“This Is Not Charity”

How Bill Clinton, Ira Magaziner, and a team of management consultants are creating new markets, reinventing philanthropy—and trying to save the world
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Young African AIDS patient
A YOUNG AIDS PATIENT is treated at an orphanage in Kenya. Among its other activities, the Clinton Foundation negotiates with pharmaceutical companies to bring down the prices of generic HIV/AIDS drugs in the developing world.

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Slideshow: "The Clinton Effect"

The former president describes his philanthropic journey

In His Own Words Click here to read excerpts from Jonathan Rauch's interview with Bill Clinton

He is a business consultant, seemingly typical of the breed. Height and build average, hair a graying brown, age 51. His name is Stephen Crolius, and he has worked for 21 years as a strategist at a series of high-priced consultancies. There is not a boardroom in the country where he would look or feel out of place. His suit and tie are sharp and pressed, but he looks tired, and with reason: He and a handful of colleagues have effectively launched a new business in just six months. His travel itinerary has been killing, and when I ask about his work habits, he says, “On any given day I get up and I start to work, and I work all day until I’m able to feel like nothing bad will happen if I stop working. If possible, I try to go a bit beyond that. I eat dinner, I go to sleep, I get up the next morning, and I do the same thing again.”

At a press conference tomorrow, his boss will announce the first fruit of these labors, a business deal involving five banks, four industrial companies, and cities on several continents. It is mid-May, and Crolius and I are sitting over drinks (nonalcoholic) in the lobby of a Manhattan hotel. A colleague of his, Jamie Russell, approaches. He is younger, British, with glossy brown hair and a model-fresh, collegian face. He has the precocious self-assurance of a man who, at 32, has already obtained a bachelor’s degree from Harvard and an M.B.A. from Stanford, worked for McKinsey & Co. in London, New York, and Silicon Valley, and was among the first employees of a London-based investment bank that specializes in carbon trading. When I ask him to explain the deal he just helped put together, Russell produces a pencil and draws a cost graph. Perhaps catching my quizzical look—I have never even taken a business course—he says, “It’s a piece of McKinsey analysis, really.” This does not help me all that much.

The lobby is a forest of pinstripe suits and smart skirts. Crolius and Russell and several dozen colleagues have gathered from around the world for the next day’s announcement. The hotel has become their impromptu headquarters. Conducting a meeting from a nearby armchair is a tall, elegant man of 61, who has broken the pinstripe dress code by wearing a sports jacket. This is Göran Carstedt, of Gothenburg, Sweden. He can safely be numbered among Europe’s most accomplished executives: In the 1980s he headed Volvo’s operations in France and Sweden, and in the 1990s he built Ikea’s fledgling U.S. business into a blockbuster success before going on to head IKEA in Europe. Clustered in a corner are younger staffers newly hired to oversee operations in five cities. Anyone not engaged in conversation is hunched over a BlackBerry. Some are engaged in conversation and hunched over a BlackBerry.

The scene could be mistaken for a convocation at any cutting-edge business consultancy or investment-banking house or money-management firm. But all of these people are working for a fraction of what they could be earning. Crolius took a pay cut “north of 50 percent.” Carstedt draws a “minor” salary that “somewhat” covers his expenses.

And their business plan is not to trade derivatives, or launch a hedge fund, or consult on outsourcing, but to stop global warming.

And the chairman of their firm is Bill Clinton, who, somewhat to his own surprise, aims to repurpose business methods and business culture to solve the world’s problems—and who hopes to reinvent philanthropy while he is at it.

It was in the spirit of an experimenter, rather than a visionary, that Clinton established a foundation. What would become the Clinton Foundation’s signature initiative, an HIV/AIDS program, began fortuitously.

The story is one he enjoys telling, and tells often. I heard it in April, in his office in Harlem. The room is long and narrow, decorated in warm beiges, its walls and shelves lined with pictures and mementos. A portrait of Winston Churchill glowers from behind the former president’s desk, which Clinton left unused during our interview. Instead he gestured me to a sofa, sank into an armchair, and slung his left leg over one of its arms. He began the interview in this laid-back mode but gradually grew animated, sitting erect, leaning forward, punctuating with his hands.

