Rhodri Davies, Programme Leader, Giving Thought

Rhodri Davies

Head of Policy

Charities Aid Foundation

The role of giving

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GIVING CRITICISM: "WINNERS TAKE ALL", PHILANTHROPY AND INEQUALITY

5 October 2018

Winners Take All: The Elite Charade of Changing the World is a new book that it is making big waves in the world of philanthropy. In it the author, former New York Times journalist Anand Giridharadas, mounts a fierce attack on a number of aspects of philanthropy, which has sparked a vigorous debate about the role of giving within society today. (And even a fairly awkward incident where the author briefly stormed out of a TV interview alongside Matthew Bishop, co-author of the 2008 book Philanthrocapitalism – about 13 minutes through this video).

Given that the role of philanthropy is something I have long been fascinated by (to the extent of having written my own book about it, in fact...), I took the opportunity of a recent long-haul flight to read Giridharadas’ book and thought I would proffer some thoughts about it here.

The first thing to say is that I would definitely recommend it. It’s immensely readable, with lots of material drawn from interviews and colourful portraits of individuals to illustrate all the points being made. And more importantly, many of those points go to the heart of some of the biggest challenges facing philanthropy and the non-profit world today. (Many of which aren’t actually new, as I will highlight below, but that does not detract from their importance). Whilst one could argue that the manner in which some of the criticisms in Giridharadas’ book are portrayed is overly black-and-white, there is no denying that the substantive challenges he poses are ones that anyone who wants to maintain a positive narrative about philanthropy needs to address.

To get a sense of how telling the criticisms in the book are, and how they could be answered, we need first to identify what those criticisms are and where they are aimed.

WHAT THE BOOK IS ATTACKING, AND WHAT IT ISN'T

The first thing to say is that this book is not a fundamental critique of philanthropy per se. (This is partly my own assessment, but I feel on reasonably safe ground since I got involved in a discussion on Twitter in which the author himself eventually chipped in confirming pretty much the same thing). Rather, the focus of the attack is elite philanthropy; and specifically a particular type of elite philanthropy that promotes the idea of market-driven solutions as the only way to approach things, at the expense of all others. Hence some of the key targets in the book are:

  • The technocratic, market-driven milieu centred around ‘thought leadership’ events like the World Economic Forum’s annual conference in Davis or the Aspen Institute Festival of Idea (which Giridharadas dubs “Marketworld”)
  • The belief that a ‘win-win solution’ can be found for every problem; where all parties benefit and none need to make concessions.
  • The new breed of ‘disruptive’ Silicon Valley philanthropists
  • Management consultants (particularly, it should be said, McKinsey & Co.)

One of the interesting questions for readers in the UK is whether this makes the book’s criticisms less immediately relevant. (The author admitted in the walk-out interview referenced above that he deliberately chose to focus on the US and that some of his points may be wholly or partly specific to that context). We certainly have major donors here in the UK, but culture of elite philanthropy is currently not on a comparable scale to that in the US. Furthermore, the question of the corrosive effect of big money philanthropy on democracy is less acute in the UK so far - partly, perhaps, as a result of more restrictive rules on donations for political purposes and partly just as a reflection of the differing histories of the relationship between state and philanthropy in the US and the UK through the 20th century.

I am also not sure to what extent the critique of “Marketworld” that lies at the centre of this book will chime with those who work in the UK non-profit sector. There are, for sure, elements of the culture described that I have definitely seen reflected in discussions around the charity and civil society sector in this country for the last decade, but I don’t know that they have become orthodoxy in the way that the book implies. There have always seemed to be at least as many people railing against notions like impact measurement and ‘win-win’ approaches as there are embracing them. The interesting question for me is whether the same actually holds true in the US; and the book is glossing over a contrasting viewpoint that might offer a counterexample to the author’s central thesis? (This certainly seems to be what some critics of the book are suggesting, such as David Callahan, Editor of Inside Philanthropy).

The other general comment worth making up front is that Giridharadas assumes that the focus of philanthropy is addressing inequality. This is perfectly justifiable in many ways: poverty and inequality has always been one of the key concerns of philanthropy, and many would argue that these are the most fundamental issues facing our society today.

