Source: Fortune.com
Summary
Bill Ackman, founder and CEO of Pershing Square Capital Management, believes that capitalism can have a stronger societal impact than philanthropy. He argues that nonprofits lack the equity incentives and market pressure that keep enterprises sharp, and can be “taken over” and turned into “political vehicles.” Ackman is redesigning his philanthropic efforts to focus on gaps in the capital markets, and has launched a new venture, the Brain Research Rehabilitation Institute, which combines nonprofit and for-profit principles.
Our Reading
The numbers tell one story.
Ackman’s argument that capitalism beats philanthropy is not a new one, but his approach to redesigning philanthropy is. He’s launching a hybrid model that combines nonprofit and for-profit principles, with the goal of creating sustainable solutions. The Brain Research Rehabilitation Institute is a test case for this approach, with a focus on neuroscience and a structure that mirrors the compensation structure of Pershing Square. Ackman’s emphasis on market discipline and equity incentives reflects his skepticism about the efficiency of nonprofits.
The announcement sounds familiar.
Ackman’s case for capitalism is not without its critics, who argue that treating corporate success as a public good lets the ultrawealthy claim credit for social contributions without accounting for market dynamics. The tension between Ackman’s argument and his own philanthropic efforts is clear: he’s launching a nonprofit building, but designing it to prove that capitalism wins even through a nonprofit structure.
