Philanthrocapitalism in denial

Kavita N Ramdas
25 April 2008

The application of business principles to the world of civil society and social change has fashion, wealth, power and celebrity behind it. But where is the evidence that "philanthrocapitalism" works, and are there better ways to achieve urgently needed global social progress?

Kavita N Ramdas is president and chief executive officer at the Global Fund for Women

In thinking about this question, I found the arguments that Michael Edwards makes in his openDemocracy article "Philanthrocapitalism: after the goldrush" (19 March 2008) to be strong and persuasive. They echo growing concerns that I have had about the direction philanthropy is taking in the United States.

The "new venture philanthropy' or "capitalist philanthropy" should be seen as part of the pattern that saw a triumphant western capitalism choosing to assume its undisputed place as "number one" in the world after the fall of the Soviet Union and the demise of socialism or communism as a feasible alternative economic system. Despite many good intentions, this version of philanthropy is all too often beset by a hubristic assumption of its ability to resolve the world's most deep-rooted problems.

In this it becomes enmeshed in two contradictions. The first is that the more unequal and unfair the world gets, the more its people are being invited to celebrate a cherished few who both embody and benefit from this condition - and who have chosen to use some of their almost unfathomable wealth to address "specific" problems with "measurable" outcomes. This reveals that something is missing in their efforts, as in much of the discussion of the new mega-philanthropy: namely, any deeper questioning about what ails a global economic system that produces endemic inequality, crushing poverty, and food insecurity - all of which damage the livelihoods of hundreds of millions of people. The new philanthropy avoids exploring what is wrong at this systemic level - where a single individual's net worth can become larger than the combined GDPs of some of the world's poorest nations.

Also in openDemocracy's debate on philanthrocapitalism:

Michael Edwards, "Philanthrocapitalism: after the goldrush" (19 March 2008)

Gara LaMarche, "Philanthropy for social change" (9 April 2008)

Geoff Mulgan, "The new philanthropy: power, inequality, democracy" (10 April 2008)

Simon Zadek, "Civil society and capitalism: a new landscape" (14 April 2008)

Stewart J Paperin, "Philanthropy's business benefit" (16 April 2008)

Mark Surman, "Philanthropy on the commons" (18 April 2007)

Colin Greer, "Philanthropy as solidarity" (21 April 2008)

Karen Weisblatt, "Individual giving, collective action" (23 April 2008)

Michael Edwards's essay draws on his book - Just Another Emperor: the Myths and Realities of Philanthrocapitalism (Demos/Young Foundation, March 2008)

The second contradiction is that even as the downsides of so-called "development" in the global north become ever clearer (among them unsustainable consumption patterns and lifestyle-related health problems), philanthrocapitalism seeks to bring the wonders of this model of development to those who have no access to it. But as societies and people around the world become more interdependent - a fact that global climate change above all is making clear - it is ever more necessary to question the assumptions that underlie this view that "we" know what is best for "you".

The wrong fix

It is vital to examine the actual effects of this form of "development". As Vandana Shiva has written: "Development deprives the very people it professes to help of their traditional land and means of sustenance, forcing them to survive in an increasingly eroded natural world. The reality is that people do not die for lack of income. They die for lack of access to the wealth of the commons."

Some striking examples internationally include:

* the combination of "free-market" policies and the removal of government subsidies is putting intense pressure on Indian small farmers and peasants, causing them to lose the equivalent of $26 billion dollars annually, and leading to over 5,000 farmer suicides in 2007 alone

* water, an essential resource for life, is now a $400-billion dollar industry controlled mainly by western corporations, who now profit by selling a resource to the poor that was once free

* the approximately $50 billion dollars of "aid" (including private philanthropy) trickling from global north to global south is but a tenth of the $500 billion dollars being sucked out of the global south each year in the form of interest payments on loans and other unjust mechanisms imposed by international financial agencies, including the World Bank and the IMF

These realities notwithstanding, there is little if any evidence that "philanthrocapitalism" is interested in looking at such structural realities, or examining the root causes of current economic or political inequality and injustice. On some level, it might be absurd to expect it to do so. Indeed, many activists and economic analysts - including Nobel laureates Amartya Sen and Joseph Stiglitz - argue that the developing world's most pressing problems could be effectively solved by changing the terms of political and economic power within the current system. Again, Vandana Shiva makes a valid point, that "it may not be about how much wealthy nations and individuals can give, so much as how much less they can take."

