Fake Philanthropists Threaten Democracy

Philanthropy

Hiding behind the virtuous façade of philanthropy is an elite class that determines political agendas in the absence of any form of control, write Menno Bosma and Roeland Muskens.

Two hundred people in the United States, including actor Heath Ledger, have died from using it. Another 2.4 million have become addicted to it. OxyContin is not just a powerful painkiller – it is an actual killer. The number of OxyContin users in the Netherlands has quadrupled over the last 10 years, while the number of people who have overdosed on the drug has increased sixfold, to 280 in 2018.

The manufacturer of the drug, Purdue Pharma, is owned by the Sackler family. In 2006, they admitted in U.S. federal court that the marketing for the drug had been misleading. With a total fortune of $13 billion, however, the family could easily afford the $600 million fine that was imposed. Nor are the Sacklers hurting financially due to the millions of dollars they invest annually in medical research at four American universities; research that, it should be noted, is at least partially focused on combating drug addiction.

These sorts of contributions are basically comparable to someone trying to extinguish a red hot stove using drops of water – except, in this case, the generous donors are the ones who turned the stove on in the first place. The Sacklers are no exception. Tobacco producer Philip Morris, for example, funds the Foundation for a Smoke-Free World. Nor are these the first business owners to emerge as benefactors after initially dirtying their own hands. The Fentener van Vlissingen family of the Netherlands, who quietly invested in South Africa throughout the darkest days of apartheid, currently operates numerous charitable foundations.

Though the philanthropy of wealthy businesspeople has traditionally been applauded, this has recently begun to change, especially in the U.S. In January 2018, the deans of 17 schools of public health declared that they would not be accepting research funding from the Foundation for a Smoke-Free World. If manufacturers such as Philip Morris really want to bring about a “smoke-free world,” they wrote, then they would stop the production and advertising of cigarettes rather than simply paying lip service to the cause by donating to anti-smoking foundations.

There is also a growing backlash against the parent companies of major philanthropic foundations. The number of lawsuits against manufacturers of painkillers, including Purdue Pharma, now total in the hundreds.

Covering Up One’s Own Wrongdoings

Two recently published books are helping reinforce this wave of criticism against “Big Philanthropy”: “Winners Take All: The Elite Charade of Changing the World,” by American journalist Anand Giridharadas, and “Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do Better,” by Stanford professor Rob Reich. Both authors argue that the elite who donate money to help alleviate problems such as poverty and illness are, at best, maintaining the status quo, and, at worst, covering up their own wrongdoings.

Reich actually considers wealthy philanthropists to be a threat to democracy, as they set priorities and determine agendas in the absence of any form of control: “The modern philanthropic foundation is perhaps the most unaccountable, non-transparent, peculiar institutional form we have in a democratic society,” he writes.

The American debate over “the limits of philanthropic restitution” does not yet appear to have reached the Netherlands. Dutch development organizations such as SNV, Cordaid and Agriterra have recently received donations from the Bill & Melinda Gates Foundation (though this is not to detract from the merits of the projects that these organizations have implemented with these funds). This is a result not only of the enormous cuts in funding for development cooperation, but is also consistent with the prevailing trend of viewing corporations as the saviors of the world.

From Boogeyman to Partner

Now that aid and trade are interconnected and all stakeholders are expected to contribute to the United Nations’ Sustainable Development Goals, corporations have been transformed from boogeymen into valued, strategic partners, and the taboo around accepting private donations has disappeared. In the past, Dutch nongovernmental organizations invariably turned to the minister for Foreign Trade and Development Cooperation to seek support for new projects; now they look to Bill and Melinda Gates. Moreover, they are increasingly aligning their activities with the agendas of philanthropic foundations, for fear of otherwise missing out on feeding from the well-filled philanthropic trough.

