Does philanthropy work?

Highlights

• 2024-01-17 09:03 On the surface, the generosity of people like Bill and Melinda Gates or Warren Buffett is unarguable. They’re committed, along with others, to give the majority of their wealth to charitable causes, either during their lifetimes or in their wills.

• 2024-01-17 12:25 Danny Sriskandaraja is here, the chief executive of Oxfam

• 2024-01-17 12:25 Rodri Davies is with us, head of policy at the charity’s Aid Foundation

• 2024-01-17 09:07 Lindsay McGoy is here, professor of sociology at the University of Essex and author of no such thing as a free gift, the Gates foundation, and the price of philanthropy.

• 2024-01-17 12:25 Melissa Berman joins us from New York, founding president and CEO of the Rockefeller Philanthropy Advisors, Inc. That’s a nonprofit philanthropy service launched by the Rockefeller family to help donors create thoughtful, effective philanthropy throughout the world.

• 2024-01-17 09:08 But whether philanthropy has made any dent in reducing inequality over the past 30 years, despite the vast rise in the amount of foundations who are engaged in giving, is not the case.

• 2024-01-17 12:30 I certainly take Lindsay’s point that when it comes to thinking about inequality as the prime problem that philanthropy is attempting to address, that is something of a challenge, because arguably, philanthropy is reflective of the existing systems and structures within which wealth is created.

• 2024-01-17 12:31 And we’ve got into a sort of infrastructure, if you will, a system that now feels sort of too imbalanced in terms of its fairness and in terms of the expectation that we have that these very rich people will solve society’s problems. So however generous a group of very wealthy people chooses to be, it doesn’t redress that bigger picture, you would argue. Exactly. I think there’s a structural challenge that we have to face up to, which is the distribution of resources, of wealth, if you will, across humanity.

• 2024-01-17 12:31 So if you look back to, for example, the early 20th century, when John D. Rockefeller and some other philanthropists essentially started what we now think of as the public health sector, the amount of good that has come out of public health around the world is truly phenomenal. And you do see progress spurred by philanthropy in things like the drop in maternal and early childhood mortality around the world. It is not where it should be.

• 2024-01-17 12:31 But on the other hand, I think that philanthropy can clearly be shown to be making a difference in the fields in which it’s possible for it to use the small lever that it has. Okay, well, we’ll talk more about the decision making process and also who ultimately decides where best the money should go a little bit later on. Let’s give you a flavour now of the current state of play in terms of philanthropic giving. I’ve been talking to Dennis Chum, who is the wealth reporter for Forbes. Our reporting shows that philanthropic giving has absolutely increased in the past decade. Part of that is the Giving pledge, which was launched by Warren Buffett and Bill and Melinda Gates in 2010. So there are right now 204 high net worth individuals. That includes a lot of billionaires who say they’ll donate more than half of their wealth away during their lifetime or after they die. That said, that doesn’t mean that they have done that.

• 2024-01-17 12:32 And I think one thing to point out here is that there’s also more of an incentive to give in the United States due to tax laws. That said, there are a lot of major philanthropists living outside of the United States, those who signed the giving pledge and those who haven’t really, who are giving a lot of money. There’s billionaire Azim Premji in India, and we estimate that he’s given away $21billion.CarlosSlimisanotheronewh{o}^{\prime }sbeengivingalotofmoneyaway.LiKashinginHongKong,h{e}^{\prime }sgivenawaymorethan$3 billion in his lifetime. So there are definitely some major players outside of the United States. But as far as our reporting goes, we see a lot more major donations within the United States than abroad. And on the giving pledge that you’ve referred to, this is an international document that people have signed and said, we will do this in our lifetime.

• 2024-01-17 12:32 Yes, there’s absolutely no enforcement mechanism for the giving pledge. I think it’s been a wonderful piece of public relations for the world super rich, and not really a mechanism which has actually led to observable effects for the better on the ground. But among those who sign it and mean it, that’s a lot of money, potentially. Potentially. And I think we have to look at absolute versus relative figures, because as your last guest did say, when you look at absolute figures, philanthropic.

