In 2007, I experienced one of those fork-in-the-road moments that seem to occur when you least expect them. It was another day at the office, sifting through e-mails in the Ford Foundation’s glass palace in Manhattan, where I worked as one of the organization’s six directors. As usual, half of my inbox was filled by advertisements for books, conferences, and consultants promising to solve society’s problems by bringing the magic of the market to nonprofits and philanthropy—the masters of the universe, it seemed, also wanted to be saviors of the world—and the other half was filled by complaints from those experiencing the negative consequences of doing exactly that. Among the latter were nonprofit organizations that couldn’t get support ...

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