September 20, 2007 | Read Time: 2 minutes
Bill Clinton “aims to repurpose business methods and business culture to solve the world’s problems” and “reinvent philanthropy,” writes Jonathan Rauch in a profile of the foundation’s work in The Atlantic Monthly (October).
Mr. Clinton uses his “ex-presidential bully pulpit” and “power to attract attention and talent” in creating campaigns that “identify markets that aren’t supplying enough socially beneficial goods or services to meet the potential demand, and then to lead them to a new equilibrium,” says Mr. Rauch.
This process began in 2002, when Mr. Clinton tapped Ira Magaziner, a business consultant and longtime friend, to lead a project to increase the flow of costly AIDS drugs to the developing world.
“The foundation went to governments in Africa and the Caribbean and organized demand for AIDS drugs, obtaining intentions to place large orders if prices could be cut,” Mr. Rauch says. “It simultaneously went to drug companies, offering them a much larger and less-volatile market for AIDS drugs in return for lower prices based on the projected higher volume.”
The approach brought a series of cuts in the cost of drugs, and Mr. Rauch reports that “750,000 people in 66 countries now get HIV medications through the foundation’s purchasing consortium, and, perhaps more important, overall market prices have followed the consortium’s prices down.”
“All we did was take something that people would naturally do in a purely business context and apply it to the public-goods market,” says Mr. Clinton in the article.
The foundation is now applying this approach to help curb global warming.
Mr. Rauch suggests that the Clinton Foundation could be developing a new philanthropic paradigm, stating, “The modern era’s predominant model for philanthropy, the grant-making foundation, is a century old.”
The article is available for a fee on The Atlantic’s Web site.