• 2024-01-17 12:33 I agree absolutely that the major short term benefits that we’re seeing come from the public sector, because clearly the public sector has way more resource, as well as the mechanisms to make it happen. That is a separate question from whether philanthropy is a valid way for wealth to be distributed. I do believe that tax policy is extremely important. Tax invasion is a crime, and it should be prosecuted to the full extent of the law wherever possible, whether we have the right kind of minimum wages around the world, property rights are extremely important, and all of that lies with the public sector, not the private sector.

• 2024-01-17 19:10 So how did he get into the business of giving? I wouldn’t call myself really a particularly generous person, but I thought I would try setting up my own business, and that was very, very successful. Brought me lots and lots of money, which I never expected. So really that was how it came about, I suppose, to be completely honest. Perhaps I felt a bit guilty about having that amount of money, and I thought, well, I had better do something good with it. Right, so that’s the decision making point.

• 2024-01-17 19:10 Well, I didn’t have any control at all, but I didn’t want any control. But yes, you are definitely right now I do want control. And I didn’t start giving to charity in any significant way till 2018. That was my first big gift, which was for a project in Burkina Faso. And yes, I was looking for control there because it was quite a lot of money. Tell us about the project and what you were looking to achieve.

• 2024-01-17 19:10 Melissa Berman a thought on that before we move on, because you’re clearly dealing with some very wealthy, influential people who, yes, put forward a plan to spend a lot of money on, as they see it, doing good. But they still want to make sure that they’ve got some control over it, don’t they? They do. Although I think for truly committed philanthropists, it is not so much that they want control as they want to have a sense that they’re going to have an impact. So if you can show them clearly a path toward impact, then the issue of control becomes secondary. And for them to be able to recognize and literally see for themselves that there are huge reservoirs of knowledge and insight among the people who are most affected, and that you can have a kind of grant making and philanthropy that is more participatory and that is more inclusive of the people who are most affected by the issue where you’re trying to move the needle.

• 2024-01-17 12:54 So the cutting edge of philanthropy, I think, is really interesting, and it’s always been. The antislavery movement was inspired by some philanthropists.

• 2024-01-17 19:11 The ending child marriage would have been impossible were it not for the foresight of some key philanthropists. So I think that edge we need to celebrate. But that’s about nudging to a degree, isn’t it? That’s about saying to people, if you do this, then you’ll get rewarded for it, or your name will appear in lights in some shape or form. Not always, because I think some philanthropists are very happy playing a role behind the scenes.

• 2024-01-17 12:56 But I think at times, certain political economic infrastructures that have been implemented over the past 40 years have made it far easier to engage in what was once called sort of illegitimate earning by classical liberal thinkers, including people like Adam Smith, who thought that you shouldn’t have what is called unfair gains from things like absentee landlordship, where essentially you can invest early on in a product or in the ownership of an asset and continue to yield profits despite any effort on your part.

• 2024-01-17 19:12 There’s been some really good books written lately that look at what is called self serving donor advocacy. So if you look, for example, at the position of right leaning philanthropists that has been seen to give very generously to university economics programs, for example, that advocate for a very minimal tax state, for example, that have advocated for low taxes on high earners, these laws themselves have come as a result of lobbying efforts that have been enhanced as a result of disproportionate wealth gains for the very rich.

• 2024-01-17 19:12 Melissa Berman, are you in the camp that says more wealthy people ought to give more? I think that once you say ought and put in a requirement, then you’re talking about tax. And if we want, as a society, in various jurisdictions, to increase the tax level that wealthy people pay or change the rules and regulations about how profit is generated, I think that’s an objective that jurisdictions should certainly follow if that’s what their voting public wishes for.

• 2024-01-17 16:35 I think often it isn’t the government, because government exhortation on issues of philanthropy is not necessarily helpful and maybe actively counterproductive.

