Dani Rodrik's "Economics Rules": Too Narrow

I grabbed this book because it was making a minor stir in the blog-o-sphere.

It was kind of a let down. Rodrik is a bit of a rebel when it comes to economics discourse (once wrote a book doubting fully the benefits of globalization *fainting couch). But even then the options that he looks at seem narrowly circumscribed - mostly macro from new Keynesian to new classical! To his credit, Marx raises his head, if only to be dismissed.

What I really like is the framing of the book as looking at models, and how they are useful and how they are not as necessary simplifications of the real world - he even cites one of my favorite Jorge Borges stories to tell about the necessity of simplification. He also looks at the fox / hedgehog divide, in that true knowledge is knowing what model to use when looking at the explanation of a past event, and not over reliance on a strong theory that will too often lead you astray.

The big problem for me was that the model using is almost all backwards looking. If you know what happened and you can pick the right model you’re golden, but he discounts being able to know the future. Maybe I missed something, but isn’t a large part of trying to understand the past so that you can more accurately predict the future? If there is no ultimately one correct model and they do grow horizontally (a multiplicity) instead of replacing dead models as he calls it vertically, are we doomed to be having the same arguments generation after generation only with more powerful computers and fancier math?

The ACLU's Blind Spot

One of the things that have struck me as I was looking into the ACLU was that it does frame itself as the “guardian of liberty,” protecting constitutional rights, the organization is often perceived as a left-wing organization. One of my earliest political memories was the election of 1988, where the Democratic Governor of Massachusetts, Michael Dukakis, was running for president against the sitting vice president, George Bush in a time where you did not have to specify which George Bush anyone was talking about. Now, aside from the visual rhetoric of Dukakis looking silly in his tank commander helmet and the Willie Horton soft on crime advertisements, one of the attacks that stuck was that Dukakis was a "card-carrying member of the ACLU" (qtd in “Election”). In this exchange, it was the affiliation with the ACLU that was supposed to show Dukakis’s liberalness, and even his un-Americanness, but I did not really understand what was going on. I ended up growing up to be very liberal, but at the time I was young, and living in a military household in a military community, so much of what I heard was supportive of conservatism and militarism in a late- cold war atmosphere. Even then, I never understood just how these two ideas were related – that the ACLU was a liberal organization. 

            The organization is cognizant of this critique. In their own material, they point out three things to know about the ACLU, they put it like this: “We protect American values. In many ways, the ACLU is the nation's most conservative organization. Our job is to conserve America's original civic values - the Constitution and the Bill of Rights - and defend the rights of every man, woman and child in this country.” (Guardians of Freedom). In the same section, they strive to point out that “We're not anti-anything. The only things we fight are attempts to take away or limit your civil liberties[.]” (ibid).  In their works, they strive towards the same sort of balance, highlighting their advocacy for the Kul Klux Klan and Neo-Nazis to have the rights accorded to them in the first amendment for freedoms of speech and freedoms to peaceably assemble. The problem here, and what makes the ACLU seem a liberal organization is that it has worked to expand the umbrella of rights to a greater amount of people. The status quo has many staunch defenders, so any challenge to that brings those defenders out of the woodwork or wherever else they were hiding.

           

         This means that my proposal may be controversial because even though the ACLU strives to show itself as nonpartisan, in fact many of the big defenders are liberals – George Soros is a well know backer. My proposal is that the ACLU expand its donor base by not just keeping its focus on the five freedoms of the first amendment and instead look further afield in the bill of rights and muscle into a niche held by other organizations. Specifically, I am proposing that the ACLU target for its advocacy and fundraising supporters of the second amendment. There are as many guns in this country as there are people, and gun owners are a large plurality of the population. Looking around at the material the ACLU has, I found nothing where they speak of defending gun rights. This is important because the whole ground has been ceded to the NRA who currently takes an absolutist stance supporting a freedom that in its wording is ambiguous at best: “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” (Archives).  By ceding this space it gives ground to the rigid stance of the NRA and allows itself to be painted as a liberal organization which closes off the potential donor base. There is a huge caveat that such advocacy might degrade the donor base if this route is taken, but for me this is a huge blind spot for the organization.
 

