The art of giving

Just as Warren and Doris Buffett launch their new philanthropy course for college students, Peter Buffett has spoken out against the ills of charitable giving. Radical grassroots fund Edge Fund casts a critical eye over the conflicted Buffett style of giving.

Edge Fund
1 August 2013

Warren Buffett has just announced he will be working with his sister to teach young people the art of philanthropy. So what might he teach them?

Buffett has continually called for higher taxes for the super-rich. But, as it happens, he also just donated $2.6 billion worth of stock to five charities, which gives us a better idea of the Buffett style of giving. The recipients of this enormous donation were The Bill and Melinda Gates Foundation, Susan Thompson Buffett Foundation, Sherwood Foundation, Howard G Buffett Foundation and the NoVo Foundation. These foundations all have one thing in common. Warren Buffett has a major influence on how they operate. The Susan Thompson Buffett Foundation manages the bulk of his own charitable giving (directed by former son-in-law Allen Greenberg), he’s a trustee of the Bill and Melinda Gates Foundation and the other three foundations were set up by him for his children, which they run.

Although the mega rich are prepared to part with their money, they’re not prepared to let go of their power over it. That’s hardly unexpected behaviour of the elite. But people don't seem to recognise that philanthropy is just another tool exerted by elite power networks, in order to mould the world according to their vision. It is critical to understand how such networks are sustained by the linkages between the super-rich and related foundations.

Both Gates and Buffett are particularly interested in “food security”. The Gates Foundation and Howard G Buffett Foundation have invested heavily in Monsanto’s Water Efficient Maize Project which is supposed to help farmers in Africa increase their yields with drought and heat tolerant corn varieties. Critics claim WEMA serves to benefit Monsanto, not the people, enabling them to push genetically-modified crops into Africa, despite strong resistance against its. Multinational monopolies impose a regime of weakened biodiversity and crop resilience. Many millions of both Gates and Buffett dollars have supported The Alliance for a New Green Revolution in Africa (AGRA), which essentially works to increase African small-scale farmers’ use of fertilisers, pesticides and hybrid seeds. AGRA has been heavily criticised for carrying out its work without consulting or including African people and for ultimately putting control over seeds and food into the hands of corporations.

It all becomes clear when you realise that Gates and the Buffett family are heavily invested in Monsanto and several other large food, beverage and agricultural corporations, serving on the boards of a few of them. Of course, not all charitable giving is as obviously questionable as that of Gates and Buffett. But the worrying trend is that many philanthropists and foundations are unaccountable and unanswerable to the communities their funding affects. Charities sometimes replicate this model, with decisions in the hands of professionals, unrepresentative of the communities they seek to help. Large charities with skilled fundraisers are more able to secure funding which enables them to carry out their projects whether the community wants it or not.

Perhaps Warren Buffett should take a leaf out of his son’s book. Peter Buffett recently caused a stir with his New York Times op-ed, “The Charitable-Industrial Complex”. He criticises acts of charity for not challenging the structures and systems that keep inequality in place - a system, he argues, that destroys lives and communities and creates vast amounts of wealth for the few. Peter Buffett also questions the use of business practices in philanthropy: philanthrocapitalism.

Not surprisingly, this has particularly riled Matthew Bishop, co-author of Philanthrocapitalism: How the Rich can Save the World. Bishop does at least agree that “some of the problems philanthropists are trying to solve were caused by the business activities of other philanthropists”. But at the same time he, and others, question whether the business activities of Warren Buffett and Bill Gates ever did anyone any harm.

Perhaps Bishop is not aware of the reports on Microsoft factory workers’ conditions in China (including recent labour rights violations uncovered at Pegatron factories, which also supply Apple), their aggressive competitive and monopolising practices and the impacts of mining for coltan and other metals and minerals used in the industry? Buffett’s investments include Goldman Sachs, American Express and Wells Fargo. Beyond the direct impact of powerful multinational corporations, who can deny that investment in them is partly what keeps the whole system alive, contributing to financial collapse and the massive increases in inequality and injustice we see today?

We need a new way of organising society where we speak for ourselves, are in control of our own lives and communities and where we all have an equal say. This needs to apply to every corner of society, including the distribution of money and resources. Many foundations around the world, including Red Umbrella Fund, Global Greengrants Fund and Frida Young Feminist Fund, are now providing successful grant-making models that address some of the issues of power and inequality in funding by devolving power to affected communities, as described in the latest report by writer, activist and Philanthrocapitalism critic Michael Edwards.

Peter Buffett might not be ready to accept it, but the equal, just world we strive for is not likely to come about whilst we have an economic and political system that puts corporate power and private gain ahead of all else. We need to think beyond capitalism; a world where philanthropy as it is today won't exist, but where justice and equality has a chance to take its place. But while there are vast funds available to help others and create change, let's make sure it's the people who decide how those funds affect them. 

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