• 2024-01-17 19:13 Historically, religious leaders and teachers would have taken up that mantle. I think the interesting thing is whether philanthropists themselves see part of their role as driving other philanthropists to give more. And again, with a sort of long view, this is a role many of them have always seen for themselves. So there’s a long history of Tudor merchants, for instance, in their wills basically berating other Tudor merchants for not leaving enough to charity. Andrew Carnegie’s gospel of wealth was largely about berating other philanthropists at the time for not giving as generously as he did.

• 2024-01-17 19:13 That’ll have someone’s name and have parties with people wearing fancy clothes. But no one raises money from philanthropists to build a sewage treatment center or build schools in poor neighborhoods or things like that. There are things that we need the government, which is really the people. So we need the people deciding that we need certain things. So taxes, particularly taxes for those earning a lot of money, is a better way.

• 2024-01-17 19:13 And your organization is called specifically patriotic millionaires? Yes. So what constitutes a patriotic millionaire in your mind? Well, what we’re trying to do is deliberately have a provocative name saying that we are the actual patriots. We are the ones who want society to work for everybody. We are the ones who want everybody to participate in society. And that is what patriotism actually is, is wanting to have an inclusive society, not wanting to have a society with a few rich people and lots of poor people. That does not work, and frankly, does not even work very well for the rich people. Maurice Pearl, chairman of patriotic millionaires.

• 2024-01-17 19:14 I mean, I was in Yemen a few months ago where a country facing one of the world’s worst humanitarian cris. And through the support of some of our key philanthropic partners, Oxfam has built water systems in places where large numbers of displaced people have put pressure on water that had been trucked in. And what’s interesting there, the loop that I think is really critical here that needs to be closed, is those interventions.

• 2024-01-17 19:14 But the current economic model, and this is one to all four of you, really allows people to become exceptionally rich billionaires. Times x number. Is anybody saying there needs to be a level above which you cannot go? People are starting to talk about that. And a mantra that’s arising in the states is this expression, every billionaire is a policy failure. And I think that expression needs to be carefully listened to, because they’re not saying that the billionaires are the failures. And I think that’s important not to attribute individual blame to any one person, but they are saying it is a policy failure. So the ability of people to become that wealthy, especially at a time of stagnating or regressive wage growth in most regions of the wealthy world, and at a time of vastly increasing inequality in most developing regions, we have to actually have that debate, which I think, Julian, you’re right to say we can’t necessarily hash out the problems of capitalism in this program, but not in the next five minutes. But that is the debate that needs to be had. You place a ceiling, you push everybody below that ceiling, and everybody who is a long way away from that ceiling will not get anywhere near it anymore.

• 2024-01-17 16:49 I still think, though, that there would be an important role for private philanthropy, if only to hold the public sector accountable, to ensure that marginalized people are getting access to these services, and to also help spur some of the kind of innovation that might help the increased resources get to where they need to be more effective.

• 2024-01-17 19:15 I mean, casting the net geographically more broadly, you look at countries like China, like India, where wealth is growing, certainly for some at a huge speed. Will that change the picture? Melissa Berman do you think from the one that we’ve been discussing thus far. Philanthropy is really beginning to take hold in China. Over the last 20 years, the chinese government has permitted the development of private foundations for the first time. And a great deal of charitable giving in China happens on a very informal, person to person basis through social media. And many of the major chinese business tycoons like Jack Ma and Ponymaw have become extremely generous and are funding schools in rural communities and are also looking at dealing with some of the climate change and environmental degradation issues that China as a country is facing.

• 2024-01-17 16:53 I hope historians look upon this period of human history as a sort of blip where there were vulgar levels of accumulation, but that was redressed not through social formment and war and discontent, but by the sort of evolution of new systems of taxation, of redistribution, so that we can collectivise our response to some of these challenges and not just rely on the sort of voluntary generosity of the ultra rich.