However, one could also argue that by almost entirely ignoring other social and environmental issues - which Giridharadas arguably does - one misses out a large body of philanthropic activity. And this other philanthropic activity may be less susceptible to some of his key criticisms than the examples he chooses to focus on. This is another point made by David Callahan, who cites a range of examples of progressive approaches to philanthropy that have achieved impressive results on issues away from the sphere of inequality.

Having put in place those caveats, let us park them for now and assume that we are primarily talking about inequality and examine the book’s arguments in that light.

ELITE PHILANTHROPY AND INEQUALITY

The book’s central argument, as we have noted, is that market-led elite philanthropy is not the right way to address inequality. This is an important criticism, but to get a proper sense of what is being claimed we need to parse it a bit.

The strongest and most fundamental critique we could make would be to claim that inequality is a precondition of all philanthropy, so philanthropy simply cannot be used as a tool to address inequality. The argument here is that in order to have philanthropy at all, you must have a situation in which there are ‘haves’ and ‘have-nots’ ie there must already be inequality. And since this inequality is a prior condition of philanthropy, it follows that philanthropy can never really be used to address inequality effectively. Hence philanthropy is only ever part of the problem and not part of the solution.

It is not entirely clear whether Giridharadas is putting forward an argument of this kind. As we have already noted, his main target is the “Marketworld” approach to philanthropy and his attitude towards philanthropy more generally is slightly more ambiguous. At certain points in the book, he seems willing to concede that there might be approaches to philanthropy rooted in other traditions that avoid at least some of his criticisms. At other points, however, Giridharadas seems to want us to believe that the ‘Marketworld’ orthodoxy is so prevalent that it has effectively become the whole of philanthropy. This is a claim many would refute, but if one accepts it, then clearly the book’s arguments essentially apply to philanthropy as a whole.

Even if Giridharadas is not making a claim that philanthropy is inherently incapable of addressing inequality, this criticism is very much part of the historical backdrop of philanthropy. It is therefore worth considering some of the different responses that have been taken to it, as they bring to light most of the relevant issues.

Response 1: Accept criticism, and abandon philanthropy

Those who accept the idea that philanthropy is a symptom of inequality usually argue that we should abandon it in favour of other ways of addressing the fundamental issues of inequality in our societal structure (e.g. through the political system). This is what George Orwell suggested in his essay The Soul of Man Under Socialism, where he argued that “[charity] is not a solution: it is an aggravation of the difficulty. The proper aim is to reconstruct society on such a basis that poverty will be impossible. And the altruistic virtues have really prevented the carrying out of this aim”. It is worth noting that Orwell’s criticism was not solely based on a structural critique of charity at a macro level: equally important to him were individual-level concerns about the way in which philanthropy was perceived as demeaning or dehumanising.

Similar concerns led to negativity towards the idea of charity in socialist thinking elsewhere, too – notably in the late 1940s in the UK, at the dawn of the Welfare State. The historian Frank Prochaska argues that “many Labour politicians, civil servants and students of social policy, transfixed by state social action and their parts in its promotion, shared the view that charity was demeaning. As government would attend to everyone’s needs from the cradle to the grave, what was the point of it? For those who took this view, Victorian traditions of parochial service and self-help were repugnant, remnants of a tribal past.” And you can still find this point of view expressed by Marxist thinkers today- the populist philosopher Slavoj Zižek, for example, gave a lecture in 2009 in which he approvingly cited Orwell’s criticisms of charity.

More recently, Peter Buffett (son of renowned philanthropist and investor Warren Buffet) put forward a strong version of this criticism in a widely-cited 2013 article attacking what he called “The Charitable Industrial Complex”. Reading this again, it is striking how much it echoes the central argument of Giridharadas’s book.

Buffett argues that most philanthropy “is what I would call ‘conscience-laundering’ -  feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity... But this just keeps the existing structures of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over.” His damning conclusion is that “as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine.” And that therefore “it is time for a new operating system”.

There are, however, those who might not be quite so damning in their assessment of philanthropy, but would still argue that  we should not let the good it has done distract us from the underlying issues that it does not address or from other approaches that would be more effective at delivering equality. This is pithily summed up in Martin Luther King’s famous comment that “Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.”

