Page 241 - The Drucker Lectures

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center anymore. The center is our institutions that are trying to
have results.
That we even speak of three sectors is a very recent phenom-
enon.
The most brilliant economics writer of the 1950s, John Ken-
neth Galbraith, wrote a book in 1958 [The Affluent Society] in
which he recognized only two sectors: government and business.
It didn’t occur to Galbraith, who is a Harvard professor, that Har-
vard is neither government nor business. But it’s a pretty big or-
ganization. That never occurred to him. And I can tell you that
because when we met shortly after the book was published—he’s a
very old friend, from World War II days—I kind of said jokingly:
“There are actually three big organizations in the U.S., and the
most powerful one is Harvard.” He said it never occurred to him.
And nobody pointed it out. That’s not even 50 years ago.
Now, what we call the nonprofit sector has no clear bottom
line. So the first question today in a nonprofit organization is:
“How do we define results? What is our purpose?”
Bill Gates, who has all that money, hasn’t the foggiest notion
of what to do with it, and so to him the purpose of philanthropy is
to give away money fast, on a very simple calculation. He’d rather
waste it than have Uncle Sam get it. That’s perfectly rational. The
alternative to his giving it away is for Uncle Sam to take it. And
he is a rational human being, and probably feels that his giving
it away at random has a better chance of producing results than
Uncle Sam has. Uncle Sam’s results are not terribly impressive.
Today, you want your nonprofit efforts to have results. I think
the first of the modern health-care foundations—don’t hold me
to it—was the American Heart Association. But it really came
into its own after World War II. And it has had fabulous results.
The reason is focus. The Heart Association had a bitter inter-
nal fight to extend its work to the whole cardiovascular system.
Some people said, “You’d better look at arteries and veins, at the