What if philanthropy isn’t the best way for rich people to help others?

What if philanthropy isn’t the best way for rich people to help others?

By Benjamin Soskis June 30, 2017

On June 16, in a move that shook the grocery industry, Amazon agreed to purchase Whole Foods for $13.7 billion. Yet just a day before, Jeff Bezos, Amazon’s founder (and the owner of The Washington Post), made an announcement that could prove an even greater disruption to a different sector: philanthropy. Bezos’s philanthropic activity has been surprisingly modest, at least relative to his vast wealth; the Whole Foods revelation boosted his net worth and vaulted him into second place in Forbes’s rankings of the world’s billionaires.

But in a tweet, Bezos hinted that he was reassessing his “philanthropy strategy” and asked his more than 222,000 followers for advice on how to implement it. His goal was particularly striking, different from the long-term investments — in The Post and in Amazon, for instance — that had occupied much of his time. For his giving, he sought a “short term” focus. “I want much of my philanthropic activity to be helping people in the here and now . . . at the intersection of urgent need and lasting impact,” he declared. Bezos cited a homeless shelter in Seattle, Mary’s Place, to which Amazon recently granted rent-free space in one of its headquarters buildings, as an example.

For many within the philanthropic sector, which I study, this was crazy talk.

Philanthropists are supposed to pursue “systems change,” long-term impact and the extirpation of root causes. Think, for instance, of Mark Zuckerberg and Priscilla Chan’s $3 billion effort to cure “all disease in our children’s lifetime.” As one philanthropic consultant insisted in an online column in Forbes, short-term giving has never led to lasting social change, and Bezos’s flawed strategy is based on a “longing for instant personal gratification that clouds judgment.” Or as another Forbes writer argued, “The problem with the short-term perspective is that it positions philanthropy as charity rather than a mechanism for shaping a more just, equitable world.”

For at least a millennium, charity — the effort to relieve immediate suffering through almsgiving or corporeal works of mercy — was understood to be the way to use material resources to do good in the world. Yet by the 16th century, as the ranks of the poor grew throughout Europe, many commentators from a rising mercantile elite began to insist upon traditional charity’s inadequacies. By the time modern philanthropy emerged at the turn of the last century in the United States, with large-scale fortunes channeled into private foundations, its champions declared its supremancy over charity.

Whereas charity was wasteful and prompted by sentimental impulses, modern philanthropy would be efficient. Whereas charity tended to symptoms, philanthropy would address root causes. Charity’s imperatives were religious, while philanthropy borrowed its logic from the laboratory and the boardroom. Charity was parochial, while modern philanthropy would turn its attention to regional, national and even global problems. Charity might temporarily improve the condition of the poor, but philanthropy would abolish poverty itself.

That critique has kept much of its power in the present day. Many of the most sophisticated analysts of contemporary philanthropy maintain that it must root its legitimacy in a willingness to take risks and maintain a long-term vision; that is, it must distinguish itself from charity, as well as from government and the private sector.

But Bezos’s tweet is one intimation that charity might be making a comeback. This probably won’t mean that homeless shelters around the nation will soon be flush with money. But it does suggest a mounting challenge to philanthropy’s moral hegemony by a powerful, alternative ethic.

One of the reasons for the possible rehabilitation of charity is especially paradoxical, given philanthropy’s technocratic pretensions. Over the past decade, as groups have become more sophisticated at assessing the impact of their work, and as digital payment systems have advanced throughout the developing world, a number of carefully designed field experiments have affirmed the effectiveness of unconditional cash transfers to the poor. Such charitable transfers challenge assumptions, dating back centuries, that impoverished recipients will squander money given directly to them. It turns out that the poor often know much better than outside experts how to improve their own condition.

A century ago, charity’s “indiscriminate” nature was considered one of its greatest liabilities. Yet cash transfers are effective not because they are radical acts of solidarity but because they address perverse incentives in welfare systems. And though research is not yet available on the long-term effects of direct cash transfers (the charity GiveDirectly has begun a 12-year basic-income study in Kenya that should tell us more), we have enough evidence of positive short-term results — including increased school attendance, improved health measures, and higher savings and investment — to suggest that they might sit “at the intersection of urgent need and lasting impact.” Both the former U.N. secretary-general and the International Rescue Committee have called for shifting toward more cash transfers.