Getting in to see him was not difficult: He said he was “thrilled” that I wanted to write about his foundation’s work. “I’m just so glad you’re taking this seriously,” he told me. “What I long to do is to see this integrated into every philanthropic activity from now on, where it’s appropriate.” I met with him on the day Boris Yeltsin’s death hit the news, a busy day, but as our interview stretched on past the hour mark, he showed no sign of taking the hint from aides who stood, paced, glared at wristwatches, and finally resorted to whispering into his ear. “Go ahead,” he told me. “Keep goin’. I’m too wordy about this. I care a lot about it.”

The story he tells is that in July 2002, when the foundation had only 12 employees (it now has hundreds working on HIV/AIDS alone), he and Nelson Mandela went to an AIDS conference in Spain, where the prime minister of Saint Kitts and Nevis, a small Caribbean country, said to him, “You know, we don’t have a denial problem, we don’t have a stigma problem. We have a money and an organizational problem.” The foundation began its AIDS efforts that year in the Bahamas, and immediately discovered that the government there was paying $3,600 a year per person for generic drugs whose list price was about $500. It turned out that middlemen were taking steep markups, which the foundation eliminated by making a deal with the manufacturer. “It got me to thinking about how once more we had a public-goods market that was not only underfinanced; it was disorganized,” Clinton says.

Clinton can and certainly does raise money, but he didn’t have enough to endow a major grant-making foundation. What he did have was an ex- presidential bully pulpit, a deep Rolodex, the power to attract attention and talent, and an inkling that those assets might be used to do for public goods something like what entrepreneurs and investment bankers do in the corporate world: midwife new markets or scale up underdeveloped ones. The idea is to 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. “What we tried to do,” Clinton says, “was to get them to go from what I call a ‘jewelry-store model’ to a ‘grocery-store model’—from a high-profit, low-volume, uncertain-payment business to a low-margin, high-volume, certain- payment business.”

None of that was clear in the summer of 2002, when Clinton made the decision that may do more than anything to shape his postpresidential legacy. To launch his HIV initiative, he turned not to a philanthropist or public-health doctor or development professional. “It was a system thing,” he says. “It’s the absence of effective systems that I believe is the primary factor holding a lot of these countries back. We wanted people who could operate efficiently in the nonprofit field in the same way they had in business.” So he called a business consultant named Ira Magaziner.

"Ira,” as everyone calls him, is a man with a past. He has been Clinton’s friend since they were at Oxford together, on Rhodes scholarships, in the late 1960s. Magaziner has had a two-track career as business consultant and social reformer, with more success at the former than at the latter. As a boy, he led a strike at his summer camp, and as a student at Brown University, he led a major curriculum reform. In the early 1970s, he organized a group of recent college graduates to live in the wilting postindustrial town of Brockton, Massachusetts, and work for social change—an idiosyncratic effort he later called naive. No less naively, in 1984 he led a state-appointed study commission that cooked up a 1,000-page industrial policy for Rhode Island. The voters rejected it by 4-to-1.

In 1993, he repeated the Rhode Island mistake, this time on a heroic scale. The Clintons tapped him to manage their health-care reform. Again he produced an ambitious, complicated plan, this time running to 1,342 pages; again it bombed politically. Magaziner’s gift is his ability to see entire systems whole, from their smallest details to their global architecture. That made him a successful business consultant, but it did him little good on Capitol Hill, where any plan with more than two or three moving parts is too complicated. Magaziner was a parallel processor, an efficiency expert whose plans depended on simultaneous changes on multiple fronts and levels. He was ill-suited to Washington, where progress is serial and incremental.

