The New Philanthropy

In his groundbreaking essay, "The Gospel of Wealth", Andrew Carnegie sought to cement philanthropy as an unyielding facet of wealth: "Thus is the problem of Rich and Poor to be solved. The law of accumulation will be left free; the laws of distribution free. Individualism will continue, but the millionaire will be but a trustee of the poor; entrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done for itself."

As one of the richest men in the world at the turn of the twentieth century, Carnegie was in a place to assert philanthropy as a business of the rich and not just of nations. And although that trend continued to row steadily since Carnegie began it, in the past seven years, philanthropy has increased exponentially. Since 2000, when Bill Gates set up his Bill and Melinda Gates Foundation, the foundation has given away $29 billion. Now, Gates works full time at his foundation and, through his efforts, has inspired people such as Warren Buffet (who matches Gates's donations to the Gated Foundation up to 1.5 billion dollars a year) to donate their enormous fortunes.

This new era of philanthropy--as spearheaded by people such as Gates, Buffet, Bill Clinton and countless other celebrities (such as Angelina Jolie and Bono)--I label as 'The New Philanthropy'. I define 'New Philanthropy' as philanthropy that includes four important aspects:

1) It acts separate from any established government.
2) It uses the celebrity and wealth of individuals to increase societal giving through example.
3) It is funded primarily through "new money".
4) It focuses on every type of plight (from domestic to international; from human to environmental) rather than very specified and localized plight.

There are; however, detractors of these new philanthropists detail who argue that there are three reasons why this new philanthropy will fail:

1) Many of them (the celebrities, in particular) do not have the knowledge or experience of economics or politics to take real action on a global level.
2) The philanthropists are too swayed by trends in philanthropy to make a sustained difference.
3) Simply throwing trillions of dollars at problems--the amount estimated by Boston College that will be donated by Americans between 1997 and 2007 is between $5 and $7 billion--does not fix the world.

I disagree with the above arguments and will now seek to disprove them.

Three weeks ago, the Clinton Global Initiative (CGI) had their annual get together in which many of the world's most important politicians and businessmen met under Bill Clinton's watch to not only talk about national issues but to act on them. The Economist writes, "Mr Clinton says that he founded the CGI because he got fed up with attending meetings that were all talk and no action (did somebody mention the UN?). So the 1,000 or so attendees at the CGI are required to pledge to take specific actions, and are told that failure to honor those pledges means they don’t get invited back. Around 65% of attendees at the CGI are from the private sector. So far, there have been nearly 600 pledges, worth a combined $10 billion" ("The Clinton Factor"). Clinton, seen nowadays as much as a celebrity as he is a former president, brings an intelligence and drive to the new philanthropy that overshadows his successes as president.

Clinton is one of the three archetypes of "New Philanthropy". He belongs in the category that I will label as the "ex-politico". Others in this category include Nelson Mandela, Jimmy Carter and Al Gore. While these figures do not necessarily have the money to privately fund all their projects; their experience brings the knowledge to not only appropriate the funds, but also to garner critical support and media attention. I recently wrote on a trip to Darfur by Jimmy Carter and Archbishop Desmond Tutu. This trip required the delicacy and expertise of such ex-politicos to not enrage the government of Sudan. However, the trip would have been impossible without the second archetype, "the Tycoon"

A Tycoon is a wealthy, "new-money" businessman who, in the prime of their wealth, has decided to focus on philanthropy. The titans of tycoonery include Bill Gates, Warren Buffet and Richard Branson. In fact, it was Branson who funded Carter's and Tutu's trip to Darfur. These individuals add the money into the new philanthropy. Clearly, these individuals are also extremely smart and command much credibility for their success.

The third stereotype is "the Celebrity". These individuals, including Oprah, Bono and Angelina Jolie, use their vast celebrity and public adoration to promote their causes and stimulate public philanthropy.

As can be seen from the three archetypes, the main arguments against "New Philanthropy" are unfounded:

1)Many of them (the celebrities, in particular) do not have the knowledge or experience of economics or politics to take real action on a global level.
--Many of the "celebrities" who might not have the traditional knowledge of the world travel the world in order to understand it better.
--One of the man objectives of the "ex-politico" is to provided the philanthropic efforts with the knowledge to make sure everything is done.

2) The philanthropists are too swayed by trends in philanthropy to make a sustained difference.
-- "ex-politicos" like Al Gore--whose thirty years of warnings and eight years of crusading on Global Warming has won him a Nobel Prize--have proved that people can keep a sustained effort on specific causes
-- "Tycoons" set up funds with enough money to sustain work on multiple causes at the same time.

3) Simply throwing trillions of dollars at problems--the amount estimated by Boston College that will be donated by Americans between 1997 and 2007 is between $5 and $7 billion--does not fix the world.
--All three stereotypes have done much more than simply throw money at the problem. It is their expertise, support from the public and their willingness to challenge governments as much as their money that make them so valuable.

So, what is traditionally said to detract form "New Philanthropy" is not really true. But, is "New Philanthropy" really that good?

The answer is yes! The "New Philanthropists" can do what governments cannot. Their distance from established goevernments means that they can act without fear of international backlash (The US could not, for example, send "ex-politicos" into Sudan to criticize the Sudanese government).

And efforts by the "New Philanthropy" do not go un-lauded. Time named Bill and Melinda Gates, as well as Bono as their 'Persons of the Year' in 2004. The Nobel Committee recently awarded Al Gore and countless other media outlets and award foundations are recognizing the efforts of the "New Philanthropists".

I began this post with a quote by Andrew Carnegie; so, who better to end it with: "Such, in my opinion, is the true Gospel concerning Wealth, obedience to which is destined some day to solve the problem of the Rich and the Poor, and to bring "Peace on earth, among men Good Will."