Philanthropy is at a turning point. Here are 6 ways it could go


(Luca Zanon, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Rhodri Davies, Head of Policy, Charities Aid Foundation

This is a difficult time for philanthropy. Challenges like global climate change are demanding collective action on an unprecedented scale. Technology, meanwhile, is creating new social problems at the same time as providing new tools to address existing ones. Added to this, shifting demographics and social trends are changing our notions of community, society and nationhood beyond recognition.

But it’s not just the ongoing need to remain relevant that poses a challenge: at the same time, the very concept of philanthropy is coming under attack. Critics are questioning whether philanthropy is effective, how it should be viewed in the wider context of global inequality, and whether it can remain legitimate within a democratic society.

For those who continue to believe in the value of philanthropy – the idea that private assets used for public good can be a powerful force to shape society for the better – there is a lot of work to be done. New efforts are required to help philanthropy adapt to changing times, to craft a compelling narrative about its role, and to find models and approaches that can answer the criticisms.

So what needs to be done?

Acknowledging how money is made

The recent controversy surrounding the donations of the Sackler family in light of their role in the opioid crisis has made it clear that how money is given away can no longer be separated from how it is made.

The idea that some donations are “tainted” has been brought to the foreground once more. This is a criticism with a rich history: many of the major industrial philanthropists of the early 20th century, such as John D Rockefeller and Andrew Carnegie, found their giving placed under sharp scrutiny by those who thought their business practices unacceptable. But conversely, there were always those who argued that pragmatism should trump ideological purity, and that it is better to put even the most questionable money to charitable ends. (George Bernard Shaw, for instance, derided the idea of tainted donations as an “individualist fantasy”.)

It seems clear from the Sackler case, however, that there is a growing consensus that ethically dubious funds cannot legitimately be put to philanthropic ends. So a principle of “first do no harm” must apply to wealth creation, before we even think about giving it away.

And it’s not just how money is made that is the problem, either: how it is then used is also a growing issue for philanthropy. High-profile divestment campaigns have already been aimed at universities and arts institutions, and they are undoubtedly a sign of what is to come for the wider world of philanthropy in terms of scrutiny of investment practices.

Embracing structural change

For some high-profile critics such as Anand Giridharadas, author of Winners Take All, it is not specific acts of wealth creation that are the problem, but rather the structural inequality in society that makes it possible for some to gain vast wealth while many languish in poverty. Likewise the Dutch historian Rutger Bregman, in his viral appearance at this year’s World Economic Forum Annual Meeting, criticized philanthropy on the grounds that taxation is the only real mechanism for addressing the fundamental challenges posed by inequality. For these critics, philanthropy is only ever part of the problem rather than part of the solution, and it provides an unhelpful distraction from the real work to be done in driving structural change.

Image: Statista

Many within the nonprofit world would agree that inequality and tax justice are crucially important issues, but would disagree that philanthropy is incapable of addressing them. It may not always be easy, but rather than abandoning philanthropy altogether, there are plenty working to craft approaches to it that can deliver genuine structural reform.

Democratizing philanthropy

A crucial part of making philanthropy capable of addressing inequality is to ensure that it is not seen as merely a tool for the powerful to entrench their advantage. It is thus vital to find ways to give away not only money, but also power. Some are seeking to do this by encouraging big donors to focus on funding organizations that have a broader base of mass support to reduce the risk of their choices introducing a plutocratic bias. Others are developing models of participatory grant-making, in which those who would traditionally be seen as the beneficiaries of philanthropy are given a genuine say over how resources are used.

We are also seeing the rise of new networked models of protest and social change, such as #BlackLivesMatter, #MeToo and the youth climate strikes. These are powerful examples of people and communities taking issues into their own hands using the new capabilities afforded by technology. If donors can find ways of supporting these networked movements that empower them without stifling them, it could help to democratize philanthropy even further.

