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Why Philanthropy Hurts Rather Than Helps Some of the World's Worst Problems | The Progressive
"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.”

Q: 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?

A: 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.

Q: 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?

A: 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.

Q: Though American wealth inequality is at its greatest since the Great Depression, today's philanthropic titans receive much less skepticism from the public than they did in years past. Both Rockefeller and Gates were entangled in some of the most high-profile anti-trust cases in U.S. history. Yet while Bill Gates tops some of today's most admired celebrity surveys, Rockefeller faced so much hostility that he was forced to register his charity in New York State instead of at the federal level. What accounts for the huge shift in the public's mind?

A; Something that separates today’s donors from famous benefactors of the past is that the bloodiest, most fatal effects of wealth extraction have been largely outsourced to developing regions, where brutal labor battles occur regularly but are less visible and therefore less salient for consumers in the west. When Andrew Carnegie, the steel baron, first called for the wealthy to spend their fortunes on the poor, his workers were engaged in very visible struggles over harsh working conditions at Carnegie’s steel plants. These workers had a high degree of public support. Thus, while his philanthropic benefactors did curry some public favor, there was widespread skepticism over the motivations of his charitable giving.

Also, high-profile, 19th-century authors such as Oscar Wilde and Charles Dickens often wrote essays and fiction that satirized and denounced the way that philanthropy seemed to entrench inequalities rather than dissipate them. That literary thread seems almost absent today.

Q: In the book, you document how philanthrocapitalism is seeking to make both charities and public sector institutions run more like corporations, both in structure (with the seeding of for-profit "social enterprises") and operation (as in the case of teacher evaluation reform). What is gained and lost in this approach?

A: It’s very obvious there’s been a considerable shift in how donors, particularly at large foundations, understand and measure their own impact. Garry Jenkins, a law professor at Ohio State, has done important work here, showing how large foundations such as the Gates Foundation increasingly refuse to accept ”open-door” proposals from smaller non-profits: returning again and again to proven recipients. This tendency is undermining genuine competition.

Grantees feel increasingly burdened by unreasonable expectations and short turnarounds for demonstrating a gift’s impact. The education sector in the United States has gone through upheaval after upheaval as schools and school districts try and meet the mercurial demands of donors who are themselves accountable to no one other than a foundation’s trustees or board of directors.

Q: In a review for The New Republic, Dana Goldstein asserts that your book wrongly insinuates the Gates Foundation's philanthropic work is about laying the ground for Bill Gates' own financial gain. This seems to be a misreading of your book's entire premise, which argues that the philanthrocapitalists seek to solve problems of social inequality through market expansion—not because of their own "lust for profit" but because of a sincere faith in unbridled capitalism. Could you clarify the significance of this distinction with specific reference to the Gates Foundations' work?

A: My main argument is not that Gates is trying to position himself to profit personally. My point is that he’s overly sanguine about the value of positioning and helping other elite actors to benefit financially from his own giving. His foundation has offered tens of millions in non-repayable grants to some of the world’s largest corporations, including Mastercard and Scholastic. In email interviews, a spokesperson for the Gates Foundation suggested to me that any giving to for-profits is in keeping with IRS regulations which stipulate that grants must be used solely for charitable gain. But clearly the foundation’s giving is used in a highly commercial manner by recipients such as Mastercard.

U.S. taxpayers subsidize philanthropic foundations such as the Gates Foundation through displaced tax revenue. I’d like to see more media and congressional scrutiny over whether the Gates Foundation’s charity towards Mastercard is really a fair use of taxpayer money. I also worry about the precedent that is being set. If the Gates Foundation can offer a gift to Mastercard, there’s nothing stopping the Koch brothers from directly subsidizing any corporation they want—as long as they can argue that the gift was in line with their own charitable mandate.

Q: In the book you grapple with one tenet of this faith in business: the idea that the "data-driven" and "market-based" philanthropic efforts of today are far more efficient and productive than social services provided by the government. Is this true? What are the numbers on who philanthropy helps today and who it costs in lieu of tax revenue?

A: Scholars like Robert B. Reich place the yearly cost to the U.S. treasury at $40 billion—this is what overall deductions… [more]
georgejoseph  2015  philanthropy  philanthrocapitalism  charitableindustrialcomplex  gatesfoundation  billgates  melindagates  schools  education  policy  democracy  power  lindseymcgoey  interviews  fosterfries  robertreich  robberbarons  charity  taxes  philanthropicindustrialcomplex  capitalism  control 
december 2015 by robertogreco
"To Hell with Good Intentions" by Ivan Illich
"Next to money and guns, the third largest North American export is the U.S. idealist, who turns up in every theater of the world: the teacher, the volunteer, the missionary, the community organizer, the economic developer, and the vacationing do-gooders. Ideally, these people define their role as service. Actually, they frequently wind up alleviating the damage done by money and weapons, or "seducing" the "underdeveloped" to the benefits of the world of affluence and achievement. Perhaps this is the moment to instead bring home to the people of the U.S. the knowledge that the way of life they have chosen simply is not alive enough to be shared."

"I am here to entreat you to use your money, your status and your education to travel in Latin America. Come to look, come to climb our mountains, to enjoy our flowers. Come to study. But do not come to help."

[via: ]

[Update 6 May 2013: An article came up today that brought me back to Illich's lecture: ]

[Update 27 July 2013: new URL for "Letter to a Young Social Entrepreneur: the poor are not the raw material for your salvation"

and a pointer to Robert Reich's "What Are Foundations For? Philanthropic institutions are plutocratic by nature. Can they be justified in a democracy?" ]

[Also available here: ]

[Update 6 April 2016: referenced again
and an alternate link ]
education  culture  politics  travel  activism  ivanillich  1968  humanitariandesign  designimperialism  mexico  do-gooders  goodintentions  middleclass  us  latinamerica  poverty  hypocrisy  blindness  self-importance  deschooling  charitableindustrialcomplex  liamblack  robertreich  gatesfoundation  plutocracy  democracy  robberbarons  power  control  warrenbuffet  billgates  georgesoros  foundations  philanthropicindustrialcomplex  capitalism 
july 2011 by robertogreco
Have we officially returned to when the Robber Barons ruled? | Thom Hartmann - News & info from the #1 progressive radio show
"We know millions around nation have been screwed over by predatory lenders & fine print credit card contracts—& now are swimming in debt.  But can you believe that some of these people are actually being thrown in prison for going into debt? That’s right—American in 21st century is bringing back debtors’ prisons.  People who can’t pay off their credit cards can be thrown in jail in a third of states in our nation—& since the start of 2010—5,000+ arrest warrants have been issued against people who owe as little as $1,000 to massively profitable corporations like Capital One. <br />
<br />
So let me get this straight—a few years after the financial crisis where massive fraud was perpetrated by Wall Street—not one bankster is in jail—but 5,000 low or middle-class Americans who were screwed over by these banksters were sent to debtor’s prison?<br />
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It’s official—Republicans have set our country back more than 100 years—to 1800’s—when Robber Barons ruled & our politics were corrupted to the core."
debtorprisons  thomhartmann  us  policy  economics  crime  law  wallstreet  debt  creditcards  robberbarons  2011 
march 2011 by robertogreco

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