Stung, he worked for a while on Internet issues for the Clinton administration and then went back to consulting, which was what he was doing when Clinton called in 2002. Having by then replenished his bank account, he kept one business client and otherwise donated himself to the Clinton Foundation. He takes no salary, saying he wants to instill a volunteer ethic.

I first met Magaziner in 1992, when he was working on the incoming Clinton administration’s transition team. His laser-like intensity and his command of detail were unmistakable then, and no less so when I reconnected with him for this article, in February. Now 59, he retains a quiet, composed demeanor and a rapid-fire manner of speaking, but what was once an unruly shock of gray curls is now a straight corporate cut. He rarely laughs or raises his voice. The words that people use again and again in connection with him are brilliant and driven. He thrives on impossible deadlines, and his stamina for travel beggars belief: He all but lives in hotels and airplanes, proselytizing, making contacts, initiating negotiations, closing deals. Staff members say they get e-mails from him at midnight and 5 a.m. Asked if his pace is sustainable, he replies, “I still feel 18. I have a feeling if I stop it will all catch up.”

Where exactly Clinton’s role in the foundation ends and Magaziner’s begins is not altogether clear, perhaps not even to them. Sometimes, to an outsider, they seem to share a brain. Clinton, clearly more than a figurehead, is chairman, guiding spirit, and the big gun strategically deployed for publicity and persuasion. “Without him as anchor and persona,” Magaziner says, “we’d be pounding sand.” Magaziner is effectively chief executive, strategist, recruiter, and senior negotiator, operating with what appears to be freewheeling authority. “We’ve worked together long enough so he trusts me,” Magaziner says of Clinton.

The sensibility Magaziner brought to the AIDS assignment was that of a business strategist who had helped big companies—General Electric, Black & Decker, Corning—cut costs by consolidating orders, automating communications, and working with suppliers to find efficiencies. With Clinton’s cachet and idealism as a lure, Magaziner set about hiring people in his own image. He wanted people who knew how to put together a business plan, who understood how companies work, and who could talk to line executives in their own language.

Starting with a staff of five, the foundation began visiting drug manufacturers. “I saw that the drugs, even the generic versions, were very high-priced,” Magaziner says, “and I knew that the inherent cost structure couldn’t be that high. I surmised that what was happening is that there were only 70,000 people being treated in the developing world. I surmised the manufacturers weren’t able to get scale economies in production. I began to see that we could aggregate enough demand to form what businesses call a buyers’ club.”

So 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. 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. Although the foundation asked for aggressive “forward pricing” to kick-start demand, it pointedly did not ask for donations or charity. “To be sustainable,” says Magaziner, “this can’t be a charitable act.” Rather, the foundation was offering a business proposition: If we get you the demand, can you get us the supply?

Brand-name pharmaceutical companies refused to play, but generic manufacturers in India and South Africa were interested. The foundation sent staff members to study the companies’ cost structures and to act, in effect, as free consultants, helping find the efficiencies that higher volumes could afford. Then the foundation repeated the process back through the supply chain, with producers of raw materials and other inputs. The approach was pure McKinsey: novel in its application, but routine in its methods, as Clinton himself is the first to point out. “This is not Einstein,” he says. “We didn’t develop the theory of relativity here. All we did was take something that people would naturally do in a purely business context and apply it to the public-goods market.”

In October 2003, at a news conference in Harlem, Clinton announced price cuts for a number of drugs, notably a reduction of more than 50 percent in the price of a leading three-drug AIDS cocktail. It was the first in a series of foundation-sponsored AIDS-drug price cuts that continue to this day; 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.

How much did the foundation reduce drug prices? How many lives were saved? We can never precisely know. AIDS experts I spoke with at the World Bank, the World Health Organization, and Médecins Sans Frontières all pointed out that the foundation was flying with a tailwind. The rise of generic-drug companies, the pressure brought by activists and patients’-rights groups, and billions of new aid dollars were already pushing the HIV-drug market toward higher volumes and lower costs. On the other hand, the experts agreed that the foundation brought prices down faster than they would otherwise have fallen, and that more people got treatment as a result. “It changed the way business was being done,” one World Bank official told me.

