philanthropy in 2009 we recommend the Foundation Centre’s focus on the economic crisis. One of the failings of philanthropy during the Great Depression was that donors too often gave to local causes where their money had less impact because these were not the most deprived areas. Foundation Centre is tracking the geographical distribution of grants across the US – it will be interesting to see how well today’s philanthropy can target the communities in most need, co-ordinating its response with government.

People in non-profits tend to resist furiously the idea that there should be fewer, bigger, non-profits. When Matthew reported in his 2006 Economist article “The Business of Giving” John Studzinski’s belief that “there are about 40 homelessness projects in London; only eight are any good,” lots of outraged letters arrived within days.

Yet a growing number of philanthrocapitalists believe that their money could have far more impact if it went to larger, more efficient non-profits, and they are trying to broker mergers. In a new op-ed
(subscription required) in the Chronicle of Philanthropy, Matthew argues that the current economic downturn may make it far easier for philanthrocapitalists to convince non-profits to give M&A a chance. They are more desperate for money, which should make them more willing to think the unthinkable. Here’s hoping.

You can also watch Matthew’s discussion with Bill Clinton at the 92nd Street Y on Youtube .

The hot topic, of course, was the financial market meltdown and the impact on philanthropy, which was the subject of an article in the New York Times yesterday. We argued that, with a few exceptions, the rich are likely to come out of this mess better than others and that the need for their philanthropy is going to be greater than ever.

The Chronicle were also interested to get our response to critics from inside the philanthropy business who think the techniques of the philanthrocapitalists are inappropriate for the nonprofit world. We think this critique is largely based on a narrow caricature of the philanthrocapitalists but we do acknowledge that philanthrocapitalism is a disruptive force, which is no bad thing. As Joel Fleishman described in his outstanding The Foundation: A Great American Secret, philanthropy may have achieved a lot but it has also underperformed. Philanthrocapitalism could help philanthropy to live up to its potentail.