Reflecting diversity

Genuine shifts of power within philanthropy can only happen if the field reflects the diversity of the societies in which it operates and the people and communities it serves. To this end, some nonprofit organizations are asking themselves difficult questions about whether the balance of gender, ethnicity and background in their staff and boards of trustees is right. Meanwhile, as philanthropy grows around the rest of the world, it is important that it does so in ways that reflect local traditions of giving and support. A burgeoning middle class could be a major new driver of philanthropy: research by the Charities Aid Foundation shows that if the emerging middle class in the global south gave at the same levels as people in the UK, it would result in $345bn per year for charity. However, when the members of this new middle class do engage with giving, we must not assume that they will do so using Western models or approaches.

Innovation and discovery

Stanford philosopher Rob Reich’s recent book Just Giving raises challenging questions about how we balance the freedoms given to philanthropy with the requirements of justice and equality within a democratic society.

One answer may be in the idea of “discovery” – the ability to bring new issues to light and to find new ways of addressing them. At its best, philanthropy can be a powerful driver of discovery. However this may raise difficult questions within the context of a democracy, because the freedom to innovate often requires autonomy and the ability to run counter to the status quo.

This tension is evident in the growing number of donors placing “philanthropic big bets”. High-profile tech entrepreneurs such as Elon Musk and Larry Page are putting a lot of their resources towards the development of space travel, while others like Dustin Moskovitz are focussing on countering the threat of takeover by superhuman artificial intelligence. For some, these represent the best of philanthropy – taking risks and driving innovation in a way that the government cannot. But for others, they represent its worst excesses – self-indulgent crusades by donors whose view on issues is entirely shaped by the industries in which they made their money.

Transparency and openness

A key challenge for philanthropy in the coming years will be ensuring that it is open and transparent. While a degree of anonymity may sometimes be required to protect a donor or recipient, in general we should aspire to openness. Not only is this a crucial part of maintaining legitimacy in the face of questions about where money comes from or the potentially disruptive effect of philanthropy on democratic processes, but it could also help to spur further discovery if data is made accessible and innovation can thus be decentralized.

One challenge for philanthropic transparency may be the trend for major donors (particularly in the US) to shy away from traditional philanthropic structures, and instead to use commercial structures like limited liability companies (LLC). Mark Zuckerberg and Priscilla Chan famously chose this approach for their philanthropy, and John and Laura Arnold recently hit the headlines for shifting from a traditional foundation to an LLC. This brings benefits in terms of flexibility, when it comes to making commercial investments or engaging in political campaigning, but also requires far less transparency on the part of donor – which could undermine efforts to make philanthropy as a whole more open.

Civil Society

What is civil society?

Whether you call it “third sector”, “social sector” or “volunteerland”, civil society includes an array of different causes, groups, unions and NGOs. Their combined aim is to hold governments to account, promoting transparency, lobbying for human rights, mobilizing in times of disaster and encouraging citizen engagement.

Ranging from small online campaigns to giants such as Amnesty International and Greenpeace, civil society employs around 54 million full-time workers and has a global volunteer force of over 350 million.

The World Economic Forum is committed to accelerating the impact of civil society organizations. With a view to this, it created Preparing Civil Society for the Fourth Industrial Revolution, a multi-sectoral platform to support the transformation of the social sector and its inclusion in the governance of emerging technologies.

Civil society is a key stakeholder for driving public-private collaboration and advancing the Forum’s mission. Through dialogue series and platform initiatives, civil society actors from a wide range of fields come together to collaborate with government and business leaders on finding and advocating solutions to global challenges.

Optimism for the future?