Within the foundation, a source of some annoyance is that the outside world supposes Clinton to have picked up the phone and jawboned prices down. The real work has been done by hyperkinetic staffers who have negotiated dozens of deals and ground out thousands of pages of cost analysis. Clinton takes particular pride in the fact that the companies that collaborated in cutting prices did not sacrifice profits. “I haven’t asked anybody to give us anything,” he said in our interview. “All we did was ask the drug manufacturers to adopt a different business strategy. Once we got smooth distribution, quick, certain payment, and really high volumes, they were still making money. They just made it in a different way.” To him, profit is necessary and entirely legitimate, a point he makes to anyone who will listen—for example, at the May press conference in New York, where he declared, “I think it’s wrong to ask anyone to lose money.”

Clinton and Magaziner believed they had stumbled onto something bigger than an AIDS program. “I mean, if you apply this thread of thinking, you’d be thinking about it all the time,” Clinton told me. “The longer I’ve done this, the more I’ve become convinced that the AIDS drugs were just the tip of the iceberg—that basically there are a huge number of what I call public-goods markets that are disorganized, where the consumer knowledge is imperfect, to say the least, and parenthetically they’re almost all underfunded. But if they were better organized and there was more demand for the service or product they were providing, the funding would be there. This is something we can do!”

To establish itself as a paradigm instead of just a program, the market-making model needed a second act, preferably bigger than the first and in a completely unrelated field. In late 2005, Clinton and Magaziner hit upon global warming.

Clinton says he has been concerned about climate change for years, but that a hostile Congress and cheap oil prevented him from doing much about it when he was in office. Out of office, one day he decided to replace every lightbulb in his house with a compact fluorescent. But when he went to his local hardware store in Chappaqua, New York, he couldn’t find bulbs in a lot of the shapes and sizes he needed. “So I literally picked up the phone and called Jeff Immelt”—the CEO of General Electric—“and I said, ‘I’m trying to be a good customer. I’m trying to buy American, support GE. I like your eco-initiatives. But I can’t fill half these sockets. What am I going to do?’ And he said, ‘Well, make me a bigger market, and I’ll make whatever bulbs you want.’”

It’s a charming story, if somewhat tarnished by the fact that, through a spokesman, Immelt said he had no recollection of the conversation. In any event, a lightbulb had lit up in the ex-president’s head. “It struck me that we were in the same sort of deal,” he says, “where we have very low knowledge of the economic options among consumers, drastic undercapitalization, and a completely disorganized market.” In December 2005, Magaziner proposed a global-warming project, and Clinton gave the OK. In January 2006, Magaziner put five researchers to work figuring out what to do.

What to do wasn’t clear, and might not have become so but for a stroke of luck. In October 2005, 18 of the world’s largest cities—prodded by the deputy mayor of London, a firecracker of a woman by the name of Nicky Gavron—had held a summit where they resolved to do something about global warming. Cities are said to account for 75 percent of energy use and greenhouse-gas emissions, and so if the largest cities reduced their carbon footprint, that could make a real difference. (No one seems to know where the 75 percent figure comes from, but everyone seems to accept it.) Among the cities’ resolutions was to create “municipal procurement alliances”—buyers’ clubs—to “accelerate the uptake of climate-friendly technologies and measurably influence the marketplace.” Those brave words spoken, the cities called for a second summit within 18 months and commenced not doing much, until, early last year, Magaziner got wind of their project.

That April, Magaziner went to see Gavron. “We’ve got this track record, and we can assemble talent very quickly,” she remembers him telling her. When she asked for the foundation’s financial support, he parried with a bigger idea. “He said, on the spot, ‘We don’t want to back you; we want to be your partner.’” The foundation would become, in effect, the cities’ operational arm. In August of last year, Clinton, standing with the mayors of London, Los Angeles, and San Francisco, announced the Clinton Climate Initiative. The same day, five foundation staffers hit the road, traveling to participating cities around the world—almost 40 were soon on board—to introduce the project.

