by GEORGE JOSEPH
Warren Buffett (left), Melinda and Bill Gates PHOTO/Humanosphere
“Philanthrocapitalists” can’t resolve the problems created by capitalism.
In America today, big time philanthropists are often lauded for helping to even the playing field for those less fortunate. Every week, millionaires flock from TED conferences to “idea festivals” sharing viral new presentations on how to solve the world’s biggest problems (give village children computers, think positive thoughts etc.). But this acceptance of the philanthropic order was not always the case. In the era of Carnegie and Rockefeller, for instance, many distrusted these philanthropic barons, arguing they had no right to horde would-be tax dollars for their own pet causes, especially since these “donations” came from the toil of the workers beneath them.
In her new book No Such Thing As A Free Gift: The Gates Foundation and the Price of Philanthropy Linsey McGoey reasserts this challenge to the legitimacy of philanthropy in today’s new era of philanthropic superstars. McGoey’s book investigates the Gates Foundation’s interventions in US K-12 education and global health, raising serious concerns about the extent to which the massive philanthropic sector depletes funding for traditional social services and prioritizes the agendas of unelected foundation leaders.
As institutions like the Gates Foundation take increasingly leading roles in policymaking and governance, McGoey argues, the line between traditional notions of charity and top-down consolidation of power becomes unclear; and with this largely unchecked influence, philanthro-capitalists, like Bill Gates, have pushed countries across the world to accept market based solutions for crises like education inequity and disease proliferation—despite evidence that these problems are often rooted in actions taken by those philanthro-capitalists themselves.
No Such Thing As A Free Gift asks, what is the place of such philanthropy in a democratic society? The answer seems to be “none at all.”
You start the book by putting the rise of today’s “philanthrocapitalists,” like Bill Gates, into historical context. Could you explain what philanthrocapitalism is and what is actually new about it? How do the Bill Gateses of today compare to the Carnegies and Rockefellers of old?
The term philanthrocapitalism was coined by Matthew Bishop, an editor at the Economist and expanded in a 2008 book co-written with Michael Green. They define the term in two key ways: First, they argue that philanthropy is becoming more business-like and results-oriented, with donors increasingly applying the profit motive to giving practices.
Secondly, they suggest that capitalism is a ”naturally” philanthropic practice, and therefore grants should be aimed at helping the private sector to solve social problems. Bill Gates has never called himself a philanthrocapitaist, but people like Bishop and Green see him as an exemplar of the trend.
What’s not new about the ”new” philanthropy is the emphasis on cost-effectiveness and strategic giving. Champions of philanthrocapitalism exhibit quite astounding historical amnesia when it comes to the history of large foundations such as Carnegie and Rockefeller, which were modelled on the corporate structures of their founders’ businesses. Results-oriented, strategic philanthropy is a modern phenomenon, but it can be dated to the turn of the 20th-century and the late Gilded Age, not to the start of the 21st century.
There was a recent hullabaloo about Mark Zuckerberg’s public announcement that he was going to “give away” 99% of his Facebook shares to charity—which turned out to actually mean a LLC under his control and exempt from non-profit rules against political expenditures and profit-making. Do you think Zuckerberg genuinely understands this as charity? And if so, is this profit-oriented “giving” a major new trend in the philanthropic sector?
Through setting up an LLC, Zuckerberg has skirted any requirements to publicly list any grants made to either for-profits or non-profits. His giving can take place in total secrecy: we’ll know only about the grants that he wishes to disclose. When an entity such as the Gates Foundation offers grants to for-profit corporations, it needs to legally exercise “expenditure responsibility,” which means that it needs to take measures to ensure that the grant is used for charitable ends, rather than private profiteering. There are no such restrictions on Zuckerberg’s LLC.
Zuckerberg can legally offer the bulk of his “philanthropy” to any for-profit recipients he wants and still receive public acclaim for “gifting” his fortune. We’re seeing the rise of a new, horizontal philanthropy—the rich giving directly to the rich—at a level that’s completely unprecedented.
I think the entire meaning of “corporate philanthropy” is shifting. It once meant corporations surrendering a portion of their revenues to non-profits. Now the meaning is reversed: corporate philanthropy means getting charity to for-profits that position themselves, however disingenuously, as deserving charity claimants.
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