The new philanthropy is nowhere near asking this question. It seems motivated by technological solutions, the same "fix-the-problem" mentality that allowed these business people to succeed as hedge-fund managers, capital- market investors, or software-developers. This "philanthropy" is designed to yield measurable and fairly quick solutions. A symptom of this may be found in the kind of skills that new foundations are seeking. I am struck by how few social scientists are employed at the new "mega-philanthropies". Instead, the people required are management consultants, business people, and scientists, who must demonstrate their "expertise" on specific issues - climate change, agricultural productivity, soil quality, or infectious disease. The nuance and inherent humility of the social sciences - willing to be perplexed and to struggle with multifaceted aspects of a problem - has no cachet in the realms of "technocracy".

The seeds of change

Even the complex issue of "gender" has been neatly broken down into specifics - ending maternal mortality, educating girls, increasing the incomes of women. On the board of the Global Fund for Women (GWF), activists from around the world have become wary of the term "invest in women", because they see the language of economic profit appropriating a much richer and multihued landscape relating to women's status and position in their families and communities.

The GWF and similar organisations have worked for years to explain that women's rights live in the murky and unclear intersections between economic inequalities, discriminatory traditional and cultural practices, political and personal lack of power, and violence - in the home, in intimate relationships, and on the streets and battlefields. For this reason, the Global Fund for Women has sought to support women's own articulations of their struggle for justice and equality by working at various levels and within all the structures where women and girls are systematically disempowered. Yet, as we seek to raise funds from new sources, we find ourselves struggling for ways to "sell" our model - even as we hope it can become one that the philanthrocapitalists will emulate!

Many of us working in this field are increasingly concerned by our instinctive tendency to "follow the money". Yet, as Michael Edwards correctly points out, those of us who have been social-justice advocates and activists before we became "professional non-profit leaders" know all too well that it is social movements and their ability to hold both governments and the private sector accountable, that are truly going to change our world (Colin Greer of the New World Foundation echoes this argument in his own article, "Philanthropy as solidarity" [21 April 2008]). So, even as we seek to figure out how to raise next year's budget and which new foundations we will pursue, we simultaneously fill our strategic plans with pledges and commitments to be engaged in movement-building.

A new dialogue

This means a permanent effort to engage in shared debate and discussion and learning, while struggling with the wisdom contained in Audrey Lorde's words: "you cannot use the master's tools to dismantle the master's house". What I would like to see is a new cross-sector partnership emerging, connecting those of us who work in philanthropy with those in the social-benefit sector, in the private sector, and in government. Such a partnership would need to begin with a shared sense that the tools we have been using are simply not enough; and then to demonstrate a collective willingness to unpack what in our efforts has and has not worked under the rubric of "globalisation" and "economic growth" over the past twenty years.

In this effort, the new philanthropists could benefit from listening to and learning from those on the ground who are working in some of the most exciting social-justice movements around the globe. The proposition that business does not, after all, have all the answers, and that the social-benefit sector, particularly people's movements, have much knowledge and substance to share, would be an excellent starting-point for a dialogue (Karen Weisblatt's article, "Individual giving, collective action" [23 April 2008], would also be on the reading-list). From there, we can begin also to re-engage the state and governments, in a conversation based on mutual respect and a genuine willingness to learn from one another.

Naïve? Optimistic? Perhaps, but I suspect it may the only real choice we have left to ensure our shared future as citizens of the earth.

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