The climate initiative, in typical Magaziner style, has many moving parts, including technical assistance to cities, networks for sharing best practices, software to measure progress, financial support, and a full-time foundation staff member assigned to each city. But the make-or-break component is a plan to re-equilibrate the market for energy conservation. “What we’re doing is jump-starting— accelerating—market forces,” Magaziner told me.

Cities own public buildings: offices, schools, police stations, hospitals, fire stations. They set codes for private buildings. They buy and run fleets of vehicles: buses, garbage trucks, police cars, ambulances. They handle water and waste. No city by itself can make a deep dent in carbon emissions or reorganize a global market, but together cities can pool their demand for leading-edge conservation technologies, such as LEDs for traffic lights, systems that capture and burn garbage dumps’ waste methane (a potent greenhouse gas), and alternative-fuel engines for city vehicles. Predictable demand would let suppliers scale up their operations, bringing prices down and creating footholds for technologies on the cusp of commercialization.

That would be step one. Step two, in Magaziner’s vision, is to channel a Niagara of private capital into the effort. Energy-saving technologies typically cost more up front but less over time. “So what we’re going to be doing is setting up a financing mechanism,” he told me. The foundation would help cities borrow in the securities markets against future energy savings. “The whole thing is bankable,” Magaziner said. “It’s a commercial proposition. This is not charity. The whole concept of this is that the market itself over some period of time is going to deploy all these energy-saving things. The problem is it will happen slowly and gradually.” The foundation hopes to reduce decades to years, and years to months.

Magaziner hired Stephen Crolius, the business consultant, and Jamie Russell, the London financier, and Göran Carstedt, the Swedish executive, and other top-level staff. They brought in more business talent at a rapid clip. In early January, the climate initiative had 28 people; by March, about 40. Later this fall, it will have 100 or more, according to Sara Greenbaum, Magaziner’s 23-year-old chief of staff. “We’re like a start-up company moving as quickly as possible to get an effective structure in place,” she told me.

Greenbaum has moved pretty quickly herself. She was trailing Magaziner when I met with him in February, and I mistook her for the sort of factotum that 23-year-olds usually are. It turned out that Magaziner met her in the fall of 2005, when she was a senior at Tufts University and he was giving a guest lecture in her class on the Clinton presidency. Impressed, he recruited her on the spot. Days out of school, she became the climate initiative’s first employee. Like a Silicon Valley start-up, the Clinton Foundation disdains job titles, ageism, and small thinking; if you can do the job—or, for that matter, invent the job—it’s yours. This is not your father’s philanthropy.

The climate initiative had to race the calendar. In mid-May, the group of cities was to hold its second climate summit, in New York. Magaziner was determined to have at least one deal ready for Clinton to announce there. Foundation people fanned out to meet with hybrid-engine makers, lightbulb manufacturers, green-building contractors, waste- and water-treatment companies, bankers, and more.

To understand better what these foundation people do, I spent some time with Nisha Thirumurthy. She is 30, with a cheerful, round face, dark hair parted in the middle, and a vivacious, unpretentious manner. Born in Chennai, India, she moved to the United States at age 11. After college, she wanted to do international development work, but internships with nonprofits left her disappointed. “I felt I was doing the work, and I just never knew what happened with it,” she told me. “If you really want to make a difference on a large scale, you have to get the private sector involved.”

In January, Crolius brought Thirumurthy, by then an energy consultant, into the climate initiative, to focus on the market for alternative-fuel vehicles. Her first account was UTC Power, a Connecticut-based company that makes, among other things, fuel cells for cars and buses. Fuel cells run on hydrogen instead of petroleum and emit only water as waste. Depending on how the hydrogen to power them is produced, they have a promising future as a green alternative to the internal-combustion engine.

