Toxic Philanthropy? The Spirit of Giving While Taking

Yves here. Homer had this figured out long ago: “Beware of Greeks bearing gifts.” But the press has done a great job of presenting squillionaires trying to remake society along their preferred lines as disinterested philanthropy.

By Lynn Parramore, Senior Research Analyst, the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

America’s new “philanthrocapitalists” are enabling social problems rather than solving them

A new breed of wealthy do-gooders armed with apps and PowerPoints claim they want to change the world. But with their market-oriented values and often-shortsighted prescriptions, are really they going to change it for the better?

Or change it at all?

Anand Giridharadas, who has traveled first-class in the rarefied realm of 21st-century “philanthrocapitalists,” harbors serious doubts. In his acclaimed book, “Winners Take All: The Elite Charade of Changing the World,” the business reporter and former McKinsey consultant exposes the willful blindness of bright-eyed social entrepreneurs and TED-talking executives who, having drunk their own late-stage capitalist Kool-Aid, are now ready to serve us all. Compliments of the house.

Doing Good, Masking Bad

British novelist Anthony Trollope once observed, “I have sometimes thought that there is no being so venomous, so bloodthirsty as a professed philanthropist.”

Legendary short seller Jim Chanos, who teaches business students to spot fraud, understands why: when he scrutinizes a company for signs of shady activity, one of the things he looks for is an uptick in philanthropy— a strategy business ethics professor Marianne Jennings has named as one of the “seven signs of ethical collapse” in organizations. Chanos refers to the ruse as “doing good to mask doing bad.”

Such cynical public relations gambits are familiar enough to New Yorkers using Citi Bike, the public-private bike share system funded by Citigroup, whose misdeeds helped spark the global financial crisis of 2007-8. Or visitors to the Sackler Gallery at the Metropolitan Museum of Art, named for the family whose members own Purdue, the pharmaceutical company that fueled America’s opioid crisis through deceptive marketing of the addictive painkiller OxyContin.

But another sort of deep-pocketed philanthropist is harder to pin down. The harm she causes seems less direct; her motives more lofty. This type is fond of touting “win-win” solutions to social problems and tossing out terms like “impactful” and “scalable” and “paradigm-shifting” —the kind of lingo fed to business school students in lieu of critical thinking. Members of this group nevertheless refer to themselves as “thought leaders.”

These would-be benefactors of humanity tend to like former president Bill Clinton, whose Clinton Global Initiative became the ultimate road show for eager converts to what Giridharadas calls the faith of “win-winnerism,” i.e. “I’m doing great in this racket, and so can you.” Inhabiting Silicon Valley start-ups, venture capital firms, think tanks, and consulting companies in large metropolitan areas, philanthrocapitalists speak reverently of global poverty, but rarely touch down in places like Appalachia or rural Mississippi.

They are people like John Mackey, the chief executive of Whole Foods Market, whose book “Conscious Capitalism” is the bible for those aspiring to the win-win faith. In his formulation, CEOs are not simply the heads of companies, but transcendent beings that find “great joy and beauty in their work, and in the opportunity to serve, lead, and help shape a better future.” Mackey’s philosophy is one in which the beneficiaries of commerce should dedicate themselves to social improvement because they are obviously the best equipped to do the job. The public is meant to humbly follow.

This last bit, as Giridharadas shrewdly points out, may be far more radical than the old trickle-down philosophy of yesterday’s winners, who lobbied the government to get out of their way so that the bounteous by-products of their cutthroat activities could descend unimpeded to the poor. The new winners want something even more audacious: to replace the role of government as guardian of the common good.

Giridharadas presents searching conversations with well-educated, often well-meaning people floating above and apart from the lives of ordinary Americans, wishing to ease their consciences but failing both to clearly see the problems of society and to notice, for more than a nagging moment, the ways in which their own lives are financed by the fruits of injustice. They end up embracing a warm-and-fuzzy vision of changing the world that leaves brutal underlying structures securely in place.

The author has said what few who have traveled in this world have said plainly, lest their passport be revoked: the efforts of philanthrocapitalists are largely disruptive, rather than beneficial, to public life.