So what is wrong with taking money from a philanthropic foundation, especially as long as that foundation is not funded with tainted money? Philanthropists are not bad by definition, right? Our critique focuses on three issues:

First, the aims of major philanthropic foundations often stem directly from the personal interests or beliefs of their founders. These are sometimes unequivocally political. For example, a letter written by American oil magnate Charles Koch was leaked in which he stated that his gifts to universities had to be used to counter critics of climate change – critics who were explicitly excluded from benefitting from this generous social provision.

In the best cases, philanthropists do indeed support noble causes such as the eradication of disease, though their focus may be different than that of governments and the United Nations. But the opposite is also happening more and more frequently. Even some of the largest international organizations are aligning their priorities with those of major philanthropists, whose budgets frequently exceed that of the U.N.

Second, philanthropists from the American business world, in particular, place a strong emphasis on quick fixes. They prefer investing money in developing new drugs rather than in strengthening healthcare systems in lower- and middle-income countries. They also tend to promote primarily technological solutions, as they have done with the issue of the global food supply. Thus, both the Bill & Melinda Gates Foundation and the Rockefeller Foundation are supporting efforts to “modernize” African farming practices, including the use of genetically modified crops, which will pave the way for big agribusiness. As a result, small-scale, family farmers will be left at a disadvantage.

Third, foundations are extremely insular organizations in which just a few family members typically call the shots. There is no public control and hardly any external oversight. The Bill & Melinda Gates Foundation, for example, does not publicly disclose information about its specific investments. Similarly, millions of euros are distributed according to completely unclear criteria by the National Postcode Lottery in the Netherlands, which is run by the Dutch entrepreneur and philanthropist Boudewijn Poelmann.

A Gift to Oneself

The money that major philanthropists donate publicly is actually a gift to themselves. Philanthropy is a poor alternative to a fair and equitable system of taxation, in which not only incomes, but also wealth, are firmly taxed. The money that business owners donate to charitable foundations generally comes out of a company’s profits. Not only do these businesses make a real sport out of evading taxation, but business owners also pay no capital gains tax on their charitable donations. Viewed from this perspective, they are not adding any additional resources to the public domain, but at best are shifting the direction of public spending. In doing so, they retain a great deal of their wealth, as it is estimated that the major philanthropists of this world have not given away more than 20 percent of their total fortunes.

Reich recently recounted a revealing anecdote about billionaire George Soros. Soros could not stomach that people that he had hired to work for his foundation were involving themselves in the allocation of its money. During a meeting, he reportedly pounded his fist on the table and yelled: “Well, at the end of the day this is my money, so we’re going to do it my way.” To which a staff member calmly replied, “Excuse me, Mr. Soros, but roughly half of the money in the foundation would have been in the U.S. Treasury if you hadn’t put it in the foundation. So perhaps other people should have a say, too.”

Overall, this reinforces the impression that philanthropists are like firefighters who not only decide for themselves whose aid they will come to, but who are at times also responsible for having started the fire.

A Few Lessons

Of course, there is nothing wrong with entrepreneurs, whether active or retired, who accept their social responsibilities. But they should take a few lessons to heart.

For instance, they should start not by doing good, but by doing less harm. First getting billions of people addicted to smoking or deadly painkillers and then offering them a Band-Aid is no service to humanity. Whenever philanthropy takes the place of conducting business in a socially responsible manner, then it is merely a cover-up. The two must go hand-in-hand.

They should also look beyond their own interests. There are still numerous tropical diseases, such as dengue fever and Chagas disease, which, while admittedly not in their own backyard, too little is being done to combat. Or what about diarrhea, tuberculosis and maternal and child mortality, all conditions that continue to cause countless preventable and unnecessary deaths in poorer countries?

Finally, they should lift the veil of secrecy so that the world can see all the great things they are planning in the recesses of their foundations. And if they are unwilling or unable to do that, then they should leave the altruism to governments and nongovernmental organizations that have not first dirtied their own hands, that have a genuinely broad scope, and that operate in a transparent fashion.

Menno Bosma and Roeland Muskens are affiliated with the research organization Wereld in Woorden Global Research & Reporting.