An observation on the downside (in philanthropy and other sectors) of growing big, and an interesting suggested solution—from leading education reformer Jay Greene (posted at his blog JayPGreene.com).
The Gates Foundation has just become too damn big for its own good. It’s so big and powerful that just about everyone in the education policy world gets money from them or hopes to. It’s so big that everyone within the organization is too eager to gain control over it, causing in-fighting and the need for rigid top-down controls. It’s so big that they can indulge foolish ideas and make irresponsible claims without fear of consequences.
One way Gates could check these problems is to divide its education unit into a Team A and Team B, each of which would operate independently with its own theory of action and reform agenda. The different Teams within Gates could then compete with each other to develop and pursue the best reform ideas. They could also help keep each other honest by having an interest to detect, reveal, and stop any intellectual dishonesty in the other.
Many people wrongly believe that organizations function best when they achieve greater scale and are streamlined, but this is incorrect in the peculiar world of government and nonprofit organizations. As Patrick Wolf and James Q. Wilson’s work on bureaucracy shows, redundancy within government can be a desirable arrangement. Having the FBI, DEA, and ATF all chasing drug dealers is beneficial because they compete with each to do the best job and win a larger share of congressional appropriations. Redundancy can simulate the choice and competition of the private market.
Similarly the division of power and responsibility between local, state, and federal governments as well as between the different branches of each government helps check abuse and corruption while providing some of the positive effects of choice and competition. Smart nonprofits should likewise develop a policy to split themselves into smaller competing units once they reach a certain size.