Transformation: Opinion

What can we learn from thirty articles on philanthropy and social change?

Reforming today’s institutions won’t be enough to support the transformations of the future.

Michael Edwards
27 September 2020, 5.17pm
Flickr/Pictures of Money. CC BY 2.0.

Is money a curse or a cure in relation to injustice, exploitation, environmental degradation and inequality? Most likely it’s both, depending on how it’s generated, accumulated, shared and spent. Energy, commitment, organization and moral courage are ultimately more important in the struggle for social change, but sooner or later money enters the picture when things have to be paid for that are important for success (like the website where you’re reading this). Therefore, the structure of the funding system is a crucial issue for those of us who are pushing for radical changes in society.

Money: in terms of social change, it’s both ‘beauty and the beast,’ by Michael Edwards

Can money be a force for good? By Fran Boait

Is social justice fundraising an oxymoron? By Kim Klein

It’s time to put money out of misery, by Michael Edwards

The problem is that the current system isn’t geared to supporting many of the things that must be done, or supporting them in ways that make success more likely i.e. reliably, for the long term and with no strings attached. Increasingly, its structure reflects the inequalities that shape society at large, and which condition the supply of money for different causes and different kinds of action. In the past, small-scale giving by large numbers of people was critical (and of course it still exists), but today that supply is increasingly concentrated in a smaller number of hands – whether in public funding agencies, private foundations, 'donor-advised funds,' vehicles for ‘social investment,’ or super-wealthy individuals.

In that sense, the system replicates the problems of the broken and unjust economy that supplies it with resources, like large-scale extraction and tax-dodging, concentrated power and influence, and a refusal to finance system-changing action. Most of the well-heeled technocrats who operate this system are sincere in their desire to ameliorate injustice, but the range of actions they’re able or willing to support is too restricted to have much impact on deep-rooted social problems and the politics that surround them. In which case, what’s to be done?

Over the past seven years Transformation has published 30 articles on this question which provide a useful range of insights. Some of these pieces propose pragmatic reforms to existing institutions on the grounds that they are achievable in the here and now, and could increase the supply of money to social justice causes significantly: “the only interesting question about foundations is whether I can get money from them to do my work,” as one non-profit leader told me when I worked at the Ford Foundation in New York, "everything else is just noise." We don’t need a new system to reach that goal, we just need to persuade the existing one to give more money to grassroots groups, allow broader participation in decision-making, and reduce the influence of corporate interests.

Nothing about us, without us: reversing the power dynamics of philanthropy by Nadia Van Der Linde

Philanthropic Power erosion: the Edge Fund alternative, by Sophie Pritchard

Transforming philanthropy: it’s time to get serious, by Fatima Van Hattum and Arianne Shaffer

Can philanthropy support the transformation of society? By Peter and Jennifer Buffett

Barbarians at the philanthropic gate: are foundation grants to corporations defensible? By Linsey McGoey

Should funding agencies also share in the sacrifices of social change? By Michael Edwards

As these articles show, it’s perfectly possible to involve those who have lived experience of injustice in decisions over funding so that they have more chance of being relevant and effective - rather than ceding control to elites acting ‘on their behalf.’ Foundations and other funding bodies can be held accountable for their actions by publicizing their links to Wall Street in their investment decisions and how they constitute their boards. Money can be channeled to groups that undertake direct action on social problems instead of giving large grants to the same cohort of non-profit intermediaries year after year. And the culture of accountancy that has spread throughout the funding world can be challenged so that those who actually do the work of social change aren’t restricted by short-termism, red tape and false metrics of success.

Does value-for-money help or hinder the search for social transformation? By Cathy Shutt

Can ‘effective altruism’ really change the world? By Lisa Herzog

Can ‘effective altruism’ change the world? It already has, by Scott Weathers

Nevertheless, if the problems of the funding industry are structural rather than solvable through tweaks around the edges of current practice, reformism isn’t going to get us very far. This is the starting point for a second set of contributions that argue for transformation: the replacement of today’s institutions by others that grow from a radically-different set of principles and assumptions: i.e. that aren’t owned and controlled by oligarchs who have extracted wealth from the rest of us and then protected it from taxation, or run by distant professionals with minimal public accountability, or limited to strategies of social stabilization and ‘equality of opportunity.’