You can see it in the kind of ideas they embrace. Lecture slots at Davos don’t get doled out for discussing the need to expand popular, time-tested programs like Social Security and Medicare that are proven to reduce poverty and economic inequality. Such sensible fare is not nearly “innovative” or exotic enough—and besides, it might require the wealthy to pay additional taxes. Better are schemes like universal basic income that tend to favor elite interests (such as continuing to pay workers inadequate wages) or creating technological solutions like the one offered in the book by a young win-winnerist: an app that charges workers to manage the unpredictable cash flow caused by erratic work schedules.

And what of campaigning to outlaw the exploitative business practice that causes the problem in the first place? Notsomuch.

Talking about victims plays well on the philanthrocapitalist circuit, but pointing out perpetrators is largely forbidden. You can wow the crowd by peddling for-profit schemes to help the poor, but you won’t get the same applause by calling to jail criminal executives. Yet, as Giridharadas makes clear, even the fanciest app will not erase the feeling among ordinary people that the system has been captured by a small group of the rich and powerful—a feeling that drives them away in disgust from establishment politics and makes them very angry indeed.

What the philanthrocapitalist has a hard time admitting is that meaningful structural change involves a lot more than an app and a PowerPoint. It means taking on financialized corporations that engage in stock market manipulation to enrich shareholders rather than investing in workers and products that are actually useful to human beings. It requires fixing a regressive tax system in which the wealthy pay less on their investments than working people pay on their earned income. It means empowering workers and taking on the coercive hierarchies of wealth and power that are locking into place a dual economy where the affluent become so removed from the struggles of the majority that they hardly speak the same language.

Antidemocratic and unaccountable, the new philanthropists emerge in Giridharadas’s cautionary book less as the solvers of social problems than the deluded enablers. The emperor may stand there in his organic underpants waving a pie chart, but in the court of public opinion, it is increasingly obvious that he’s not in the least interested in dismantling his own palace.

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41 comments

  1. The Rev Kev

    Now, now, now – I won’t hear a word against our new philanthrocapitalists. They are true humanitarians who only want to serve man. They even have a book on the subject.

    Reply
    1. RGHicks

      True confessions… I grew up in what would have been considered a wealthy family back in the 1970s. As a young girl and teenager in the late 70s and early 80s, I would help my mother with some of her benefit work. She would help host these events for various causes and try to obtain door prizes and the like for contributors. I remember one weekend, we spent quality time gluing inexpensive stones to necklaces in our dining room. These were the “door prizes” worth about $1 a pop.

      Various circumstances moved me down the economic ladder and by 2010, I was truly part of the vanishing middle class. The memories I had of charity shindigs at country clubs were stuck in the early 80s mentality of the $1.00 door prizes we glued together at home.

      That year, I was asked to photograph a large benefit for people who couldn’t afford to furnish their homes. The charity collected lightly used furnishings and gave them to needy families. The concept was essentially a decent one. But the charity event itself was such a bedazzling example of excess, that it blew my memories of those $1 door prizes to smithereens.

      These prizes included cruises and trips to Europe. People were bidding on high-end furnishings with hand painted faux finishes. They had been arranged in furnished “rooms” in a grand ballroom all with their own special themes like “Mad Men”. The artists donated the pieces and the wealthy donors bid on them. All in all, the cost of the shindig and the prizes probably far exceeded the money actually raised for the charity.

      For me, it was a wakeup call. Wealthy wasn’t what I remembered it to be. It had become a pit of excess far beyond anything I imagined. My mother would have been horrified that so much of the money being raised was going to the entertainment and not the charity. Although she believed that donors should have a good time at such events, this type of excess would have been a non-starter. The point was to raise money for a cause. Although having a good time was always part of the plan, spending a small fortune to do so wasn’t.

      All through that night, there was one burning issue that kept haunting me: If only these wealthy people would pay their employees a living wage, the needy people this massive event was supposed to be helping, would be able to afford their own furnishings – and a decent roof over their heads as well. The charity itself would be unnecessary. A decent salary would give these lower-income families the financial tools to help themselves. The entire event solidified in my mind that as a society, we had lost our way.

      When do charities and good causes cross the line to become more about the donors than the beneficiaries? I don’t know, but we passed GO on that a long way back.

