Increasing critiques of (big) philanthropy

Recent critiques that philanthropy has gone awry are important and provocative appeals to hold big donors and major institutions accountable in a democratic society. Yet, some critics may run the risk of throwing the baby out with the bathwater, write Tory Martin and Michael Moody.

Go to any philanthropy conference today and one of the keynote speakers is likely to be the author of a book about “the elite charade of changing the world” (Giridharadas, 2019), “why philanthropy is failing democracy” (Reich, 2018), or the need to “decolonize” and “heal” (Villanueva, 2018) a philanthropic sector gone awry. 

The same conversation is happening even outside philanthropy’s circles. Historian Rutger Bregman made headlines for bitterly dismissing the “stupid philanthropy schemes” of the rich at Davos, and the public questioned the legitimacy of donor priorities after donations poured in to repair fire-damaged Notre Dame Cathedral. Mainstream media outlets criticise billionaires like Mark Zuckerberg or Michael Dell when they argue against a wealth tax by defending how much good they can do with their wealth through large-scale philanthropy. 

Some (though definitely not all) of these critiques go beyond arguments on the effectiveness of philanthropic practice. They question whether philanthropy even has a legitimate place in democratic societies, and they challenge the considerable power wielded by big philanthropists. Some critics don’t just say “fix it” but rather, “throw it out.” 

Sharp, fundamental, even scathing critique of philanthropy is certainly not new. As Rob Reich points out, French economist Anne Robert Turgot railed in the mid-1700s against donor-directed, perpetual foundations using arguments that are remarkably similar to the ones we hear now. When Andrew Carnegie and other Gilded Age philanthropists announced their philanthropic plans, they were met with deep suspicion – in the same way George Soros and many other big donors are today. 

This debate is necessary and has clearly been helpful in raising core questions about philanthropy’s role over the years. Any powerful, widespread, value-laden social institution like philanthropy should be subject to close examination and critical appraisal. Big donors shape the communities we all live in, often in transformative ways. They have outsized impact on every cause we care about. And their actions have social and moral implications that we should examine closely. 

In fact, thoughtful scrutiny of philanthropy is arguably more essential than ever before, as philanthropy – especially elite philanthropy – is experiencing tremendous expansion and unprecedented evolution. These changes are raising tough questions that we need to talk about. For instance: 

• Increasing economic inequality is feeding increasing philanthropic inequality, as a greater percentage of charitable dollars are coming from a shrinking number of big donors. 
• Donor Advised Funds (DAFs) are growing at lightning-fast speed, yet, unlike foundations, they have no legal payout nor annual reporting requirements. For some observers this creates a moral hazard and perpetuates donor power, even if overall DAF payout rates are higher (in aggregate) than foundations. 
• Turgot’s warning about the dangers of perpetual endowments is coming home to roost, as endowments balloon in size and the debate intensifies over whether deceased donors should wield such long-term control. 
• Philanthropy and nonprofits increasingly intersect in complex ways with government, and businesses increasingly look to “do good” as well as make a profit. This blurring of sector boundaries makes it harder to see clearly what role philanthropy can and should play. 

Fortunately, our ability to scrutinise activities like elite giving – a world that used to be mostly hidden – is also increasing. 

Philanthropy-focused media outlets – from Nonprofit Quarterly to the Chronicle of Philanthropy to Inside Philanthropy – have grown in the last several decades, bringing a journalistic penchant for investigation and constant questioning to their coverage of philanthropy. Many of these outlets have recurring series on topics like “philanthropy and democracy”. 

And when philanthropy makes it to the proverbial front page of the mainstream media, it is often a story about critiques of giving. In 2000, Felicity Barringer of The New York Times identified “the four horsemen of nonprofit coverage – charity balls, big gifts, soft features about worthy programs and, of course, scandal.” Today, the fourth topic is still a popular focus, and the coverage of the other three often includes questions about their actual impact. This does not mean there is more bad behaviour and unaccountable elite control in philanthropy today, just that it is easier now to learn about and debate that behaviour and control. 

While all this increased scrutiny and critique is, again, essential, we also need to be careful. We need to avoid throwing the baby out with the bathwater. 

“We have to have meaningful, open, informed conversations about what we want the role of philanthropy to be, and what philanthropy ‘at its best’ looks like.”

Some current critiques, for instance, move too easily from concerns about the most elite – or the most egregiously unethical – expressions of philanthropy, to foundational condemnations of the entire institution and practice of philanthropy. They slip too easily from judgments of big philanthropy to judgments of all philanthropy. This simplistic stance threatens to undermine the significant historical and social role philanthropy can, has, and should play in our democracy. 

Organised philanthropy, done well, can have a dramatic and even inclusive impact in communities.

It can embrace our highest ideals of democratic decision-making and community-shaped responses to collective challenges. But to reach this aspiration, we have to have meaningful, open, informed conversations about what we want the role of philanthropy to be, and what philanthropy “at its best” looks like. 

As this trend toward increasing critique of philanthropy continues, we would hope not for less critique, but for better critique. This means critique that is: 

• informed by research and based on deep knowledge about philanthropy in all its diverse expressions, elite and non-elite;
• complex and nuanced enough to foster critical discussion about philanthropy’s distinctive and legitimate role;
• open to evidence that both donors’ motives and the consequences of giving are rarely black and white; and
• constructive and focused on making philanthropy better for all involved, more a tool to fight injustice than a means of expressing injustice.

Good critique is a calling in, not a calling out. And in a democratic society, all people should be called in to the conversation about institutions that affect their lives and societies as much as philanthropy does. If this is where the current trend toward greater critique of philanthropy leads us, it will be worth the often difficult debate.

This article was originally published as part of 11 Trends in Philanthropy for 2020, produced by the Dorothy A. Johnson Center for Philanthropy.