As this school of thought points out, despite their rapid growth foundations and social investment funds don’t appear to be making any difference to the problems they say they want to solve. The most successful societies in terms of equality and well-being (like the social democracies of Europe) encourage private funders but limit their role and influence; while the least successful - the USA - celebrates philanthropy as a cornerstone of social problem-solving. Unfortunately there’s no evidence that this is true, at least above the level of discrete projects and localities.

That’s because of the structural weaknesses of the current funding system: an inbuilt tendency to protect a status quo which allows individuals to accumulate colossal wealth and legitimize it through 'giving back;' and the lack of any real influence over the drivers of social change - things like electing a redistributive government, launching new social movements, and changing popular culture. In any case, liberal and conservative elements in this system often cancel out each-other’s efforts, as George Soros battles away with the Koch brothers through their respective foundations. Rejoicing in the fact that ‘we have billionaires on our side too’ isn’t a satisfactory answer to the corroding effects of concentrated money on democracy and equality. In addition, wealthy institutions never give up their position voluntarily, so the prospects for reforms that actually alter the balance of power are remote.

Can philanthropy ever reduce inequality? By Erica Kohl-Arenas

The privilege of being privileged, by Michael Edwards

Why should Bill Gates decide how our children should be educated? By Megan Tompkins-Stange

If the MacArthur Foundation wants a low-carbon economy, why is it investing in fossil fuels? By Fatima Van Hattum and Arianne Shaffer

Why it’s time to say goodbye to ‘doing good and doing well,’ by Michael Edwards

There’s no need to reject the reformist route if it can get more resources to those at the sharp end of injustice, but there is a need to add more transformational solutions that will do what the current system will never do, by building funding institutions that are owned and directed by the broad mass of the public. Instead of focusing so much energy and attention on ‘giving back’ from a broken system, why not encourage more ‘giving forward’ to create something new? That could mean small-scale innovations like ‘pay-it-forward’ fundraising and giving circles where everyone shares in the allocation of resources; medium-scale experiments like localized financial institutions that are rooted in and governed by members of the community; and large-scale efforts to equalize everyone’s potential to make charitable contributions, backed up by a Universal Basic Income.

Could giving circles rebuild philanthropy from the bottom up? By Angela Eikenberry

Funding transformation, by Niamh McRae and Fergal Finnegan

Are we losing our love of life? It must be the money, by Rajiv Khanna

Forget billionaires: let’s build our system to fund the transformation of society, by Michael Edwards

#Shiftthepower: from hashtag to reality, by Jenny Hodgson and Barry Knight

The problem is that building alternative funding institutions like these requires much bigger changes in economic and financial systems to de-link wealth-creation from wealth-extraction and spread resources right across the population. That’s the only way to establish the preconditions in which new alternatives can grow to scale and flourish, based on equality and democracy instead of oligarchy and elite control, and helping to prevent the colonization of philanthropy by the same forces that produce the problems in the first place. Wealth taxes and other instruments of fiscal policy, a mass redistribution of income, the growth of the sharing economy and new economic models based around co-operatives and co-production are all ways of securing a different financial base from which new models of giving can evolve.

Money, debt and the end of the growth imperative, by Thomas Greco

The conflict at the heart of modern money, by Matthew Slater

Transforming finance could help to solve the biggest problems of society, by Chris Hewett

It’s time to put the power of sharing back into the sharing economy, by Adam Parsons

Seven ways to build the solidarity economy, by Emily Kawano

Why transforming the economy begins and ends with cooperation, by Esteban Kelly

Getting to the heart of Universal Basic Income, by Conrad Shaw

Money is a central fact of our existence and it isn’t going to disappear. All of us need financial security to care for ourselves and our families, and to share with others whose work we value and want to support. But because wealth and power have become so concentrated, pretty much the whole of life has become a struggle against the corrupting influence of money on democracy and human flourishing. There is no answer to those problems through accumulating yet more money in the hands of the few and increasing their influence still further, even if their motivations are ‘philanthropic.’ We can and should do better.

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