The lede of Georgia Levenson Keohane’s review of Ken Stern’s With Charity For All in the March-April issue of the Washington Monthly got my attention as a college sports fan:

In 2006 the oil tycoon T. Boone Pickens gave $165 million to his alma mater, Oklahoma State University, to build a new football stadium, marking one of the largest charitable gifts on record to an American university and the most gargantuan to an athletics program. Pickens directed that the money be spent on a new west end for the Boone Pickens Stadium, for fields and practice facilities, and for a residential village and dining buffets for OSU athletes.

Less than an hour after Pickens’s donation landed in the bank account of Cowboy Golf, one of the athletic department’s fund-raising arms, the money was rerouted to BP Capital Management, Pickens’s hedge fund, where it was soon matched by an additional $37 million in unrelated donations that the university had agreed to invest as a condition of Pickens’s largess. With the funds now illiquid, OSU took on debt to construct the stadium—a strategy, notes author Ken Stern in With Charity for All, that is not unusual for a nonprofit organization, which can “leverage” its tax-exempt status to borrow at lower rates and invest existing assets in matching but higher-yield, taxable securities. The resulting arbitrage, in theory, produces a lower-risk cash flow for the organization, particularly when the matching funds are allocated in a relatively conservative way. OSU’s investment with Pickens, in an oil and gas fund betting on changes in commodity prices, initially spiked in value to $300 million. Then, in the 2008 crash, BP Capital Management lost more than $1 billion—and with it most of the OSU donations, Pickens’s and otherwise.

That’s actually only half the story, because Pickens also talked his alma mater into a peculiar alumni life insurance policy scheme that has also gone bust. He seems to have held OSU harmless for its losses, so he’s still a hero in Stillwater. But it does illustrate the often unorthodox methods and questionable fruits of big charitable operations, which is the subject of Stern’s book.

You should read the whole thing, but the review emphasizes the growing realization in the charitable sector that its efficiency can be measured neither by the amount of money raised and spent nor by mechanical adaptations of methods common in the for-profit sector. A new breed of “social entrepreneurs,” some of whom are highlighted by Stern, are developing new measurements of “social impact.” And of particular interest to Monthly readers, these measurements are also taking hold in the public sector’s grantmaking operations:

Perhaps the most interesting and underreported manifestation of the social entrepreneurship movement’s sway is in the public sector, where, as Stern describes, there is a new penchant for evidence-based grant making and use of tools like innovation funds that allow government agencies to work with intermediaries like New Profit to channel public dollars to high-performing nonprofits. These kinds of partnerships indeed offer a better way to give, and a better use of all resources, public and private, to advance the common good.

At a time when “public-private partnerships” have developed an unsavory reputation, that’s good news indeed.

Ed Kilgore

Ed Kilgore is a political columnist for New York and managing editor at the Democratic Strategist website. He was a contributing writer at the Washington Monthly from January 2012 until November 2015, and was the principal contributor to the Political Animal blog.