Bending the Arc of Philanthropy Towards Justice

Our field has undergone profound shifts in the last 25 years amounting to a quiet revolution. Put crudely, international philanthropy a quarter-century ago reflected an ‘aid’ orthodoxy in which the rich bestowed their wealth upon the poor, whether such giving was taking place on an individual level or from ‘donor’ states to poorer countries.

Twenty-five years on, these norms have been upended and there is greater appreciation of the philanthropic contribution and potential of emerging economies. Philanthropic traditions of solidarity and mutual self-reliance – themselves with deep roots across the Global South – have resurfaced alongside a flowering of community philanthropy.

Philanthropic practice has also experienced profound change. There was no extensive internet and therefore no online giving when Alliance was born in 1996. Now online giving is growing at ten times the rate of other forms of giving allowing everyone to become a donor. Institutional philanthropy, too, has assumed new forms with the primacy of traditional philanthropic foundations being challenged, and some fear supplanted, by less transparent modes of giving through donor advised funds and limited liability companies. Forms of support for the social sector have broadened considerably and now include philanthropic engagement through social investment and impact investing. Foundations are also beginning to pay greater attention to how their assets are invested in global capital markets. When a climate funder invests its multibillion-dollar endowment in fossil fuel companies, for example, it can rightly expect scrutiny over how it squares the circle between its grants and investments.

Meanwhile, an increasingly sophisticated and better funded support ecosystem is helping philanthropy adapt to this new reality. A process of professionalisation is literally ‘lifting up philanthropy’ – to use the title of an initiative from infrastructure body WINGS – enabling our field to act more effectively, systematically and globally alongside governments, business and international institutions.

Community philanthropy at work in Kenya. Credit: KCDF

Take for example a new worldwide commitment to act on climate which was due to launch in September 2021 just months before the UN’s pivotal climate summit COP26. While climate funding remains woefully low at 2 per cent, key figures in the climate negotiations are highlighting philanthropy’s ‘incredibly influential’ role. In public health, Dr Tedros Adhanom Ghebreyesus, the director-general of the World Health Organization made similar observations about philanthropy’s far-reaching impact when he spoke exclusively to Alliance last year as the Covid pandemic escalated.

But while there is much to welcome and even celebrate in philanthropy’s coming of age, there are also good reasons to worry about the future, and whether philanthropy, as currently practised, is fit for the purpose of engaging with the most pressing issues of our time such as inequality and climate change. This article, and this special 100th issue of Alliance, focuses on what one could call ‘internal’ issues to philanthropy – issues related to the way philanthropy as a field has developed and might develop in future – rather than how it engages with pressing ‘external’ issues. It should go without saying that engaging with these issues is the whole point of philanthropy.

Parallel universes
Today, philanthropy has very different faces and finds itself pulled in different directions. In fact, we might go as far as to say that two parallel philanthropic universes have emerged which are likely to shape the future of philanthropy over the next 25 years.

Democratic universe
In one universe, the rise of community-based philanthropy, movements to shift power to grassroots, and technology-enabled movements like Giving Tuesday feel inherently more democratic – everyone participates on an equal footing and all kinds and levels of giving are respected equally. And when you add to that recent demands to diversify foundation boards, the growth of participatory grantmaking, an impetus for racial and gender justice and calls to ‘shift the power’ – though meaning different things to different people – an almost palpable egalitarian and democratic ferment can be felt pulsating through our sector.

Plutocratic universe
But in another universe, there are growing concentrations of wealth – and thus ever-deepening pools of philanthropic capital. The fact that there are five times more billionaires today than when Alliance was born 25 years ago should give us cause for reflection. Today’s picture of widening wealth inequality means that few would seriously claim that philanthropy in its totality is making our society more equal.