      Reply
  2. rusti

    They end up embracing a warm-and-fuzzy vision of changing the world that leaves brutal underlying structures securely in place.

    I don’t have the book in front of me, but I recall that David Graeber wrote in “Debt: The First 5000 years” that charity is a way of preserving hierarchy. This strikes me as more and more insightful with time.

    Reply
  3. Anonymous

    I’m going to post this anonymously because I have an example I’d like to share.

    I had a couple of interviews once for a position at the Climate Reality Project, Al Gore’s NGO that is dedicated to convincing the public that climate change is real.

    This is an NGO that was created by a politician around a rather political issue. In other words, he was not outside of his wheelhouse, and out of all of the examples of these philanthrocapitalists (he doesn’t quite fall into this category because he’s neither a capitalist nor a philanthropist, but he is a celebrity that has started an NGO, so we can bunch him in the same group for the sake of analysis), one would think that he would be one of the best equipped to do good deeds for the cause he chose. One would think that this would be one of the best-run and most “impactful” NGOs in its space, a shining example of good the “winners” can create in this world. One would think that someone who spent years in Congress and served as Vice President for 8 years would be very qualified to run an NGO.

    The people that interviewed me were very earnest, smart, and talented people, but the organization is clearly yet another example of what happens when one of the “winners” thinks he can tackle one of the world’s great problems, even one that he has a lot of background in. He and the organization’s leaders he chose clearly have no idea what they are doing. If you go onto their website and look at their “initiatives” and “past initiatives,” it’s downright depressing. Out of the six past initiatives listed on their website, one is “The Guitar of Reality,” where Jack Johnson went on a tour educating concertgoers about climate change. Some of the others are even worse. Of the eight current initiatives, one referred to the chapters of the organization, another to his movie, another to “24 hours of reality” (where the National Geographic channel once a year devotes a whole day to programming on climate change), two others are simply petitions, etc. This is the result of over 10 million dollars in revenue and a CEO that takes home $333,000. When I spoke to someone high up at one of the largest environmental NGOs about the Climate Reality Project, she said that she wasn’t even aware of what they were doing.

    So if Al Gore can’t even make an NGO effective at educating the public on climate change, I don’t trust any of these philanthrocapitalists to be able to do a whole lot of good for the amount of money they are spending.

    Reply
    1. ambrit

      It sort of fits when you consider that Al Gore was one of the founders of the Democratic Leadership Council. The DLC was arguably the institution responsible for the wholesale shifting of the Democrat Party ‘focus’ to neo-liberalism. In essence the DLC shepherded the Democrat Party’s nomenklatura away from practical politics and toward ideologically guided, top down control style politics. I view Gore and his fellow travelers as heavy on faith and light on works. Your example reinforces that view.
      DLC: https://en.wikipedia.org/wiki/Democratic_Leadership_Council

      Reply
    2. Ignacio

      What this shows, so clearly should I said, is that Politicians are just PR guys. They will never come with solutions/initiatives apart from concerts, TV shows, books blah, blah,blah. This is very important because inititives on climate change must come from the social tissue and then, figth their way up in the hyerarchy.

      Reply
      1. Stillfeelinthebern

        oops meant to say his house is NOT completely sustainable. IN other words an alternative energy demonstration project.

        Reply
        1. The Rev Kev

          Someone did a comparison with the house that Al Gore built and the one that George W. Bush built. Wish I had a copy of it. The article described how Bush’s place was built on the best sustainability principles that would make any ecowarrior proud to live in while the one that Gore built was a resource-guzzler that would do credit to an extremist climate change denier. Go figure.

          Reply
        2. Ignacio

          That is a good point. Did his foundation finance any exemplary demonstration project on existing homes of people that could not afford the investment?

          Reply
    3. Kris Alman

      Here’s another good example. The American Diabetes Association.

      A retired endocrinologist, I have wondered why they aren’t helping to organize the fight for affordable insulin. See this Kaiser Health News article. https://khn.org/news/were-fighting-for-our-lives-patients-protest-sky-high-insulin-prices/

      I called the local Portland, Oregon offices. No returned call. I called National ADA today. The woman who (finally) answered my call refused to route my call to someone who works in advocacy. She cited all the technocratic and weak support they muster.