There are clearly many challenges facing philanthropy right now. Some require greater engagement with wider technological or societal change, which philanthropy has so far been slow to address. Others, meanwhile, require a degree of introspection: looking at the structures and dynamics within philanthropy to see where problems lie and where it can evolve to become more effective and reflective of the people and communities it serves. None of these are easy, but all are of them are possible. And if philanthropy can step up to the plate in this moment, its role as a positive force to shape our society can hopefully not only be retained, but strengthene

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Why Trump’s tariffs are good news for US garlic farmers

2021-2027 EU Budget: €378,1 billion to benefit all regions

EFSF/ESM boss tells half truths about Troika’s doings

Further reforms will promote a more inclusive and resilient Indonesian economy

This is how Europe is helping companies and workers as the coronavirus crisis deepens

It’s time to strengthen global digital cooperation

Cybersecurity should be a source of hope, not fear. Here are 5 reasons why

One year on: EU-Canada trade agreement delivers positive results

Yemen: ‘Living hell’ for all children, says UNICEF; Angelia Jolie calls for ‘lasting ceasefire’

How to create a trustworthy COVID-19 tracking technology

‘Deteriorating’ human rights in Belarus amounts to ‘wholescale oppression’: UN expert

Business leaders join UN to rev up sustainable development investments

Open-plan offices make workers less collaborative, Harvard study finds

Syria: UN health agency highlights ‘critical health threats’ facing Idlib civilians

Car bomb attack on National Police Academy in Colombia, ‘strongly condemned’ by UN

Educate children in their mother tongue, urges UN rights expert

Can the banking union help Eurozone counter its imminent threats?

Accelerating a more sustainable industrial revolution with digital manufacturing

MWC 2016 LIVE: Under Armour learns from “robust community of data”

Engaging women and girls in science ‘vital’ for Sustainable Development Goals

Trade negotiations with US can start under certain conditions

Instability in Africa’s Sahel, spreading outwards, Security Council told

Guterres holds ‘focused and frank’ informal discussions over future of Cyprus

It’s time for financial services to embrace the Fourth Industrial Revolution. Here’s why

5 droughts that changed human history

Rohingya cannot become ‘forgotten victims,’ says UN chief urging world to step up support

This is what Belgium’s traffic-choked capital is doing about emissions

Countries urged to make ‘digital world’ safer for children

Polio eradication a UN priority, says Guterres in Pakistan visit

6 ways the COVID-19 pandemic could change our approach to human capital

Venezuela: European Parliament calls for additional sanctions

This one small change could transform education for millions

Security Council resolution endorses moves towards long-sought Afghanistan peace

The ITU Telecom World on 14-17 November in Bangkok, Thailand

Why do US presidential elections last so long? And 4 other things you need to know

Solidarity Corps: more opportunities for young people

Is sub-Saharan Africa ready for the electric vehicle revolution?

38th ACP-EU Assembly: dialogue on cooperation challenges in Kigali

The first-ever climate telethon has raised $2.6 million for new forests

5 charts that explain big challenges facing Italy’s new government

Migration crisis update: The “Habsburg Empire” comes back to life while EU loses control

Global Trade Identity can be the cornerstone of paperless trade

Consumer protection: Commission welcomes political agreement by Council on the Representative Actions Directive

A skills gap is jeopardizing efforts to end energy poverty

Why European manufacturing SMEs in the South face fatal dangers

The costs of corruption: values, economic development under assault, trillions lost, says Guterres

Why responsible consumption is everyone’s business

Berlin repels proposal for cheaper euro

More women than ever are working in Hollywood, but men still dominate key roles

Parliament boosts consumer rights online and offline

Eurozone: Statistics don’t tell the whole story

From a refugee camp to Davos: one Co-Chair’s story

We need better alignment between climate and trade. Here’s a roadmap

Brussels to tear down the trade wall with Mexico as opposed to Trump’s “walls”

The Japanese have a word to help them be less wasteful – ‘mottainai’

Migration crisis update: lack of solidarity not only among EU leaders but also EU officials

Chinese “BeiDou” GPS goes to market

It’s time to ditch our obsession with trade deficits. Here’s why

An open letter from business to world leaders: “Be ambitious, and together we can address climate change”

Joint U.S.-EU Statement following President Juncker’s visit to the White House

More Stings?


Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s