Response 2: Claim inequality is inevitable and philanthropy is a necessary tool to rebalance

A totally different view of the relationship between inequality and philanthropy can be taken, if one argues that inequality is an unavoidable element of society and that philanthropy is a vital counterweight as part of a wider social contract that forces the rich to give back to address the needs of the poor. Anyone holding this view can argue that our original criticism is flawed, because it is a mistake to suppose there is any such thing as “solving” inequality. Which obviously gets philanthropy off the hook.

The idea that poverty is part of the natural order rather than a systemic problem that can be solved, and that the purpose of philanthropy is merely to play a part in addressing the symptoms of inequality, has a long history. In many versions of pre-20th century Christian teaching, poverty is seen either as reflection of a failing on the part of the individual or merely an unavoidable accident of birth. A related distinction between the ‘deserving’ and ‘undeserving’ poor was often drawn too, which played a big role in shaping philanthropy. For a long time, approaches to giving were assessed on the basis of the extent to which they managed to help the former group whilst not rewarding the latter. Failure to recognise this distinction was seen as a cardinal sin by movements such as the Charity Organisation Societies of Victorian England, which sought to rationalise philanthropy in order to make it more effective ( for more on this, see Ch. 5 of my book Public Good by Private Means).

Giridharadas argues that a view of the kind we are considering can be ascribed to the celebrated philanthropist Andrew Carnegie, who believed that inequality was inevitable and that philanthropy was the best possible tool for addressing it. It is certainly true that Carnegie’s views on this issue can look uncomfortable to a modern eye. As his biographer, David Nasaw, relates:

"Workingmen on both sides of the Atlantic questioned whether the Pittsburgh steelmaker's huge charitable donations would have been better spent on higher wages, improved working conditions, and an eight- rather than 12-hour workday. Carnegie responded in a speech in Pittsburgh that he kept wages low to remain competitive, and that even had it been possible for him to share some of his profits with his workers, it would have been neither “justifiable or wise” to do so. “Trifling sums given to each every week or month... would be frittered away, nine times out of ten, in things which pertain to the body and not to the spirit; upon richer food and drink, better clothing, more extravagant living, which are beneficial neither to rich nor poor.” The lower the costs of labour, the higher the profits. Far better, in his view, to squeeze money from workers' paycheques, aggregate it, and give back to the community in the form of public libraries and concert halls”

Giridharadas’ argument is that Carnegie’s views on philanthropy, as outlined in his “Gospel of Wealth” have been so influential that we should really take note of this part of his thinking, because it has profoundly shaped the development of philanthropy. And there is definitely something to this point. Although many modern philanthropists might take a more restrained and less paternalistic tone when it comes to talking about poverty and inequality, many of them might also – like Carnegie – not see their own wealth creation as part of the problem; and see their philanthropy as a vital part of addressing the symptoms without acknowledging that it might leave deeper, underlying causes untouched.

Giridharadas’ claim is that this is the fundamental problem with “Marketworld” philanthropy. He argues that whilst today’s philanthropists may not share Carnegie’s view that inequality is unavoidable, and may well believe that poverty is a systemic problem that can be addressed, a dogmatic adherence to belief in the inherent good of markets prevents them from acknowledging many of the real root causes. Since, by Giridhardas’ reckoning, many of the capitalist structures that enable wealth creation are also the fundamental causes of inequality, if one is not willing to entertain deep criticism of these structures - which he claims most philanthropists are not - then one stands no change of making any meaningful headway in addressing poverty and inequality.

The generous reading of this situation is that it reflects a genuine difference of opinion - between those who believe in markets as a force for good and those who primarily see them as a force for ill. The more cynical reading is that even the former group are in fact perfectly well aware of the negative consequences of market capitalism; they just choose to ignore them and instead use philanthropy as a way of easing the troubles of the poor just enough to stave off dissent and unrest. Giridharadas certainly entertains this view (although he doesn’t necessarily adopt it fully), and argues that some big money philanthropy seems to have the air of “bread and circuses”: a distraction from the underlying issues that need to be addressed.