But that future, touted for decades, keeps receding. There is no market for fuel-cell vehicles because they are expensive; they are expensive because there is no market for them. “It’s the chicken-and-the-egg thing,” UTC Power’s Michael Brown told me recently. “You’re sort of lost in this loop, and you’ve got to figure some way to break it.” Since 2005, the company has sold only six fuel-cell-powered buses, each made by hand, each priced at more than $2 million. When I asked Brown if UTC Power was making any money on these boutique buses, he replied, “Not enough to make us happy. Frankly, nobody’s making money on fuel-cell buses.” That could change if larger, regular orders began coming in. If it made 100 or so buses a year, UTC Power could deliver them at competitive prices, Brown said.

Thirumurthy and several colleagues visited company plants and brought back reams of cost data. She used it exactly as a private consultant might: to work out, component by component, where higher volumes could most effectively reduce costs. By early June, UTC Power and the Clinton Foundation had a deal: If the foundation could round up the orders, the company could cut costs and pass through the savings. In August, Magaziner said he expected cities to order enough buses—something in the hundreds—to reduce prices by half or more.

Would a few hundred fuel-cell buses matter, if cities bought them? Maybe only a little, but maybe quite a bit. If prices came down, order books might fatten, bringing prices down further, attracting new investment and still more orders, and perhaps speeding the adoption of fuel-cell technology in the broader market. And if not? Magaziner had other irons in the fire. He intended to push ahead on multiple fronts, creating a stream of “products” and letting the market decide the rest.

Another product, for example, involved buildings, not buses. Buildings are among the most profligate energy-wasters out there. For a fee, energy-service companies will upgrade your building to plug energy leaks, promising to deliver a specified level of conservation and to reimburse you for any underperformance; you can take this guarantee of future energy savings to the bank and borrow against it to finance the upgrade. The business model is elegant; but the market for these building retrofits, as they are called, remains small, only a few billion dollars a year. Low volumes keep costs high: another version of the fuel-cell problem.

The foundation made retrofits a target last year and brought in Milton Bevington to work on them. In his mid-50s, with a 30-year business career and training as an HVAC engineer, Bevington was an empty-nester who was casting about for a new direction and was willing to take a steep pay cut. He found energy-service companies that were eager to participate. Meanwhile, the foundation negotiated with bankers and canvassed cities.

At the cities’ climate summit in May, Clinton, flanked by the mayors of New York and London and a herd of bank and energy-service-company executives, announced the result: Cities would put together bundles of buildings to retrofit; the banks would make available $5 billion in loans, to be paid back from future energy savings. The $5 billion, the companies say, will more than double the size of their retrofit market at a stroke. More important, as Clay Nesler, of Johnson Controls (an energy-service company), told me, working with a predictable stream of demand instead of doing scattered jobs “is a new way of doing business,” one that promises new economies of scale, although how much prices will come down remains to be seen.

Clinton and Magaziner intended the May announcement merely as an opening shot. The campaign, if it succeeds, will go on for years, the script improvised as opportunities crop up. “I want to start with the low-hanging fruit,” Clinton told me. “I have no idea where this is going, but it’s utterly fascinating to see if it can be done.”

The modern era’s predominant model for philanthropy, the grant-making foundation, is a century old. When the Rockefeller Foundation created the template, Woodrow Wilson was a new president and World War I was still a year away. Since then, the world has changed more than foundations have. In recent years, new generations have come to see the traditional approach as hidebound. “Everyone’s searching for new models and new ways of doing things,” Peter Frumkin, the author of the recent book Strategic Giving: The Art and Science of Philanthropy, told me. “There is an urge for something other than the standard model of the grant-making foundation that dutifully delivers funds to nonprofit organizations that dutifully deliver the services.”

From the archives:

"The Barefoot Bank With Cheek" (December 1995)
The Grameen Bank, in Bangladesh, which makes small loans to some of the poorest people on earth, has become a model for economic developers all over the world. By David Bornstein

Among the most promising of the newer models is something that has come to be known as “social entrepreneurship.” As the label implies, it uses entrepreneurial methods and market mechanisms to solve social problems. The paradigm is Grameen Bank, which developed a commercial market for small, zero-collateral loans to poor people in Bangladesh and now profitably lends to more than 7 million borrowers (97 percent of them women).