      All you have to do is look at their annual report to figure out why. The ADA is funded by big PhRMA and medical device makers. Their M.D. board members and awardees are on ProPublica’s Dollars for Docs. Big $ go to Drs. Robert Eckel and William Tamborlane.
      http://main.diabetes.org/dorg/PDFs/43724_NEW_FINAL_V1-DIGITAL_UPDATE_11_30.pdf

      Welcome to America®!

      Reply
  4. John

    I love Diane Ravitch’s quote about Bill Gates being the nation’s unelected superintendent.

    I remember when I was in high school, my teachers would always parrot what Bill Gates’s critique of the American school system was. The teachers coddle us too much, the workforce is a really harsh place and no one is going to be nice to you, so you better work really hard, get tough, and suck it up, and then you can succeed.

    As if the guy who went to Lakeside High School and Harvard would have any idea about what normal American kids go through in school and at home. No, the system of funding schools through property taxes so that rich kids go to nice schools and poor kids go to underfunded schools is not the problem with our education system. It’s definitely that helicopter parents in upper middle-class communities are discouraging teachers from being hard enough on the students.

    Bill Gates doesn’t even have a master’s degree in education. What’s his qualification? That he’s a smart guy who went to school when he was a kid? I mean to have such an embarrassingly shallow idea of such a complex topic and to actually get to direct billions of dollars of spending on that issue…it’s frightening.

    Reply
    1. orange cats

      ♥♥♥ This

      Mark Zuckerberg is another pedagogic savant because he went to school.

      Jeff Bezos is starting Montessori schools in low income neighborhoods, which is where all his Amazon warehouse workers live.

      Reply
  5. Thuto

    Timely post. I’ve been thinking about this for the past two weeks since the global who’s who touched down in Johannesburg for the Global Citizen concert celebrating Nelson Mandela’s centenary. Serious star power was on display, from Oprah to Beyonce to the deputy Secretary General of the UN. Justin Trudeau, on behalf of Canada, pledged $50m over twitter to add to the $6bn pledged that day to continue “building on Madiba’s legacy”.

    Speech after speech laid bare to those gathered at the FNB stadium, and millions more tuned in via live broadcast to 180 countries, the intractable problems facing Africa and humanity today. But as poignantly pointed out in the post, no mention was made of dismantling the underlying structures that give rise to these problems in the first place because that would require wrestling with some piercing inconvenient truths.

    Reply
    1. johnnygl

      Next you’re going to tell me that these guys aren’t ‘innovative’ enough to see the value of nationalizing the mines!!! :)

      Maybe that’s a bit too ‘disruptive’?!?! Funny how everyone’s supposed to take risks, except for capital, itself!!! Nope, they need nice, predictable cash flows to skim from. Risk gets offloaded onto the lower orders who get apps to help them manage that risk (another opportunity to skim).

      Reply
      1. Thuto

        Lol while they may not see value in nationalizing mines capital has “their man” as the jockey riding the prized horse that is the SA presidency so they are going to be privatizing that’s for sure. Our president Cyril Ramaphosa is married to the sister of the billionaire mining magnate Patrice Motsepe (the guy whose “foundation” brought us the Global Citizen concert), whose other sister is married to the minister of energy, who is sanctioning moves to sell (cashflow generating) assets of our state owned power utility to said billionaire so you can bet the “predictable cashflows to skim from” will be getting ramped up rather nicely :)

        Reply
          1. Thuto

            I think by now we should all know that all ruling elites are cut from the same cloth, regardless of geography and demographics. even the liberators/freedom-fighters/revolutionaries eventually catch on that to join and stay in the ranks of the ruling class you must become an oppressor yourself

            Reply
  6. Bill Michtom

    from phil- “loving” (see philo-) + anthropos “mankind”

    If I give you $5 to get a meal or get on mass transit, I’m NOT a philanthropist. If I exploit thousands of people & accumlate billions, then give $1 million to feed people, I AM one?

    Reply
    1. Michael Fiorillo

      Continuing with word-derivations in mind, this former public school teacher, who spent twenty years fighting and trying to expose so-called education reform (in reality, an effort to privatize the schools), always used the word “Malanthropy” – the use of tax subsidies to advance your financial and political interests, while posing as a reformer – to describe what these people do.

