Stanford GSB says change the world. But who pays for it?
Who will pay for it?
This question is all too common in startup classes at Stanford’s Graduate School of Business. As an MBA student here, I’ve seen some incredible business ideas. Reimagining how time in prison can prepare folks to lead fulfilling lives. Connecting homeowners in financial distress to resources that help them keep their mortgages. Crafting a performance management tool that removes identity bias from meritocracy. Each would be great for society.
But each founder must answer the question: who will pay for it?
Stanford helps us answer this question for startups. But what about leaders who want to change systems directly? If Stanford is serious about us changing the world, it should teach about financing social movements.
Social movements differ from social ventures because they require broad public support. One organization may play a central role in rallying the public but each movement requires strangers to act in concert. They apply collective pressure to change the system.
Those in power, if threatened, may try to suffocate the movement. They cut off resources and bet the public can’t outlast the financial pressure from the system. As one media executive put it during the Hollywood writers strike in July 2023, “The endgame is to allow things to drag on until union members start losing their apartments and losing their houses.”
This is why financing social movements is so important. Under capitalism, “cash is king.” It is the proverbial carrot and stick. Want to encourage a behavior? Offer tax credits, performance bonuses or cash rewards. Want to prevent a behavior? Charge fines, add taxes or raise prices. All of this maintains the status quo. Social movements need to insulate participants from this financial pressure so they can keep fighting for change.
The 1960s Civil Rights movement. The 2010s #MeToo movement. The movement against apartheid in South Africa. The same sex marriage movement in the US. Each brought important societal changes and required an immense amount of resources to succeed.
So… who paid for it? How? Why?
None of us have learned how to secure the resources to finance a social movement. This is a miss by the GSB. Imagine a class with three focuses: mechanics, history and application.
Mechanics | How does it work?
First, students would learn the mechanics of social movements and their financing. How do they work? Where can funding come from? What tradeoffs come with each funding source (e.g. movement capture)?
Private foundations, high-net-worth individuals, for-profit corporations, government programs and individual donors can all provide funds but each source comes with operational, legal and strategic considerations. Whom you take money from can send stakeholders messages about your values and objectives. Different funders may also require commitments or compromises that shift your mission.
What are common uses of funds and distribution models? Some funds are transferred directly to nonprofits, others are sent directly to individual leaders to buy resources, fund legal battles or post bail. With the advent of social media, more funds are deployed online to spread the word and garner public support.
History | How did they do it?
Next, students would cover detailed case studies on major social movements. We’re familiar with stories of bold leadership and collective action, but the story of who paid for it is just as important.
Take the US Civil Rights Movement of the 1960s. It was financed mostly by individual contributions, while large foundations funded many of the landmark national initiatives we remember today.
Individual support sometimes went beyond small donations. Well-connected individuals brokered the support of their contacts at key moments. For example: Harry Belafonte convinced the Rockefellers, through Chase Bank, to spend $100,000 bailing out protesters in Birmingham. Within 24 hours, Dr. Clarence Jones was on a plane with a briefcase full of cash. In social movements, brokers can change tides by connecting resources to recipients at the right moments.
Others played an active role as fundraisers. Mollie Moon, for example, hosted parties at the Waldorf Astoria in New York City to fundraise. Her friendship with Winthrop Rockefeller led to a summer party supporting the National Urban League. They raised funds for the movement and broke the color line at Manhattan’s prestigious yet formerly segregated Rainbow Room. Younger generations viewed Moon as an old guard activist who had abandoned her radical ideals to work within the system. Telling Mollie Moon’s story helps shift the narrative of Black activism to include the lesser-known elements of glamour and opulence that were integral to funding the Civil Rights Movement.
In social movements, brokers can change tides by connecting resources to recipients at the right moments.
Institutional funders also played a key role, writing big checks to advance national projects. The NAACP’s famed Legal Defense Fund is a prime example. It was created through a years-long relationship with The American Fund for Public Service to achieve the NAACP’s goals through litigation. Years later, the Field Foundation contributed consistently to the LDF, including a special $15k grant and $50k personal contribution from its founder to support the Brown v. Board case. Between 1961 and 1964, The Taconic Foundation gave $75k to support its work. At the same time, New World Foundation funded their litigation and internship program, which helped train the next generation of civil rights attorneys. These institutional funders helped achieve landmark rulings in cases like Smith v. Allwright, Shelley v. Kraemer, Brown v. Board, and Griggs v. Duke Power.
Application | How would you do it?
To end the course, students would apply their learnings to a social cause of their choice. What systemic change do they desire? How could they secure the necessary resources? What strategies might they employ to allocate resources efficiently and effectively? Students would demonstrate their ability to develop a funding plan for something other than a startup or investment fund.
With this three-part course, the GSB, whose slogan urges us to change the world, can become the first business school to teach about financing social movements that do just that.
Editor: Kha-ai Nguyen-Wilk
