May 19, 2024

The Fourth Sector


Mode Shift’s faithful readers know how interested the author is in work that is occurring in metropolitan regions, at the grassroots, in nimble businesses, and the non-proft sector to help institutions be more responsive to the unique requirements of our time. The 20th century’s institutions, particularly government, which built the Interstate highway system, sent men to the moon, enacted enforceable protections for civil rights and endangered species, have turned out to be wholly incapable of meeting today’s needs. That’s due, in large part, because change  occurs so fast.

The most significant new strategy that I’ve reported on to respond to this need is “convening organizations,”  which have formed serendipitously here in Michigan and all over the United States. Convening organizations are generally a volunteer confederation of untraditional allies — greens and farmers and church leaders and executives and governments  and non-profits and philanthropists — who find the time to regularly gather, talk through their differences, and form a comfort zone from which they can collaborate to solve big problems. The intent is to persuade each other and a community’s other major institutions to revise their strategies about how to do such things as provide more neighborly housing, develop alternatives for moving people and goods, clear the air of global climate change gases, develop more sustainable sources of financing for local schools.

Here in Traverse City, a convening organization spent well over two years deciding how to replace a proposed highway bypass with a process for a regional plan to change sprawling patterns of development and produce a new community design that could help people drive less.

Late last month, former President Bill Clinton held his three-day Clinton Global Initiative in New York, which attracts world leaders from government, business, non-governmental organizations, philanthropists, and academics. Thought it’s just three years old the Initiative is one of the largest and most influential convening organizations in the world because it has figured out a way to harness the vitality and promise of capitalism in a way that produces real outcomes for solving global climate change, poverty, AIDS in Africa, and how to educate the world’s poorest children.

I crossed paths this week with several of the West Coast’s leading philanthropic program officers, active participants in stretching the boundaries of business, government, and the foundation community, who said all of this is coming to fall under a new umbrella term called the “fourth sector.”  Last May, the New York Times published one of the first good articles on the subject, describing the fourth sector as “composed of organizations driven by both social purpose and financial promise that fall somewhere between traditional companies and charities. The term “fourth sector” derives from the fact that participants are creating hybrid organizations distinct from those operating in the government, business and nonprofit sectors. But because the types of participants vary widely and much of the activity is nascent, no single name for what is occurring has gained broad use.”

Carl Frankel, a journalist, wrote a smart piece for Green@work  that described the fourth sector this way: “In all three major sectors—business, government and the social sector—people are trying to goad, tweak and otherwise persuade institutions to revise their strategies and aspirations. It’s rough going, but progress is occurring. The boundaries of business are stretching as concepts like “sustainable business,” “socially responsible business,” and “cause-related marketing” let in fresh air. Similarly for governments, which are trying to get less bureaucratic and more effective, and for the social sector, too, where innovations such as venture philanthropy and economic sustainability are emerging.”

Those working to establish a more cohesive definition and work scope for the fourth sector also built a rudimentary Web site, 

All of this is more evidence of the speed of the transition we all are involved with, the inability of too many institutions to keep pace, and the work so many of us are doing to develop more responsive forums for making decisions and managing our lives. 

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