Clinton Global Initiative 2012: Government Spending is Ending Philanthropy as We Know It, and That is a Good Thing


At the turn of the 20th century, industrialists such as Andrew Carnegie and John D. Rockefeller gave larger, more organized dollar amounts to charity than the Western world had ever seen outside of the Catholic Church. Last week, their modern counterparts gathered at the Clinton Global Initiative to discuss philanthropy’s future at the Clinton Global Initiative. Philanthropy’s turf, however, is shrinking. 

Happily, part of that shrinkage is due to success: many of the social ills first tackled by philanthropists and religious orders (e.g. healthcare, education, and basic welfare), have become the jurisdiction and responsibility of the state. In the U.S., almost 90% of students attend state-run schools, and most Europeans have access to universal health care. Many developing countries are on the same course, launching huge social safety nets that could make some foreign aid obsolete.

At the same time that these countries are building up their own welfare programs, groups such as India’s Dasra Foundation are developing in-country networks of local philanthropists. As they do, many of the brightest innovations in philanthropy now come from the Global South and work their way Northward, rather than the other way round: conditional cash transfers were dreamt up in Mexico, for example, and microfinance first took root in Bangladesh and Brazil. Has Western philanthropy successfully funded itself into irrelevance? 

Whither Philanthropy? 

Hardly; but change is coming. As Indiana University's Leslie Lenkowsky points out in a recent BBC article on the future of philanthropy, the early philanthropists funded efforts that still-developing Western governments could not--or would not--underwrite. That may no longer mean large-dollar funding of hospitals and universities in OECD member countries, but there remain areas where governments fear to tread. Western philanthropy’s modern challenge is to determine how best to liberate the poor and the oppressed in developed and developing countries alike.

Where Democracy Fails

Across the Western world, hard-won welfare programs keep people off the streets, out of slums, in school, and fed. Efforts by Western charities and governments have ended the specter of famine, made history of killer diseases, and largely eliminated child and slave labor in democratic countries. But democracy has its limits, and there are groups of people in the U.S. who need high-powered, well-funded advocates. The U.S. immigration system denies people basic rights and a political voice. Prisoners -- and especially felons, stripped of their right to vote -- have precious few allies in the halls of power; nor do the mentally ill homeless. And as President Barack Obama pointed out at the Clinton Global Initiative last week, the United States has yet to end the modern slavery of human trafficking. Philanthropic and religious funding can step in to provide a voice for the voiceless in developed democracies. 

Miles to Go

In the rest of the world, things get more complicated. Countries such as China and Indonesia are working furiously to build social safety nets made affordable by their increasing GDPs. As they move through a social evolution similar to that of Western countries in the 20th century, Western philanthropists -- again, by aligning themselves with the poor and oppressed--can prove as relevant today as 100 years ago. In some countries, that may mean fighting for religious freedom; in others, the rights of workers to organize in the face of an accumulation of wealth as impressive as the industrial revolution. Many developing countries, though democratic, yet have weak legal systems and a constantly harassed press. Public health affords foreign donors another opportunity for outsize impact. Few institutions will fund HIV prevention efforts targeted at sex workers and intravenous drug users, despite the fact that early, targeted efforts can save millions of lives by preventing the virus from spreading more widely. Therein lie opportunities for steel-stomached funders. 

Then, of course, there are countries that have yet to jump on the treadmill of economic development. For decades to come require the support that philanthropies can still provide. In his 2007 book The Bottom Billion, Paul Collier identifies fifty-eight countries with the deck so stacked against them that they need significant outside intervention to pull their citizens out of poverty. Much of that work is as slow, thankless, and “unsustainable” as it is necessary. 

Seeking out the poor and the oppressed

Philanthropy today is as critically important as when the American industrialists gave away their fortunes a century ago. The most pressing issues have shifted just as Carnegie understood that they would, but poverty and oppression remain. Those philanthropists willing to seek it out will find themselves as relevant today as 100 years ago.