Instead, the universe of billionaires who account for an undeniably significant proportion (though by no means all) of both total wealth and thus total philanthropy seems strangely at odds with our sector’s democratic uprising. Is philanthropy ultimately an elite pursuit or a democratic one? The army of professional advisers, wealth managers, and fixers employed by the ultra-wealthy can make philanthropy seem something that rich people do with varying degrees of sincerity, self-awareness and aptitude.

But intentions aside, there is no doubting the power and influence of major philanthropists. While there are notable exceptions, elite philanthropy is often about exercising power rather than giving it up. Such power may be used in benign ways but it’s hard to claim that philanthropy is both powerful and democratic at the same time.

The results of our anniversary survey seem to reinforce this conclusion. For example, while Bill Gates himself and his eponymous foundation were selected by a large proportion of Alliance readers as having the ‘most positive’ impact on society, a significant minority call into question the size, scope and even legitimacy of their work.

When a climate funder invests its multibillion-dollar endowment in fossil fuel companies, for example, it can rightly expect scrutiny over how it squares the circle between its grants and investments.

Some even go as far as to suggest that elite philanthropists are not a solution to but a symptom of today’s problems. This question is likely to divide opinion as the number of billionaires grows around the world.

The legitimacy of philanthropy is at stake – as many outside the sector look to billionaires as representative of much giving. Whether or not that’s fair, looking beyond the giving of ultra-wealthy individuals to also consider their low rate of taxes, the practices they employ at the companies that gave them their wealth, the origins of that wealth and the investment of their endowments in global capital markets in dubious sectors such as fossil fuels – via highly paid investment managers – raises questions that demand answers.

But one thing is clear as we reflect on the developments of the last 25 years and look forward to the future. The parallel universes inhabited by philanthropy make it even more important to be specific about what type of philanthropy we are talking about. While philanthropy is universal, it is also highly contextual: the changes which we think are needed depend on what and whose philanthropy we are talking about. Legislation and regulation designed to manage elite philanthropy, however well-intentioned, should avoid having any negative impacts on everyday giving.

Editorial advisory board
As editors and editorial advisory board members tasked with putting together this special 100th issue of Alliance, we’ve been in a privileged position to observe these developments. Earlier this year we consulted members of the wider editorial advisory board to ask for their views and hopes for philanthropy over the coming period. While these do not amount to a collective view, here are a selection of priorities we would like to put forward.

In the Global South, philanthropy should:

  • shift more resources from operating to grantmaking models
  • support the institutionalisation of narratives of philanthropy through building domestic academic knowledge
  • help ensure the power to shape the narrative of philanthropy and give it institutional form is situated in emerging countries
  • ensure it is centred among citizens rather than elites in these countries to avoid the problems of elite philanthropy seen in the Global North

Everywhere, philanthropy should:

  • increase levels of participation and trust-based philanthropy
  • adopt an international outlook
  • fulfil its unique role as provider of patient risk capital rather than continuing to fund ‘safe’ causes
  • innovate in funding practice including participatory grantmaking and pooled funding
  • learn more and gather more data about non-institutionalised giving beyond the scope of the member bodies of institutional philanthropy
  • embrace the ‘dance with complexity’ and avoid solving problems in silos
  • recognise the need for endowed philanthropy to use all assets including investments and grants in alignment with mission
  • increase tolerance of and appetite for critical analysis of philanthropy by providing arms-length funding of philanthropy-focused media

Contributors:

Maria Chertok is director of CAF Russia, and member of Alliance’s editorial advisory board.
Email: [email protected]
Twitter: @mariachertok

Caroline Hartnell served as editor of Alliance from 1997 to 2015.
Email: [email protected]

Charles Keidan is executive editor of Alliance.
Email: [email protected]
Twitter: @charleskeidan

Elika Roohi is digital editor of Alliance.
Email: [email protected]
Twitter: @eroohi

Ingrid Srinath is founding director of the Centre for Social Impact and Philanthropy at Ashoka University, India, and member of Alliance’s editorial advisory board.
Email: [email protected]
Twitter: @ingridsrinath

This article is culled from Alliance Magazine.

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