Peter Buffett, musician and philanthropist, wrote this piece — The Charitable-Industrial Complex — last week in the NY Times.

Much of what he says relates to the programmatic side of what major donors attempt to do and their motivations. For example, he describes “conscience laundering” …

“As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to “give back.” It’s what I would call “conscience laundering” — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.

But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over.”

He’s not very keen on business-minded donors using ROI as a measure of philanthropic success, nor is he a fan of microlending (which he regards as simply integrating more people into our system of debt). He views many “charitable” (he hates the word) interventions as merely “kick(ing) the can down the road”.

Sounds like a guy into breaking molds!

But here’s the comment that got me:

“What we have is a crisis of imagination. Albert Einstein said that you cannot solve a problem with the same mind-set that created it. Foundation dollars should be the best “risk capital” out there …

“Money should be spent trying out concepts that shatter current structures and systems that have turned much of the world into one vast market. Is progress really Wi-Fi on every street corner? No. It’s when no 13-year-old girl on the planet gets sold for sex. But as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine.”

Buffett is into transformation. And while he’s talking about funding systemic change to solve mega-issues, I suggest his core challenge — “Foundation dollars should be the best ‘risk capital’ out there” — should also apply to fundraising itself.

So I say: “Direct response fundraisers … meet your development directors!”

When was the last time your development shop went to a major donor or foundation and said: “If you will front up with a significant gift dedicated to significantly growing our organization’s financial base over the next three years, here’s the step-change our direct response team can deliver in terms of funds to advance our mission.”

The need for ‘risk capital’ is critical to seriously grow a charity, and indeed the charitable sector. Otherwise, to ‘re-purpose’ Buffett’s last line …

“…as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine.”

Tom Belford