“The Gathering of the Glum” Has It Wrong on Economic Recovery

Newsweek Senior Editor Daniel Gross dug into his fried chicken and mashed potatoes like a man facing a rapidly approaching deadline. His plenary session presentation at the Council on Foundations 2010 fall conference was only minutes away.

Steve Gunderson briefed him on the audience with practiced ease. Mr. Gross nodded like a quarterback getting sideline instructions. He had given this talk before, but this was his first time addressing leaders of the nonprofit sector. His audiences usually are Fortune 500 companies eager for an outsider’s perspective.

I leaned across the table and mentioned an emerging trend I am seeing in Charleston, South Carolina: the rise of entrepreneurial donors. He brushed the comment aside with a friendly nod and a “you’ll see.” He made his way to the podium.

Mr. Gross quickly got to the point of his presentation. The “gathering of the glum,” (meaning the economic punditocracy) has gotten the economic recovery all wrong. We are making more progress, faster, in our economic recovery than most acknowledge. We are becoming more efficient and faster than ever before, squeezing a remarkable six percent increase in efficiency out of our economy in the past 12 months.

Why do so many get it wrong? Economic forecasting is based on looking backward and projecting forward. The tools economists use are all based on the recent past as a starting point. There is something like “muscle memory” in economic forecasts. If you are used to cringing, then you cringe. This causes economists to miss the inflection points—the moments when the markets turn. Mr. Gross has seen the economies of the world turn by looking at the recent successes of several U.S. companies, but in particular Apple and Google.

Our greatest companies create platforms that become new economic ecosystems. Apple, Google, Boeing, GM (even in bankruptcy), and others are creating new economic ecosystems on which the fastest growing new business sectors around the world are based. The entrepreneurs behind these companies are U.S.-based, yet their ideas drive the global economy. We are the platform for global growth and the world is taking us along with them…not leaving us behind.

After Mr. Gross ended his talk and the applause died down I thought, community foundations are a platform for the nonprofit ecosystem. Do we encourage donor innovation using our platform? Do we engage the entrepreneurial donors in our communities? To fail to do so is to be left behind in the recovery of the nonprofit sector.

George Stevens is president and CEO of the Coastal Community Foundation of South Carolina