Philanthropy as a means of repressing dissent

Again, it is worth noting that this is a point of view with a rich historical heritage rather than a new criticism. Many have argued over the years that philanthropy is often motivated more by a desire to quell unrest rather than genuine altruism.

The historian Geoffrey Finlayson, for instance, noted that, “paternalism and philanthropy... might be a way of upholding law and order, and protecting property from attack. They might also be a means of defending the established social order, to which most philanthropists belonged, against radical criticism”. Some philanthropists have also themselves been pretty explicit about this being their aim. Jonas Hanway, for instance, stated that, “the role of charity was central [because] only charity could mediate between rich and poor and act as a counterbalance to ‘all the evil passions of envy, covetousness, revenge, so frequent’.”  And it thus offered the “only possible remedy for the ‘hunger of the poor crying aloud’”. (As detailed in Donna Andrew’s book Philanthropy & Police: London Charity in the 18th Century).

And even canny (if possibly cynical) fundraisers have recognised the power of fear of unrest as a motivational tool: Thomas Barnardo (founder of the leading childrens’ charity that still bears his name) was reportedly “well aware of the role of philanthropy in staving off social unrest... and he used this argument to add to others in his appeal for funds...” Barnardo argued to wealthy donors that “every boy rescued from the gutter... is one dangerous man the less” and that without the required philanthropic efforts there would come a time “when this setting mass of human misery will shake the social fabric”. (As document by Finlayson).

Giriharadas doesn’t necessarily impute these sorts of views to all philanthropists (although he certainly accuses a few of them of getting pretty close!) His main criticism is that a refusal to entertain the notion that market principles themselves might be part of the problem when it comes to poverty and inequality (rather than the solution) prevents philanthropists steeped in the doctrines of “Marketworld” from considering the sorts of approaches that he argues would result in genuine change.

Philanthrocapitalism and 'business-like' philanthropy

 Of course, this is view that many philanthropists (and others) might take issue with. They would argue that market-based approaches are not just legitimate, but are in fact often better than any other kind of approach to addressing social problems. This is essentially the premise of the 2008 book Philanthrocapitalism: How the Rich Can Save the World, which is probably the last book on philanthropy to gain this much mainstream attention (and whose co-author Matthew Bishop was the other protagonist in the TV interview walk-out incident noted earlier on).

Giridharadas is not unaware of these points of view. Far from it: in fact he devotes an entire chapter to them in the book, where he expresses incredulity at the pronouncements of various advocates of market-based solutions to society’s problems- most notably Bill Clinton (whose remark that the sort of philanthrocapitalist approach he has taken in his post-Presidential career is “all that does work in the modern world” leaves Giridharadas particularly aghast, and gives the chapter its title).

The idea that philanthropy should be more “business-like” or should adopt commercial principles is another thing that is definitely not new, and has in fact been around for a long time. (I highlighted the history of social investment approaches, for instance, in a 2016 article for Pioneers Post). What might be new, however, is the associated phenomenon identified by Giridharadas in an earlier chapter: namely the emergence of an entire ecosystem of ‘thought leadership’ which largely exists to promote and reinforce a belief in market-based approaches (and the ‘win-win’ solutions that the author particularly takes issue with).

In the past, although many from the world of business became philanthropists - and may well have brought business principles to bear on their approach to giving – they were not automatically welcomed or unquestioningly lionised. Whilst not everyone would go as far as the New Orleans newspaper that in 1909 declared that philanthropy had become the “recognisable mark of a wicked man” (hat-tip to Ben Soskis for that one); famous philanthropists like Andrew Carnegie and John Rockefeller were viewed with more than a little suspicion by policymakers and the public (one has only to look at the wonderful cartoons from the early 20th century satirical magazine Puck to get a sense of the breadth of criticism levelled at these big donors). Some philanthropists themselves even admitted that their wealth and success in business did not mean they should be accorded special status when it came to addressing the needs of society. Julius Rosenwald, for instance, remarked that Most people are of the opinion that because a man has made a fortune, that his opinions on any subject are valuable. Don't be fooled by believing because a man is rich that he is necessarily smart. There is ample proof to the contrary.”

