Elite-Driven Philanthropy

Book: Anand Giridharadas , Winner Takes All

The Gates Foundation recently funded a project to distribute home testing kits for the coronavirus and committed over $100 million to the global response. Jeff Bezos committed $10 billion earlier this year to addressing climate change through a new ‘Bezos Earth Fund’ to fund scientists, activists, and nongovernmental organizations, in what Bezos writes is ‘the biggest threat to our planet’. In 2010, Bill Gates and Warren Buffett founded The Giving Pledge, a commitment by the world’s wealthiest individuals to donate at least half of their net worth to philanthropic causes during their lifetime. Over 200 have signed the pledge. These efforts by our world’s richest are indeed commendable. But it raises the bigger question of what we as a society expect elite-driven philanthropy to be, and its relation to the government — which by nature is meant to serve the community’s interests and motivations.

Progress of Philanthropy

Philanthropy through the world’s wealthiest has certainly produced an incredible amount of good work in the world. One of the Gates Foundation’s focus is around the eradication of malaria. They’ve contributed more than US $2.9 billion in grants focused on diagnosis, treatment, and prevention that ‘helped reduce malaria cases by more than 40 percent and reduce deaths by more than 60 percent worldwide’. The foundation also gives and partners with countless of other organizations to advance opportunities in healthcare, education, and poverty. The Chan Zuckerberg initiative has, among other longer term goals to accelerate science and education, donated directly to nonprofits including $75 million to the SF General Hospital for medical equipment. The Michael & Susan Dell foundation have committed over $1.7 billion to urban education and college success — translating to 3 million low-income student opportunities, 500k supported classrooms, and career and job opportunities to hundreds of thousands of students every year.

The Rise of Philanthrocapitalism

Despite these positive global and domestic changes, the past few decades in the US have seen the highest inequality rates, wage stagnation, a declining middle class, and civil and political unrest. Giridharadas’ book, Winner Takes All, explores this disconnect and questions the real contribution of elite-driven philanthropy. He terms these elites ‘Market Worlders’: wealthy business people, politicians, and consultants who look to ‘change the world while also profiting from the status quo’. Market Worlders look at addressing social change in a win-win mentality. One in which they don’t have to compromise their social contributions with making money and living comfortably. The Market Worlder also subscribes to the idea of philanthrocapitalism — a way of doing philanthropy, which mirrors the way that business is done in the for-profit world. Justin Rosenstein, co-founder of Asana, discussed the idea of an ideal business that ‘has both revenue and positive externalities [created in the world]’.

Philanthrocapitalism has extended to what’s become the very fabric of businesses. Corporations market themselves to prospect employees as a ‘springboard for future change agents but also laboratories for present-day ones’. Job seekers don’t have to choose between working at a Fortune 500 or a nonprofit, because the very same for-profit companies also seek to change the world, improve lives, and make an impact through their work. To some degree, this works because Americans as a whole are much more skeptical of the role of the public sector and the size of government. We’re often told about the efficiencies of the free market and innovations that come about through the private sector. “I feel much more comfortable with our ability…to allocate those funds than I do giving them to the government”, says Michael Dell.

Muddled Waters

The crux of Giridharadas’ book argues that the Market World, win-win mentality, in social change does not work. The role of government to addressing social problems gets ‘reduced to being a single actor among actors, one inadequate to modern problems…they had to be solved through partnerships among rich donors, NGOs, and the public sector’. The problem with this is precisely the reliance on rich donors and private foundations. For starters, it raises a question of who should hold the power of where money is best allocated. Sure, if one billionaire makes this decision you can argue that it’s most efficient, but it’s not equitable — this individual would be able to exert a level of influence over public interest. The role of the government, is precisely to balance the collective action of the people. Giridharadas takes this one step further. Not only is the power dynamic here unfair, but the interests of those rich donors are in direct conflict with the systemic problems of that social issue!

Despite the social progress that has been made, Giridharadas claims that when elites have this level of influence on social change, ‘they are able to reshape what social change is…to present it as something that should never threaten winners’. They can make sure their interests and very much their own businesses that have given rise to their wealth is not endangered — ‘watered down theories of change that are personal, individual, depoliticized, respectful of the status quo and system, and not in the least bit disruptive’. An example of a social issue would be wealth inequality — the structural change is economic redistribution through the tax systems, but a Market Worlder would talk about innovation and entrepreneurship through providing technologies for individuals to easily contribute to charity.

