Wednesday, November 11, 2009

Markets and Saints

Markets and Saints

November 11, 2009 by Barak Epstein

Free marketeers receive a cool reception nowadays but neither is socialism making much of a comeback, unless you count its mention on signs at Tea Parties. It’s never easy to develop a coherent economic response to a crisis when old ideologies lose relevance. Pragmatism therefore demands that we employ the best tools of our current system to address its greatest ills; a young real estate advisory and consulting nonprofit I know is a case in point.

Real Estate Advisory and Development Services (READS) raises funds through arranging real estate deals for budding charter schools as well as through writing grants, the more traditional work of a nonprofit. The president, Brian Keenan, told me, “Folks ask for reduced rates for our services, which actually are about half the rate of a for-profit. I tell them, ‘Our time is valuable. We can discuss when payment is made but we are unwilling to reduce our fee.’”

Keenan is a former banker and doesn’t fear sounding too commercial for the more delicate sentiments of the world of do-gooders. At the same time, he readily admits that he began his company because his old boss told him that he was “spending too much time helping floundering nonprofits with their real estate problems.”

Keenan’s work is emblematic of a generation of nonprofits not imbued with the anticapitalism of the 1960’s, nor evincing the noblesse oblige of late-nineteenth and early-twentieth century reformers. The triumph of capitalism is implicit.

Firms such as Keenan’s aim to harness a bit of the tremendous accumulated capital in our country in order to catalyze the full economic participation of underutilized and undertrained social sectors.

The need and the opportunity are identical: Investing in socially marginalized children creates obvious value for the country entire but less obviously does so for particular, for-profit corporations. By leveraging the goodwill of socially-concerned citizens and, simultaneously, uncovering new profit streams, entrepreneurial-minded nonprofits demonstrate the latent productivity of large segments of the population and, eventually, attract further interest and investment.

Capitalism is excellent at providing opportunities to well-equipped and motivated entrepreneurs. It is less good at developing the talents, outlook, and networks of those who remained removed from its dynamics.

The wealth of our age gives us the luxury of seeking synergies between these two goals. Those who uncover such synergies have the potential to do good and to prosper.