Spring 2013 – Books in Brief

Reviews of new books on why philanthropy matters, conscious capitalism, school leadership, and creating a charter school.

Why Philanthropy Matters: How the Wealthy Give, and What It Means for Our Economic Well-being
by Zoltan J. Acs

Acs argues that philanthropy is a little-studied but indispensable element in a cycle of what he calls “American-style capitalism.” Philanthropy is at its best, he argues, when it fuels opportunities for others to start enterprises and create wealth, sparking a fresh cycle of success. The process forms a virtuous circle that looks like this:  opportunity → entrepreneurship → wealth → philanthropy → opportunity. (If this sounds familiar, it may be because it resembles the cycle Claire Gaudiani sketches in Generosity Unbound.) “This cycle of giving,” he writes, “has been an essential ingredient of American capitalism throughout the country’s history. Americans’ motivations for giving money, as well as the outputs of their generosity, are woven into the entrepreneurial spirit of America.” The book has its weak spots: Acs perpetuates a false dichotomy between “philanthropy” and “charity,” which often becomes his inelegant shorthand for “giving I like” and “giving I don’t like.” Here, universities (unsurprisingly, for a university-based economist) and K–12 education represent good giving; art collections are nothing but tax shelters for greedy billionaires. He also argues for a higher estate tax to prevent too much wealth from accumulating with any one individual or family. (Never mind that, as John Steele Gordon has pointed out in these pages, American fortunes tend to disperse quickly within a few of generations with no assist from the estate tax.) Acs’ major achievement here is to understand philanthropy’s oft-neglected and uniquely American role in economic growth. If we sense a decline in innovation, entrepreneurship, or economic opportunity, he argues, the best solution is not government intervention—but rather more and better philanthropy.                             

—Evan Sparks

Conscious Capitalism: Liberating the Heroic Spirit of Business
by John Mackey and Raj Sisodia

Bravely confronting contemporary suspicions of markets, Whole Foods Market co-founder Mackey argues that for-profit business can create enormous value for all of society. But contrary to Milton Friedman’s assertion that free-market businesses must exclusively serve the interests of shareholders, Mackey and co-author Sisodia contend that companies can and should play a role as value-creators for a broader array of “stakeholders.” What they call “conscious capitalism” emerges from a business management structure that explicitly factors the well-being of employees, customers, suppliers, local residents, and the environment into daily business decision-making. Sisodia (in, bizarrely, an appendix) compares the financial viability of conscious enterprises—Whole Foods, Costco, REI, Southwest Airlines—with their competitors, and makes a strong case that conscious capitalism can return exceptional results to shareholders as well as other stakeholders. Within the authors’ “business-citizen” model, a conscious business can remain profitable while acting responsibly to meet some community needs “on a local, national, and potentially global basis.” Mackey and Sisodia distinguish this model from corporate social responsibility, which they see as a concept born out of a misunderstanding of business as bad for society. “Business is good because it creates value,” the authors write, “it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence, and it is heroic because it lifts people out of poverty and creates prosperity.”              

—Adam Sawyer

Cage-busting Leadership
by Frederick M. Hess

There are many smart people writing important books about education reform, but it takes a special kind of writer to effortlessly weave Billy Crystal, Moneyball, and Al Capone into the argument. Hess, director of education policy studies at the American Enterprise Institute, pulls it off. Cage-busting Leadership is full of valuable insights into the ability of “cage-busting” education leaders to solve the seemingly intractable problems of our K–12 system. Hess provides a variety of strategies leaders can deploy, from tactics as simple as doing away with a district’s central warehouse to strategies for removing consistently underperforming teachers (legally!). Much of the book deals with the mindset of “cage-busting” that school leaders must develop if they are to persist past barriers, both real and imagined. Hess makes clear distinctions between these two types of obstacles, and for good reason: oftentimes, leaders are gun-shy over confronting “local policies, accepted practices, and district conventions that can be more readily altered.” Much of Hess’ wisdom should resonate with donors weary of promised district reforms. Philanthropists should have the phrase “It’s not reform if it costs more” emblazoned on bumper stickers and handed out at district headquarters. They will certainly recognize their importance in providing cover for a bold leader through program-specific grantmaking. As philanthropists increase spending on advocacy efforts, it’s also worth examining Hess’ carefully selected anecdotes about change. As he aptly puts it: “Policymakers can make people do things, but they can’t make them do them well.” Regulatory change without visionary leadership will yield little more than piles of paper. Perhaps Hess’ most interesting advice for funders is the need to help leaders find and retain capable, aligned legal counsel. As one Ohio superintendent put it, seek out a lawyer who says, “Where do you want to get? We’ll find a way to get you there.” Settling for in-house counselors who simply play harbormaster will inevitably stifle cage-busting leaders who should “make ambiguity and uncertainty work for them [through] creative, tough-minded legal assistance.” Rick Hess, like Eliot Ness, doesn’t want donors and reformers bringing a knife to a gun fight.                 

—Dan Fishman

Getting to Bartlett Street: Our 25-Year Quest to Level the Playing Field in Education
by Joe and Carol Reich

Joe and Carol Reich built one of America’s first charter schools in Williamsburg, Brooklyn. In telling their story, they take a tag-team approach, alternating chapters and giving a day-by-day, behind-the-scenes look at what it takes to challenge the public-education bureaucracy. Joe founded a leading investment firm, and Carol, a Ph.D. in developmental psychology, was a school president. They were inspired to start a school through their experience with the “I Have a Dream” program, in which donors promise underprivileged middle-school students full college tuition if they graduate from high school. After meeting their “Dreamers” at their New York City public middle school, Carol observed: “We may be getting these kids too late. We might not be able to do enough.” Although committed to their investment, the Reichs worried about the viability of the scholarship program, since many students were already well behind grade level in core subject areas. As they learned more about the New York City public-school system through working with their Dreamers, the Reichs formed plans for their own school. A non-district-run public school was then a novel concept. They took a hands-on approach to launching what they called Beginning with Children. Carol selected the paint and bought the furniture; she was a regular fixture on campus from day one. Recognizing the importance of community and parental involvement, parents were invited to visit and to volunteer in the lunchroom and classroom. The Reichs plainly describe the many hurdles they faced in setting up the school—choosing a strategic location, dealing with education-board members and officials. They are candid about bumps along the way: violence in the community, inconsistent school leadership. Joe and Carol Reich proved adept and tireless in dealing with the New York City public-school bureaucracy. When the charter-school movement took off more broadly, the Reichs helped establish several other institutions, and their success and expertise led them to become key figures in New York City public-school reform—well beyond their initial goals in founding Beginning with Children. “Looking back now,” they write, “we know that just because our idea—to start a public school, as private individuals—had never been done before, that was no reason not to do it.”       

—Kari Barbic

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