The Market Worlder look to disrupt, without true disruption. The Market Worlder has been successful in nurturing the win-win mentality and philanthrocapitalism, promoting ‘the idea that social change should be pursued principally through the free market and voluntary action, not public life and the law and the reform of the systems that people share in common’. The essence and appetite for that mentality has given birth to thought leadership and TED talks, in which a level of criticism is expected, but scaled to just the right amount; ‘The thought leader, when he or she strips politics from the issue, makes it about actionable tweaks rather than structural change, removing the perpetrators from the story’. And the very market for TED talk speakers reinforces that structure and the content of messages that are acceptable.

Giridharadas argues that you can’t have deep change without any losers. It’s an ideology that is vastly overestimated by Market Worlders in which their interests align with those of the poor. His example of Carnegie welcoming the economic systems that generate inequality in the name of business competition, yet still being a philanthropist, showcase that Market Worlders refuse to accept this; ‘By rejecting the idea that the powerful might have to sacrifice for the common good, it clings to a set of social arrangements that allow it to monopolize progress and then give symbolic scraps to the forsaken — many of whom wouldn’t need the scraps if the society were working right’.

Julian Worricker and The Real Story podcast hosted four experts to discuss philanthropy on an episode ‘Does Philanthropy Work?’. Danny Sriskandarajah, Chief Executive at Oxfam GB, a leading charity in the UK fighting global poverty, states that “there’s a structural challenge that we have to face…which is the distribution of resources and wealth”, in which the generosity of the elite does not address that bigger picture. In Giridharadas’ view, even the generosity and charitable givings today are ‘a substitute for and a means of avoiding the necessity of a more just and equitable system and a fairer distribution of power’.

The Alternative

Underlying all this, there’s still doubt as to whether philanthropy has made a dent in social change. Linsey McGoey, a Professor of Sociology, says on the podcast that “we’ve seen great progress when it comes to under-five child death, but whether that can be attributed to private philanthropy is very doubtful…[the amount] pales in comparison to overseas aid flows from OEDC countries”. Even if there is truth to its contributions to social change, the question is if there is a better way. Dutch historian Rutger Bregman comments on the annual Davos conference that brings together world leaders to discuss global, political, business agendas; “ people talking the language of participation and justice and equality and transparency, but no one raises the real issue of tax avoidance and the issue of the rich not paying their fair share. I feel like I’m at a firefighting conference and no one is allowed to speak about water”.

The experts on The Real Story podcast call attention that the blame is not on an individual or a billionaire. It’s a system of imbalance in which one end of the spectrum is the social and economic progress that can be achieved through collective measures with the growing necessity that the rich have a role in solving society problems. Without an obligation for those elites to give, it creates a power dynamic that is inherently unequal, ‘the giver and the taker, the helper and the helped’. We need to look at the structural problem of wealth distribution, tax policy, and its subversion with philanthropy. ‘When a society helps people through its shared democratic institutions, it does so on behalf of all, and in a context of equality’.

What Elite-Driven Philanthropy Can Be

The experts on the podcast acknowledges that there are, however, valid ways and purposes in which philanthropy can play a role. This can look like encouraging public projects to happen, bringing marginalized groups into the mainstream, and identifying where the nudge and capital can make real change. Ways in which the elite can leverage their power and influence to move the needle on changing structural issues. Vox also commented on Bezos’ climate change contribution, and asked experts on the best way for Bezos to actually fight climate change. Tamara O’Laughlin, a director at 350.org, talked about taxation and holding fossil fuel executives accountable. Some look towards developing the conditions for climate change to thrive— through education, leadership, and creating a movement. And that’s precisely where the biggest bang for the buck is — alongside and influencing public opinion towards collective and government action.

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Product Management | UC Berkeley ’16 Economics & Public Policy | Personal @ https://medium.com/@richielife

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Richard Hu

Richard Hu

Product Management | UC Berkeley ’16 Economics & Public Policy | Personal @ https://medium.com/@richielife

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