The Disintermediation of Doing Good

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Global NetworkThe headline of an article by a Harvard economist Edward L. Glaser in The New York Times, “Can Businesses Do Well and Do Good?,” had me wondering, “Can they do both? What is the answer?”

Before we get there, I first want to define “disintermediation.” You are reading it right now. When we remove the supply chain and make it a simple, straight line between supplier and customer, it is an example of disintermediation.

I write and publish these words (supplier), and you read them (customer). Ebooks coming directly from the author, online “phone” conversations happening without phone company’s involvement, email sent without the mailperson — almost everything is becoming disintermediated. Replaced by a direct connection between you and, in many cases, the once and former analog thing. From the conference room to the classroom, even places are being replaced.

Back to the question: What is the impact of disintermediation on doing good?

The piece in The New York Times focused on institutions, specifically, corporations. The premise was that doing well in a for-profit institution is about making money, either for the private owners or the more public shareholders. The “doing good” part is about the necessity to conduct business according to legal and ethical business practices. Not more, and not less. As the NYT article put it, “[…] just the minimum profit-maximizing level of ethical behavior.”

Since a corporation is legally viewed as an individual — one made of many other individuals — then doing good depends on the goodwill of the people running the corporation, the heads of the corporation in more ways than one. Doing good is, for the most part, left to the tax-exempt, nonprofit institutions. So we have two classes of institutions both tied together by the tax code. They formed the largest pipe through which flows the money for doing good.

In today’s disintermediated world, I think there is a new option. It is the non-institutional, less formal group of individuals connected by a social network who provide resources for doing good. Lots of people focused upon doing good without any institution defining what “good” means.

The future of doing good no longer depends on whether the money flows through an institutional for-profit or nonprofit pipeline. The connection will be a straight shot from point A to point B, from someone who can give to someone who needs the help. It will be a real collaboration in which people also give ideas and input. As for the institutions, following the money still works, it just means traveling in an entirely new cyber landscape.

Source: “Can Businesses Do Well and Do Good?,” The New York Times, 01/06/09