The danger that Giridharadas identifies with the current prevalence of the “Marketworld” orthodoxy is that it has become an echo chamber; in which those who believe in market principles and philanthropcapitalism hear their views repeated back at them by a vast array of consultants and ‘thought leaders’ and thus come to believe in them ever more fervently. I think this is one of the most important criticisms in the book, because philanthropy – like anything else – must always remain open to scrutiny and challenge if its role within society is to remain legitimate and positive. And that scrutiny and challenge is there: the trick is to be willing to engage with it.

Response 3: Accept inequality poses a challenge for philanthropy, but one that can be taken on board.

This final response is essentially the pragmatic one that walks a line between the previous two. Here we acknowledge that there are genuine challenges when it comes to using philanthropy to address the problem of inequality, but argue that the only practical course of action is to accept the reality that we currently live in a society where some people have large amounts of wealth and others do not, and work with those who are motivated to redress this imbalance through philanthropy to ensure that their giving avoids as many of the pitfalls as possible.

This kind of response can go a long way in highlighting how both the way in which money is made and the way in which it is given away can unintentionally add to the problem of inequality and thus reduce the chances of addressing the problem effectively, but stops short of seeing either as a reason to abandon hope in philanthropy altogether. I would count myself as falling in this group. My interest is primarily in understanding the criticisms and challenges facing philanthropy now and throughout history, and how the practice of giving and the policy environment should respond to ensure that philanthropy can remain a positive force for improving society in the future.

I’m not entirely clear where Giridharadas sits on this question. At times, he seems willing to entertain the idea that philanthropy (or at least some of it) could respond in such a way that it would avoid his criticisms; or that businesses could change the way they operate so that wealth creation would not be seen as so problematic. He seems positive about the idea of B Corporations, for instance, as a fruitful avenue for development. Of course, the idea that making business more responsible is a vital part of ensuring the legitimacy of any philanthropy that flows from it is again not new.

The renowned Quaker philanthropist George Cadbury, for instance argued that “making money and giving it away form... a single pattern, and making it [can] be as constructive socially as giving it away. No amount of philanthropic giving could take the curse off a fortune that had been accumulated carelessly or without regard for the welfare of the workpeople who had laboured for it.” (As quoted in David Owen’s English Philanthropy 1660-1960).

 At other times, Giridharadas seems to suggests that it is impossible for philanthropy to avoid his criticisms, and that any pragmatic attempts to address the failings of philanthropy rather than simply abandoning it are tantamount to complicity in the very problems we should be seeking to address. This point of view comes across particularly in the epilogue of Winners Take All, where Giridharadas approvingly cites the work of political theorist Chiara Cordelli. She has argued (e.g. in a paper in Reich, Cordelli & Bernholz (eds) Philanthropy in Democratic Societies ) that philanthropy should be understood as a form of reparative justice:  where donations from the wealthy are seen as a form of recompense for the injustices wrought by the capitalist system that made them possible, and that donor choice should be accordingly limited so that money can be rationally allocated to those who need it most.

SHOOT THE PRAGMATISTS?

Cordelli also argues, in an interview with Giridharadas for his book, that those who take a pragmatic view of the situation (like me, I guess!) are just as much of a part of the problem as the elite philanthropists themselves; because our acceptance of the need to work within a market capitalist framework (even if only for the time being) prevents us from addressing the failings of that framework in the way she feels we should. She backs up her point by drawing the analogy of a kind-hearted slave owner who disagrees with slavery, but has chosen to accept it on pragmatic grounds and do his best to be kind to his slaves rather than refuse to accept it and campaign for abolition.

This analogy seems a bit overblown to me, but Cordelli’s original point is an important one, and I think her work on this topic is valuable reading for anyone who wants to engage seriously with the big issues facing philanthropy (even if you don’t necessarily have to agree with her conclusions!) The idea that we should reject even pragmatic acceptance of philanthropy is, for me, one of the most challenging parts of Giridharadas’ whole book (even if, as already noted, it is not clear that he is actually going quite this far). And it is the point where it becomes clearest to me that I disagree.

