Is Wall Street taking over charity? A new study published in the Stanford Social Innovation Review argues that it may be. According to Garry W. Jenkins from Ohio State University, the number of non-profit board members who came there from the finance sector has doubled since 1989, and they occupy an even larger percentage of leadership positions on those boards. This equates to 44% of board positions and 56% of leadership positions at liberal arts colleges and New York based non-profits.
While wealthy people have often been involved in charity work and have usually dominated that field, this increase is specifically people from finance, which has had an impact on how charity organizations are being run. This has brought a lot of newer ideas into non-profit work, such as executive style leadership, data-driven decisions (read: financial data), and even competition.
Some of this has been beneficial. Some charities are undoubtedly doing better, raising more money and doing more good with that money. It’s not perfect, though. Jenkins fears that the increase in such finance-inspired charity work can have a negative impact, too. For one, it can result in the sacrifice of short-term goals and projects in the face of long-term missions. Perhaps more dangerous is the concern that too much focus on these methods can give the impression that issues like poverty can be solved simply by applying quarterly targets or metrics to fundraising.
Another concern is one of diversity. To put it simply, Wall Street is not the most diverse place. By recruiting so much from the finance sector, the boards and leadership positions of charities take on a decidedly white, male, and wealthy image. Diversity is key to keeping charity work forward thinking, as it means a variety of viewpoints are being applied to problems. If Wall Street doing its thing hasn’t managed, for example, to solve poverty in America, uncritically applying those same ideas to charity likely won’t do so, either.