      Reply
  7. Bugs Bunny

    Philanthropy is just business as usual. Look at the recent UN compact on migrants – Bloomberg and other squillionaires are all over it (AirB&B and Lyft??).

    There’s a neoliberal wish list sewn into the text. Of the 23 objectives, a few caught my eye:

    Ensure that all migrants have proof of legal identity and adequate documentation – opportunity for big data here…

    Facilitate fair and ethical recruitment and safeguard conditions that ensure decent work – compliant and low cost work force, anyone?

    Manage borders in an integrated, secure and coordinated manner – a big IT consultant can help with this.

    Provide access to basic services for migrants – AirB&B must be looking for government contracts.

    Invest in skills development and facilitate mutual recognition of skills, qualifications and competences – ATOS must have a bid in already.

    Promote faster, safer and cheaper transfer of remittances and foster financial inclusion of migrants more contracts for IT consulting and accounting firms?

    Establish mechanisms for the portability of social security entitlements and earned benefits sounds like more IT.

    The whole thing is here.

    Reply
  8. Brooklin Bridge

    Fits in nicely with empire collapse. I’m hardly an expert, or even an an arm chair student, or anything at all other than old enough to have caught phrases here and there from the somewhat rare in my family religious events I grew up in – where I would sing for a quarter a session at the church of my parents branch of Protestantism and bet with my fellow cherubs on which kid would faint first from standing for hours in the choir on Christmas Eve, but isn’t this all part of the “end times” as prophetically envisioned in the book of, “We’re Screwed?” Beware of false prophets and all that?

    Reply
  9. Michael

    My wife uses Charity Navigator to vett orgs that we donate to. The salaries to the top people are outrageous in so many cases. Just a well paying job with bennies to the well connected. Other interesting data points are the amount of govt funding the org receives and the amount of their “endowment” that doesn’t get spent.

    So many successful sounding orgs have fallen off our list over the years, names you know like family. We give mostly to local names we can trust and verify.

    Along with retirement funds and other tax deferred accounts, way too much money is squirreled away beyond reach doing “god’s work” instead of benefiting the average citizen who earned it.

    Reply
    1. The Rev Kev

      There was one very well know clothes collection charity in Australia back in the 90s and you would see their donation bins everywhere. They had a lot of community support. But then people found out that the bulk majority of clothing were going to a factory that turned them into industrial rags with about 1% of the profits of the industrial rags sold going back to that charity for their work. It soured a lot of people on charities back then.

      Reply
    2. Bobby Gladd

      Yeah.

      I use GuideStar. I spend a good bit of episodic time scrolling through 990s. Some of the Compensation sections make you go ‘WTF?’ e.g., look up “Wounded Warrior Project.”

      Reply
  10. Enrico Malatesta

    The blueprint for this element of social engineering is the 80 year Ford Foundation, that has served as the Front for a lot of US Gov’t ‘social engineering’. A check of one of the Ford Foundation’s offspring, Timothy Geithner, shows that Tim’s dad and Barack’s mom had both worked for USAID, and collaborated in Indonesia in the early 80’s – small world….

    Reply
  11. Newton Finn

    “(Meaningful structural change) means empowering workers and taking on the coercive hierarchies of wealth and power that are locking into place a dual economy where the affluent become so removed from the struggles of the majority that they hardly speak the same language.” Yes, but do we fully understand these coercive hierarchies of wealth and power? I mean, do we REALLY appreciate what we may be up against? For those of any spiritual inclination, including wholly secular but deeply-humanist brothers and sisters, here’s food for thought:

    https://www.plough.com/en/topics/justice/social-justice/powers-and-principalities

    Reply
    1. Stanley Dundee

      Thanks, Newton Finn, for suggesting a fascinating essay. This quote from William Stringfellow in 1963 is well worth pondering for those who feel that the root of our troubles in the West is spiritual malaise:

      The monstrous American heresy is in thinking that the whole drama of history takes place between God and humanity. But the truth, biblically and theologically and empirically, is quite otherwise: The drama of this history takes place amongst God and humanity and the principalities and powers, the great institutions and ideologies active in the world. It is the corruption and shallowness of humanism which beguiles Jew or Christian into believing that human beings are masters of institution or ideology. Or to put it differently, racism is not an evil in human hearts or minds; racism is a principality, a demonic power, a representative image, an embodiment of death over which human beings have little or no control, but which works its awful influence in their lives.

