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Charities Aid Foundation

is addressing inequality through philanthropy a paradox?

30 January 2015

The super rich are increasingly being held up as examples of extreme inequality. Many would argue that when billionaires show concern about such issues they are simply paying lip service. But presuming that they are genuine in their desire to address inequality, what can and what should they do about it?

Winnie Byanyima, executive director of Oxfam International, said in an recent interview that she doesn’t believe that charity is the way to solve the world’s problems, instead focusing on how public policy can improve lives.

‘You are not going to lift everybody out of poverty through the kindness of wealthy people,’ she said.

It’s true that philanthropy alone can only do so much. Philanthropic resources can help to test new ideas and plug gaps in services but ultimately, government policy and the way income is generated and the business practices employed in the process will always have a greater effect than charitable endeavour.

But the efforts of wealthy philanthropists must still form part of the solution. Oxfam released a report last week that claimed by 2016 the combined wealth of the richest 1% will overtake that of the other 99% of people in the world.

The charity’s new campaign Even It Up sets out many ambitious calls to action for governments and corporations to tackle inequality, but not once does it ask what the world’s wealthiest individuals could do about it themselves. It should.

People are becoming increasingly disillusioned with politics across the globe, voting turnouts are falling, radical parties are gaining popularity and there are frequent demonstrations of social unrest.

Last year controversial economist Thomas Piketty confirmed this fear in his book Capital in the Twenty-First Century, arguing that wealth inequality is guaranteed to increase, as the rate of capital return in developed countries will always be greater than the rate of economic growth.

Top 1% tackling inequality

There are already some impressive examples of the top 1% tackling inequality though philanthropy. Warren Buffet and Bill and Melinda Gates are leading the way with their innovative foundations, finding practical solutions for global issues. They have also driven forward the Giving Pledge movement, encouraging 127 fellow billionaires worldwide to commit to give at least half of their wealth away to charitable causes over the course of their lifetimes.

“We think this is something [other billionaires] would enjoy as much as we do,” Melinda Gates said in an interview last week. “If you’ve got billions of dollars you probably don’t need all of it. A lot of them have it in the back of their mind that they might do it, but they don’t know how.”

So what can be achieved by those who genuinely want to address inequality through philanthropy? There’s a lot to be said for giving to well-established social justice causes with mass popular support, rather than trying to start something new because such causes already have popular grass-roots credibility.

It might also be important that philanthropists do not seek to have disproportionate influence on how those organisations proceed. Imagine the effect it would have on the legitimacy of a campaign for workers' rights in India if that campaign was being backed, and influenced by an American retail billionaire. It could also be necessary to give anonymously to avoid in any way distorting public perception of the charity by association, or that their reason for supporting the cause is to perpetuate their own influence and retain control.

Conscience laundering

In a 2013 opinion piece for the New York Times, Peter Buffet described a phenomenon which he termed "conscience laundering" in which traditional philanthropists would gather together and search “for answers with their right hand to problems that others in the room have created with their left”. Encouragingly, there is a movement taking place among the younger wealthy generation to address this and ensure that the way they make money is part of their overall philanthropic efforts.

Buffet has publicly stated that he will not be passing his wealth on to his children and will, instead prioritise his philanthropic commitments. It’s not perhaps a realistic or attainable solution, but ensuring that wealth isn't passed on to younger generations might be just as important in tackling inequality as the actual resources that could be provided for social justice causes.



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