Thursday, October 14, 2004

Social Capital and Controlled Membership
(Please click on Permalink/ Full Post to read the whole thing.)

Some of my friends know that I'm mildly obsessed with the ideas of Harvard's Robert Putnam, as espoused in Bowling Alone and Better Together. There's something almost surreally magical about civil society and the nonprofit sector--people actually get together to do something that isn't necessarily for money or government. Putnam trumpets the fundamental and undersung need for civil society, warns us about its decline, and promotes a revival. One of the points he makes is that controlled membership clubs--the Lions, Elks and Rotary Clubs, the Masonic brothers, and the like--have had decreasing rolls for decades now. My instinct is to see these insitutions as emblematic of Old Boys Networking: secretive, nepotistic, usually racist. They seem to exist only to exclude newcomers from power, and to keep members loyal to a status quo. Putnam acknowledges this aspect, but notes that if they continue to decline, the service projects they do will falter unless better organizations spring up to replace them. Open membership organizations (think your local PBS station or the Sierra Club) really use membership as a means of fundraising, and are actually run by boards and the like. A "member" has few obvious opportunities to contribute action instead of cash. Even in open membership organizations where the members actually do stuff, there are few mechanisms to keep members active--a couple of people will spearhead an effort, and then it will fall apart if they leave. A transparently meritocratic version of the controlled membership clubs, with built-in protections against cliquishness, seems like the ideal solution. There has to also be a selfish incentive to stay in the club. The old Masonic type clubs used secrecy, peer pressure, and magic flutes to keep members on their toes. Barring those kinds of coercive and old-fashioned tactics, creating a unique opportunity for business and social networking (i.e., meeting potential customers and dates) seems like it might work.

At least, that's what I think is the idea behind The Full Circle Fund. I stumbled upon it while working on a completely unrelated project, and I was intrigued by the fact that I probably won't be eligible for membership anytime soon. Why would you be so open about your exclusivity? You see my guess above. By limiting themselves to " young entrepreneurial leaders" they stick to a single group that can be judged fairly objectively (Have you started a business? Is it running? Enough to give you disposable cash?) But by inviting their "clients" (people from the non-profit sector, not expected to donate cash) to their meetings, they can preserve some sense of transparency and fair play. I have no idea if this actually works, but it might, and people might want to think about it. So if you're really starting up a small business (and not a timber company tax shelter), or if you're in the non profit sector, you might want to check them out.