‘Charity’, suggested British Prime Minister Clement Attlee, ‘is a cold grey loveless thing.  If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim.’

His criticism anticipates a contemporary debate about large foundations supported by prominent donors.  At a time of global pandemic, should we praise wealthy benefactors for offering assistance, or question their motives and influence?

‘We can’t leave it to billionaires like Bezos and Bloomberg to solve the world’s problems’ suggested a recent headline in the UK Guardian.  ‘It’s up to government to tax and spend for the good of us all, argued columnist Simon Jenkins, ‘and not the mega-rich seeking a warm glow.’

These are familiar sentiments in the modern debate about philanthropy.  In the gilded late nineteenth century, American wealth created billionaire giving.  Huge fortunes were amassed by business tycoons and then turned in part to public benefit.  Andrew Carnegie busted unions and held down wages in his rail and steel enterprises to accumulate staggering wealth, before funding 3,000 public libraries and museums across America and the globe. 

In old age Carnegie published firm views on philanthropy, including ‘The Gospel of Wealth’.  He acknowledged the huge disparities in wealth now evident across the United States.  The answer, Carnegie suggested, should be philanthropy by the wealthy.  Instead of hoarding their wealth and bequeathing it to family, the philanthropist should give generously though their lifetime, and so help offset the disparity within an industrial society.

‘The man who dies thus rich dies disgraced’ concluded Carnegie, a billionaire who supported estate taxes to encourage giving while alive. 

Many American billionaires followed Carnegie’s lead.  Foundations honouring the Ford family, Melinda and Bill Gates, William and Flora Hewlett and countless others have become important parts of American philanthropy.  Most are overtly non-political, funding the arts or medical research, but some use their wealth to pursue partisan objectives, such as conservative causes supported by the Koch brothers. 

As David Callahan writes in The Givers (2017), ‘today’s new philanthropy is exciting and inspiring.  In other ways, it’s scary and feels profoundly undemocratic.’

The result, suggests a stinging recent critique, is an enduring American deal: let me to get rich now, using whatever it takes, and I will become generous when sufficiently wealthy.  For Anand Giridharadas, author of Winners Take All (2019), the Carnegie model undermines social provision through government – a belief that philanthropy, not labour laws or social welfare, will best help the poor.  Giridharadas sees the same pattern in the claims of contemporary tech entrepreneurs, who use their immense fortunes to dabble in policy problems which catch their eye. 

In patterns of giving and the narrative of billionaire donors, Giridharadas see an assault on the implicit division of labour between public and private provision.  Like Attlee, Giridharadas suggests philanthropy is necessary only because social provision is lacking; an American state which allows the wealthy to escape taxation no longer has the capacity to help those in need.  He portrays foundations as driven by self-interest, led with donors who buy respectability.  

Yet even those who favour a high level of government investment to address disadvantage, and embrace the responsibility of every citizen to pay their taxes, know government often fails to mobilise sufficient public and private resources to ameliorate the lottery of life. 

Charity might not be ideal, but in a world of limited states it matters that wealthy individuals and organisations address the consequences of inequality.  Best they not be required, but better they exist than leave people destitute.

Amid COVID-19, billionaire foundations have made a contribution.  Bill Gates anticipated the dangers of pandemic and tried hard to alert politicians.  When they failed to listen, Gates joined with others to fund the Coalition for Epidemic Preparedness Innovations.  If the world eventually lands a vaccine that can protect health workers, the poor and those most at risk, it will happen because CEPI demonstrated considerable judgement when states did not.

This is no accident.  The best foundations find out what works through systematic trial and error, improving through experience.  They view problems through quantitative lens, apply commercial incentives or political lobbying depending on circumstances.

Thus the Betty and Gordon Moore Foundation in Palo Alto deploys sophisticated data analysis to reduce erroneous dispensing of drugs, and so improve patient care in hospitals.  The Pew Charitable Trusts in Washington has invested for more than a decade in penal reform, working systematically with local politicians for more humane prison systems and prisoner access to proper medical care.  The Edna McConnell Clark Foundation in New York has long funded programs to provide economically challenged families with better child care and schooling, believing an early start is the best chance for a fulfilled life.

Each of these foundations has its origins in a commercial fortune – from Intel, Sun Oil and Avon products respectively.  Yet as Stanford Professor Rob Reich argues in Just Giving (2019), philanthropy does work that governments avoid.  A determined foundation will challenge conventional wisdom about social problems, demonstrate new policy possibilities.  A coalition of foundations in the United States fund The Marshall Project, which draws urgent attention to problems in the criminal justice system, particularly for African-Americans.  The Field Foundation in Illinois tackles the interplay of racial prejudice and gun violence.  These are tough issues, easily ignored.  Financial support by foundations keeps the policy debate alive.

In a world where government often fail, foundations provide another path – insufficient and self-serving often, but weighty nonetheless.  With a corpus of US $42.3 billion, the Bill and Melinda Gates Foundation can combat HIV/AIDS and malaria, aspirations beyond the reach or imagination of many national governments. 

COVID-19 raises a challenging question: if charity is cold, grey and loveless, how do we describe democratic states that cannot protect citizens from hazard?  Billionaire philanthropy is not an attractive alternative to failed states, but this crisis compels us to ask why governments fail at some basic tasks, and what better might look like.  Whatever their many faults, philanthropy offers another way to approach equity, knowledge and community empowerment amid plague. 

Biography

Glyn Davis is Distinguished Professor of Public Policy at the Australian National University, and CEO of the Paul Ramsay Foundation.

The feature image: photograph by Sian Supski and art by Jenny McCraken. Sian’s photography features in a photo essay in this series.