In the course of my own work over the years, I have thought about all the challenges and criticisms that Giridharadas levels at philanthropy. (I even included a chapter in my book called “criticisms of philanthropy”; just to show that I’m not making this up…)  Many of these criticisms I find pretty compelling, and sometimes difficult to answer. Yet despite this, I don’t feel the need to give up on philanthropy. Rather, I think the task is to take on board all of the valid criticisms and use them to shape efforts to improve philanthropy so that it can become the best version of itself.

I can certainly see the attraction of positioning yourself as an outsider and attempting to influence that way: it allows you to paint issues more broadly and gives far more opportunity for powerful rhetoric. Insider influencing, on the other hand, tends to require more diplomacy and flexibility and is frankly a lot less immediately satisfying most of the time. There is also a constant need to guard against institutional capture (of the sort that Giridharadas rightly warns against in his critique of the “thought leadership” industry).

There are times when outsider influencing is the right way to go. Giridharadas’ outsider critique of philanthropy is a case in point itself, as it has cut through to a far greater extent than many of the other voices that have been saying similar things for a long time. However, it does not follow that insider influencing is somehow less valid. I think that over the long term, those of us who are willing to engage with philanthropy and attempt to address its failings while maximising its strengths are more likely to achieve lasting change than if we all decide to give up and criticise from the sidelines. Perhaps that betrays me as a pragmatist rather than an idealist, but so be it.

Conclusion

As I read it, the point of Giridharadas’ book is not to argue that philanthropy as a concept is entirely flawed. Rather, he is highlighting the dangers posed by what he sees as an increasingly dominant orthodoxy based on the idea that market-driven solutions, led by a wealthy elite of unelected mega-donors and facilitated by the non-profit sector and a growing ecosystem of ‘thought leaders’, are the best possible way to address inequality and the wider challenges facing society. And that is not a critique that can - or should - be easily ignored by anyone who wants to put forward a positive vision for philanthropy.

I wouldn’t necessarily agree that the idea of “win-win” solutions is fundamentally flawed, or that exploring approaches such as impact investing - which seek to combine social and financial returns – is a waste of time. Apart from anything else, these have been a part of the landscape of philanthropy for far longer than is often claimed. But I would agree that the idea that these approaches can be used in all contexts, or that they are always preferable to other methods of social change or government action, is highly problematic.

As I have previously argued (and please forgive the gaucheness of quoting from my own book):  “There are many ongoing problems in society that have proved resistant to our efforts to combat them; in some cases for hundreds of years… It seems fanciful to suppose that we can always find new ways of addressing these problems that can ensure the same social benefits that charities have been bringing for hundreds of years, yet also deliver financial returns. This may be feasible in some cases… but in many instances it will not be possible.”

There are some parallels here with Effective Altruism (EA). Just like EA, I don’t think the concept of market-driven philanthropy is in itself problematic: the problems only come when people attempt to claim for it some exalted status as “the right way” to do philanthropy, at the expense of all others. One of philanthropy’s key strengths (as well as a major flaw in some ways) is that it is pluralistic: a reflection of the myriad different views and choices of individuals. If that pluralism is undermined by attempts to establish the primacy of one cause or approach at the expense of all others, then that should be a concern.

So to that extent, I agree wholeheartedly with Giridharadas’s criticisms. Anyone claiming that market-driven approaches to philanthropy are the only game in town, or that we should always seek ‘win-win’ solutions and view it as a failure if none can be found, is promoting a narrow view of philanthropy that’s neither reflects its historical tradition nor takes into account the very real concerns about the relationship between philanthropy and inequality (or indeed the relationship between big-money giving and democracy, which is also a topic considered in the book but which I haven’t got into here for reasons of space. If you want to know what I think about it, you can find out here).

Conversely, however, I would argue that anyone who takes the opposite view and concludes that all market-influenced approaches to philanthropy are fundamentally tainted and must be abandoned is taking a similarly narrow perspective and is equally wrong. The pluralism of philanthropic aims and ambitions should be reflected in a wide plurality of approaches encompassing everything from impact investing and social enterprise to community organising and campaigning for social justice. Only then can genuine, sustainable change be achieved.

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