The rising popularity of cash transfers as a humanitarian instrument is linked to another reason behind charity’s resurgence, one for which Bezos and other Internet moguls might harbor a special affinity: the allure of disintermediation. One of the attractions of direct cash transfers, and of the universal basic-income schemes to which they are related, is the way they bypass the philanthropic establishment.

Rooted in Catholic theology, the traditional ethic of charity has placed as much emphasis on the human relationship established between giver and receiver as on the value of the gift itself. Since the Enlightenment, defenders of philanthropy have dismissed that partiality as sentimental and selfish (often with a dash of anti-Catholic sentiment thrown in). Charity’s apologists have responded that while philanthropists might claim to love mankind, they often don’t seem to show much love for man in particular.

The social-media age has brought donors and recipients much closer together, which is why crowdfunding brought in more than $34 billion in 2015, up from around $880 million in 2010. The growth of GoFundMe, specializing in vivid and immediate appeals, suggests as much: The company took five years to raise $1 billion for campaigns on its site, nine months to raise the next $1 billion and seven months to raise the next billion, a spokeswoman said. According to the Pew Research Center, 68 percent of crowdfunding users report “having contributed to a project to help an individual facing some sort of hardship or financial challenge.” Nearly half the money GoFundMe has raised since its 2010 launch has gone to medical campaigns.

The desperation behind such efforts suggests another reason for charity’s rise: increased social distress in the wake of recession and governmental retrenchment. Confronting those needs, leaders of the philanthropic sector face a predicament. Most reject the “voluntarism fantasy” that maintains that private giving can substitute for governmental funding. And they worry that channeling money to basic human services might relieve pressure on politicians to spend on such programs. Yet they cannot disregard the scale of the suffering around them. In the midst of the Great Recession, even as total charitable giving fell, donations to food banks spiked. In a 2010 survey, 40 percent of foundations reported that they increased their funding to “safety net activities and vulnerable populations.” The founder of GoFundMe, Rob Solomon, has called his site a “digital safety net,” which underscores the need to catch those who fell through the fraying public one. “If the holes weren’t huge and gaping, GoFundMe wouldn’t need to exist.”

Post-credit-crisis frustration with Western capitalism points to a final reason behind charity’s possible resurgence. Traditional charity has long operated outside the rules of the marketplace. This is, in fact, one reason modern critics have dismissed its ministrations: They believe it too often encourages idleness. On the other hand, during the Gilded Age, philanthropy became associated with the contributions of the financial elite and so was increasingly implicated in the economic systems in which their wealth was produced. Recently, the coupling has been consecrated with a neologism: philanthro-capitalism, which describes the belief, as the coiners of the term explained, that “the rich can save the world ” by channeling market forces toward philanthropic ends.

Given those associations, charity can be cast in opposition to capitalism. It is not surprising that one of most powerful critics of the “deified market,” Pope Francis, is also one of our age’s most passionate defenders of traditional charity. (In case you are wondering whether the pope thinks you should give to panhandlers, the answer is “always” yes.)

This suggests a striking ideological reversal. Charity, especially as practiced by its Catholic acolytes, could claim both conservative and radical modes (see, for instance, the complex politics of Dorothy Day). But it was often understood by its critics as fundamentally reactionary, opposed to efforts at social transformation and rooted stubbornly in the belief that “the poor ye always have with you.”

Although it’s unlikely that Bezos had them in mind when he issued his call for advice on Twitter, charity’s radical possibilities are now coming to the fore. Premised on the proximate encounter with human suffering, staked to the fundamental dignity of those in need and humble in the immediacy of its ambitions, charity stands against the powerful forces of contemporary life that feel distant, hubristic, bureaucratic and unresponsive.

In that sense, charity, despite its limits — because of its limits — can be disruptive.


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