      Brings to my mind the basis for the success of Hezbollah in their resistance to Israel.

      Reply
  12. rob

    I believe the actual “blueprint” is the peabody foundation.
    Now since george peabody and co was incorporated in 1788 in england. It later became JP Morgan and co. And all the JP morgan CO’s which a hundred years ago numbered at about 200 ,globally. And in themselves acoounted for 1/6 of the US GDP..
    But after that we had the carnegie foundation, then the rockefeller foundations.. and ford. and all the others… And in the past century, these foundations, given their tax exempt status. Meaning that if they “donate” 1% of their funds annually, can retain their tax exempt status. These foundations fund the think tanks that dictate our cultural opinions, fund our academic endowments who have taught the children for the past couple of hundred years.What we are is a result of the propaganda they underwrote with their academic endowments, known through the orifice of their owned media , in every form.
    In the 1950’s there were congressional investigations into the power of foundations, and their effect on society. Guess what, the media didn’t cover it.
    Now we see things like warren buffet giving his fortune to the gates foundation.. I just see that as a way for him to protect 65 billion dollars of his money from estate taxes. My guess in the fine details, his posterity will retain some control over that money for generations to come.
    Like when the levin family foundation was caught coming up with the 1% they needed to donate by employing children and family members(giving them spending money), and funding symphonies and museums in their local cities, so they could go…. and have their names on the plaques… and still enjoying the use of their money, more than they would have been able to keep were it taxed by the IRS…..
    Most big dollar philanthropies are ways to actually keep more money, and have the power associated by being “philanthropists”. It is about keeping your money. If it has all been donated, yet you have the right to get paid from the funds, which may pay for all your housing,transportation, travel,etc… all tax free.. in the generations to come…… these people aren’t like the poor who actually give some of the money they earn and actually relinquish control over in the process….. It is just a power track to control.

    Reply
  13. F.Korning

    In the UK charity has become an industry. Whereas the public purse used to be devoted to social intervention areas, with public accountability and controls (cynics should see what it’s like in private hands), there is an entire class of parasitic pseudo goodwill foundations and trusts where the vast porttion of monies get diverted into management fees raher than actual aid. Worse still, the popularity of and the agenda of which is not set by the electorate or by common design, but rather by polarised single-issue campaigns, pet malaises, and people voting with their wallets. Now a naive interpretation would see this as a victory for allocation of capital, but in reality that’s not so. Social aid and welfare is by defintion working in areas oftentime overlooked, and needs are not obvious to the public at large. It’s not a beauty pageant – teh tragedy of teh commons means popularity is not a good enough metric of real allocation needs. We probably do not need 30 or so animal welfare groups, but need more para-medical aid for the elderly. We can do without singleton fundraisers like yet another 5k run for an obscure condition, but could do with more permanent allocation to cleaning up rivers and reintroducing fish and wildlife. The toris are experts are divesting theselves of essential remits, leaving it to the jungle of the philantropic world to fill in the gaps they leave behind. In absolving themselves from managing these issues, they achieve 2 fundamental ne-liberal goals: (1) increase precarity and pressure on the plebes, and (2) capture the charity industry, pervert the agenda, and turn it into a pork subsidy or public thievery engine.

    Reply
  14. Michah

    I smile when I read about those others that keep reminding and harping that “we” westerners raped and sacked Africa. So now, we the great great great grand-children, we have to pay for that, donate some money… and, that is what’s going to make it better. Even if it’s true, that we had evil ancestors, that doesn’t make us gullible nor stupid.
    Education is the only answer, here, there and everywhere, and then people need to learn to figure out a way to help themselves.

    Reply
    1. makedoanmend

      “…people need to learn to figure out a way to help themselves.”

      Help themselves like Westerners violently helped themselves to the wealth, including the very people, of Africa?

      And that today’s Western economies didn’t benefit from the loot stolen from Africa in days of yore – that the natural capital of Africa from the past didn’t provide the foundation for today’s capital?

      It’s so convenient to make the past a alien land, so to speak.

      Reply

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