Using data from what are referred to in the study as major private research universities, elite small liberal arts colleges, and prominent New York City cultural and health institutions, SSIR calculates that “The percentage of people from finance on the boards virtually doubled at all three types of nonprofits between 1989 and 2014.”
SSIR posits that nonprofits favor Wall Street partly because “nonprofit organizations are simply following the money.” Wall Street has grown increasingly rich in the past decades and fundraising is a vital aspect of running a nonprofit organization. Hedge fund managers’ compensation regularly outstrips other corporate executives, making them prime fundraising targets.
But the banksters are not content to just donate to the nonprofit organizations, financial service industry executives are taking positions of influence and control. As one might expect, the vision Wall Street players have of and for the world often clashes with the preexisting culture within those organizations. The most pronounced conflict, according to SSIR, is the effort to make nonprofits more like businesses:
As financiers come to dominate the boards of leading nonprofits, it is not surprising that their approaches and priorities have made their way, very explicitly and fundamentally, into the governance of the nonprofit sector … Nonprofit leaders regularly hear about these finance practices from board members and donors whose native habitat is the financial services world. Moreover, nonprofit managers have come to accept them as reasonable principles upon which donors base their giving …
Numerous critics have written thoughtfully about the ways in which market-based thinking and approaches applied to the nonprofit sector provide false promise, with the potential to dilute charitable values, undermine long-term mission focus, incentivize small, incremental goals, and threaten shared governance and other forms of participatory problem-solving.