Last year, MacKenzie Scott, an award-winning novelist and the former wife of Amazon’s founder Jeff Bezos, donated nearly $6 billion to some 500 organisations in the span of five months. She made headlines for her swift, generous, and unconditional giving. Not only was she giving away wealth faster than anybody else attached to the Giving Pledge – a scheme where billionaires promise to donate the majority of their wealth to philanthropy – but Scott had upended modern philanthropical practices with how she gave. Rather than creating a foundation to manage the redistribution of her wealth, Scott made “unsolicited and unexpected gifts given with full trust and no strings attached” based on the recommendations of a trusted group of advisers. In essence, Scott gave, and then got out of the way.
This sort of hands-off approach isn’t common for large donors. It’s a more traditional form of philanthropy, which, animated by a recognition that wealth production can generate severe inequalities that threaten the basis of democratic governance, aims to give back to the community to help atone for the sins of business. In contrast, the dominant form of philanthropy today, known as venture philanthropy or philanthrocapitalism, does not simply offer compensation for the system’s flaws. It demands conversion to that same system’s philosophy.
Philanthrocapitalism incorporates a deep, ideological commitment to market-based solutions to the world’s problems. The assumption at its core is that the same techniques, management styles, and value systems that enable corporations to amass tremendous wealth can and should be used to correct the world’s social problems. Rather than simply funding third-party initiatives, today’s philanthrocapitalists create and manage ventures based on their own ideas of how to fix the world. They invest rather than give, and fully expect to see a return on their investment. As such they are far more hands-on than Scott has been, and are heavily reliant on metrics and benchmarks to identify impact and scale up successful programmes.
