by Harold Pollack
(This piece originally appeared at the Incidental Economist.)
Greg Mortenson's sad predicament should chasten the world of philanthropy and nonprofit services. Some of the most basic lessons concern boring mechanical matters such as financial statements and accounting controls. These mechanical niceties are an incredible pain and frustration--right up to the moment they are screwed up. It shouldn't have taken an investigative reporter to unmask this situation. Many nonprofit boards and nonprofit managers are untrained in this stuff, or they are simply too lax. This invites trouble.
I think there is also a more general market failure--or at least a general market challenge--in the philanthropic sector that is worth noting. If you want to attack a tough problem, it's often easiest to catch the imagination of funders and the public when you have a visionary, charismatic leader proposing some disruptive innovation. Mortenson is one such leader, but anyone involved in education, environmental advocacy, microcredit, crime control, or global health could identify many others.
I was at a meeting not long ago at which where a foundation leaders challenged the assembled experts: "Find me the next Perry Preschool." He's not the only one asking such questions.