Although microfinance proved a triumph, the social-entrepreneurship movement has been hard-pressed to come up with a second act. Venture philanthropists have created nonprofit companies to make cheap reading glasses, hearing aids, and mosquito nets for the poor. In 2000, a nonprofit pharmaceutical company called the Institute for OneWorld Health was established to develop and market drugs for the poor. But those and many other such efforts remain small in scale. Much of the literature on social entrepreneurship is still devoted to figuring out just what social entrepreneurship is.

It is at this transitional moment that the Clinton Foundation has appeared on the philanthropic scene. The new breed of philanthropic and social entrepreneurs want to see measurable results, and soon; they embrace business and businesslike methods; they want projects to be sustainable and scalable, capable of living and growing on their own. All of that describes the Clinton- Magaziner ethic to a tee. “That’s amazing,” Greg Dees, of Duke University’s Center for the Advancement of Social Entrepreneurship, told me when I detailed Clinton’s global-warming plans. “They’re trying to start entire markets in one fell swoop. It sounds like what they’re doing takes this concept to a whole new level.”

Clinton hopes so. As audacious as the foundation’s plans for global warming are, its philanthropic aspirations are broader. “This is the kind of thing that I believe will be a critical component of all philanthropic activity for the foreseeable future,” Clinton says. “I believe that in the years ahead, the organization and expansion of public-goods markets will become one of the most important areas of philanthropy, and will be an area where philanthropy sometimes blurs into strict private enterprise.”

Perhaps. But to be more than a collection of one-offs, the Clinton Foundation will need to develop a method that can be applied to all kinds of problems—and by organizations that do not happen to be headed by former presidents. On the first count, Clinton has few doubts: “I think there are unlimited numbers of applications of this, where you try to organize markets for public goods and services, where you’re advancing the public interest maybe entirely through private-sector activity.” The foundation is currently using business methods to streamline fertilizer markets in Africa, and it plans to work on bringing down prices of desalination equipment. With the Gates Foundation, it is working on applying its methods to the market for malaria drugs, which is very different from the market for HIV drugs. Asked about future ventures, Clinton mused that solar roofs, Internet-downloaded textbooks, and bulk-purchased building supplies could bring new economies of scale to Third World education.

Knowing how well the model would work without the unique qualities of Clinton and Magaziner and their peculiar mind-meld is harder. No one doubts that elements of the Clinton strategy can be picked up by other nonprofits. Whether the whole package will be portable appears more open to doubt. It seems unlikely that anyone but a Clintonesque political celebrity could have persuaded disparate, disorganized AIDS-drug makers and governments to join hands. Clinton himself believes that other people and organizations will be able to carry the method forward once it is proven. (Although, he adds, “I don’t know that anybody else could have started doing it, just because of the unique circumstances under which the first AIDS project arose.”) He may or may not be right.

My own guess is that, however successful and replicable the Clinton strategy turns out to be, one legacy—perhaps its most important—is already assured. The foundation has employed hundreds of people and will employ hundreds more: a cadre steeped in the ethic of entrepreneurial philanthropy. Many, like Nisha Thirumurthy and Sara Greenbaum and Jamie Russell, have decades-long careers ahead of them in business, nonprofits, academia, perhaps government; all will carry with them the idea that business and philanthropy can form a seamless whole. They could seed a generation of social reformers for whom the traditional conflict between public good and private profit will seem a dusty archaism. If so, history may remember Clinton as a philanthropist who happened to have been president.

Jonathan Rauch is an Atlantic correspondent and a guest scholar at the Brookings Institution.
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Jonathan Rauch is a contributing editor of The Atlantic and National Journal and a senior fellow at the Brookings Institution.

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