Resources

ACLU. “Guardians of Freedom” (n.d.) American Civil Liberties Union. Accessed at https://www.aclu.org/guardians-freedom

The Bill of Rights: A Transcription. (n.d.). Retrieved February 07, 2016, from http://www.archives.gov/exhibits/charters/bill_of_rights_transcript.html

United States presidential election, 1988. (n.d.). Retrieved February 07, 2016, from https://en.wikipedia.org/wiki/United_States_presidential_election,_1988

Donor Mix

Is it better to secure funding from multiple small donors or one single huge donor?

What I really want is a deep-pocketed donor who is loyal to the cause. I want someone who never changes his or her mind. I want someone that is persuadable towards new projects and programs.

But here’s the most important part.

They have to never die.

Realistically though, choosing to secure funding from multiple small donors or one single huge donor, there are two sides here with the question.

Smaller donors mean that you’re going to have to spend more on each dollar you bring in. That’s more mailings, more admin time dealing with the donations, etc. The good side is that you are less reliant on any single donor. In addition, there is the thought that you can cultivate their giving as they grow in their careers.

One big donor is nice. The real big issue is that you become reliant on that donor. If you lose your funder for whatever reason – they have their own money issues, a relationship internally diminishes, there’s turnover at your agency, a new governor comes in and wants to prove his conservative bonafides by cutting social service – and then you have to scramble. So that means that it is nice to just have one relationship to cultivate, but there is a huge risk in dependency.

That’s why ultimately I think that the many small donors is better given the dichotomy, but ultimately you do end up with a mix of donors of many sizes. That means you still have the weaknesses of both of the two extremes, but you have more flexibility because you are not wholly dependent on one funder and you can also have a base to grow and nurture.

Mining Relationships to Grow Your Fundraising

At our agency (CSS – where I work), the vast bulk of the funding comes in through governmental sources. From memory, I think it is something like 67% of our income comes in through the state – like 4.5 million. Another 25% comes in through the township boards. In Illinois there is a government smaller than a county but bigger than a municipality. There are eight of these boards that support us for a total of roughly another million. The rest of the funding is through the development department, eight percent or so where our income is roughly six million dollars. 

So in absolute terms, the development department is not that small, but all of the in-kind and individual donations and grants that come in really don’t look like a whole lot in terms of when you plot up a pie chart. What matters is that the state hasn’t increased rates for reimbursement for some of our programs for ten years or so and each year we have to do more with less (The statutory reimbursement rate for some of our workers is below minimum wage because they haven’t kept up).

What this means is that the development department is a key place because that is the place where it determines if our net assets will increase or decrease (because you can’t say “make a profit” in a nonprofit, but you can’t operate in the red consistently).

So you have to both keep nurturing the people who do give both in terms of foundations and in terms of individuals. I think this is where you board is so important. It’s not just the ask that is important, but it is also utilizing their professional networks. I’m sure there are places you can go online and find calls for proposals that you can write a grant for sight unseen and if you are really good you might hook it. The reality is that relationships are so essential that you need to mine those first before you go taking yourself down blind alleys.

Rolling Back the 80/20 Rule

Talk is in the air that the 80/20 rule should truly become or replace the 90/10 rule. I'm not so sure.

I had always read the Pareto Principle as something that was lamentable – you have all these people working, and you get most of your productivity out of a small set of people. If that is how you want to read it, then in a way the greater concentration is even more lamentable.

In terms of fundraising, it might actually be an advantage. One way is to be looking at the potential donors as being a pyramid, with a broad base and a small amount of people who are at the top and can potentially give you a lot of money. In terms of trying to be targeted, it might be better if you can just target those ten percent of people that you know will give you the 90% of your donated funds.

But here’s the catch: those people have to be both identifiable and consistent. One worry is that your organization’s 10% might shift from year to year. Another related issue is that people die without planning ahead for their death and including your agency in the will.

What makes the bottom majority important is that this is where your future twenty or ten percent is coming from. People move up in the world and get better jobs and access to more resources (and connections to people who also have resources).

To just rely on the minority that is giving the majority now is short-sighted. You need to be constantly developing your development pipeline.