Linsey McGoey’s book provides a timely and urgent call to hold foundations and philanthropists accountable as they channel large sums of private funds to public services. As the US philanthropic landscape continues to mushroom with thousands of foundations each year – McGoey notes nearly half of America’s 85,000 foundations were set up in the last 15 years and 5000 new foundations are established each year – the impact of their dollars and their relationship with existing structures of power must be examined.
Who could object to the generosity of the likes of Mark Zuckerberg, the founder of Facebook, and his wife Priscilla Chan, who announced in December 2015 that they would pledge 99% of their wealth, some US$45 billion, to create a new philanthropic foundation? However, the uncritical reception of such acts of generosity by the mainstream media and politicians leads to an easy acceptance of the efficacy of the philanthropists’ gifts and projects. We are coaxed to believe that they offer the most efficient solution to problems unburdened by cumbersome government bureaucracy.
It is precisely such acceptance that McGoey seeks to challenge in her book. For whom do these acts of generosity benefit? Is it the philanthropist or the recipients of the gift? It behooves us to investigate the motives of this new generation of philanthropists, such as Zuckerberg and Bill Gates. These philanthropists have made their fortunes in the tech industry and now seek to exert similar influence in the realms of welfare, development, health, and education, buttressed through the sheer size of their foundations’ endowments. Thus, McGoey challenges us to think critically and conduct future research to demonstrate how philanthropy reinforces existing structural inequalities through the way projects are conceived and implemented, which often undermines the democratic participation of affected stakeholders.
For example, the fact that the Chan Zuckerberg Initiative is registered as a for-profit Limited Liability Corporation raises numerous questions about motives. This legal structure means that there is less transparency in the movement of money from Zuckerberg to the Foundation, and it may also mean fewer tax implications should he ever sell his Facebook shares. In light of such developments, McGoey challenges us to cast a more analytical gaze on the process and the impact of ‘disruptive philanthropy’ (Horvath & Powell forthcoming, p. 4), wherein these new philanthropists do not contribute to enlarging the public good as provided by the state, but seek to offer an alternative to it.
In this pursuit, McGoey sets two broad aims in the introduction: first, to bring a historical perspective to understand today’s philanthrocapitalists, and second, to look at the impact of grant dollars by focusing on the Gates Foundation. With regards to the first aim, McGoey does a fine job showing that many of today’s wealthy young tech entrepreneurs-turned-philanthropists are ahistorical in their approach and understanding of philanthropy. Industrialists of the nineteenth and twentieth centuries, such as John D. Rockefeller, Andrew Carnegie, and Henry Ford, while markedly different in their approach to philanthropy, all benefited from government protection, anti-competitive practices, and lobbying for favourable legal treatment for their often dubious business methods. Their financial success enabled them to adopt and adapt their business strategies in the running of their foundations. While today’s philanthrocapitalists might be trumpeted for being innovative, employing business and entrepreneurial methods in philanthropy, McGoey clearly shows that their methods are not novel but have roots in the industrial era. However, what is truly different about today’s philanthrocapitalists according to McGoey, is their motivation:
The new philanthropists are increasingly proud, triumphant even, about the private economic fortunes to be made through embracing philanthrocapitalism. Not only is it no longer necessary to ‘disguise’ or minimize self-interest, self-interest is championed as the best rationale for helping others. It is not seen as coexisting in tension with altruism, but as a prerequisite for altruism. (p. 20)
In such an environment it becomes clear that there are economic benefits to philanthropic gestures. As McGoey shows, there is no such thing as a free gift in today’s philanthrocapitalism.
McGoey turns her attention in the second half of the book to the Gates Foundation, where she explores whether the act of giving has come at a cost for the recipients of the Foundation’s philanthropic efforts. The second half is weaker in comparison to the first half and suffers from a paucity of solid evidence to demonstrate the flaws and failures of the Gates Foundation. The reader does not get a clear sense of the internal operations of the Foundation that supposedly makes it a behemoth in the philanthropic world; perhaps this is due to the difficulty in gaining research access to the Foundation. Nevertheless, McGoey certainly provides avenues for us to critically reflect on the connection between philanthropy and political power. For example, the Gates Foundation contributed to approximately 10% of the World Health Organization’s (WHO) budget in 2013, more than the United State. Such contributions are indeed generous, but they also invite us to question the type of influence the Gates Foundation might wield in a multilateral agency like the WHO.
What McGoey shows is that philanthrocapitalists like Bill and Melinda Gates – through the sheer size of their grantmaking capacity – are able to dictate the direction of certain areas of health research and development and, in the process, pull scarce resources, such as the time and labour of health researchers, away from other organizations into these areas. The case of polio is most notable in this regard. The Gates’ desire to eradicate polio is admirable, and relatively effective (having assisted in reducing the global rates to less than 400 worldwide in 2014, with Afghanistan and Pakistan the only two polio-endemic countries left in the world), but such a singular focus creates a major attendant issue, namely, that continued attention to polio is disproportionate to the need, diverting resources from other health issues and diseases.
The book shows that today’s foundations and their philanthrocapitalists do not challenge existing power structures. Rather, through their philanthropic work, inequalities and dependencies are reinforced. However, there is a disconnect between her critique of the Foundation and the presentation of the Foundation’s actual practices with regards to international trade agreements on the high cost of prescription drugs and the subsequent impact on the poor in developing countries. Linking Bill Gates’ aggressive protection of intellectual property – due to his time as head of Microsoft – with international trade agreements and patents that prevent the poor from accessing life-saving medication requires more direct evidence. Nonetheless, the fact that national governments such as the UK and foundations like the Gates Foundation have donated millions of dollars to Vodafone (a UK company) to set up M-Pesa, a private mobile phone payment system in East Africa, is certainly outrageous. McGoey rightly questions whether tax-payer dollars should be going to for-profit corporations, which are set to gain financially from the project and yet still avoided paying the UK corporation tax for three years.
What is clear from McGoey’s book is that philanthropy cannot replace the role of government and other civil society stakeholders in the process of development. Philanthropists, both old and new, have rarely had to clarify and establish their legitimacy or accountability to the people they claim to serve. In fact, in trying to set up small schools in Colorado, the Gates Foundation’s top-down approach and lack of consultation with the community led to the programme’s failure and the schools subsequent closure. It is precisely such an approach that challenges the participatory democratic procedures that are critical to sustainable development.
Wealth does not equate with legitimacy or accountability, and it would be a mistake for us to think that the likes of Gates or Zuckerberg are legitimate and more capable actors in delivering public goods simply because of their wealth. Furthermore, McGoey shows with conviction that growing levels of philanthropy increases inequality: charitable donation means less tax revenues that could be spent on redistributive state policies; the vast majority of charitable donations do not provide economic relief for low-income individuals. Ultimately, it should be the state that serves the public good, not philanthropists.
Reference
- Horvath, A. & Powell, W. W. (Forthcoming) ‘Contributory or disruptive: do new forms of Philanthropy Erode Democracy?’, in Philanthropy in Democratic Societies, eds R. Reich, L. Bernholz & C. Cordelli, University of Chicago Press.