8 questions for foundations seeking to address systemic problems

Peter Buffett, son of gazillionaire philanthropist, Warren Buffett, and founder of the Novo Foundation, has ignited a tempest in the philanthropic community with his biting critique of the “Charitable Industrial Complex.” Everyone grumbles about the bumblings of donors, but for someone as iconic as a Buffett to trumpet his broadsides in the New York Times is pretty huge. It’s drawing predictable fire, but Buffett isn’t easily dismissed and he’s raising issues that deserve an airing. (Nice start in that vein from the Center for Effective Philanthropy here.)

Parts of Buffett’s critique will be familiar. He characterizes philanthropists as naïve and arrogant, parachuting into situations with no real knowledge (“philanthropic colonialism”). He sees philanthropy as largely a sop for the rich, easing their guilt with “conscience laundering” and making them feel “heroic.” He questions the growth of an “industry” that is unaccountable and doing too little to change lives.

Good stuff, especially from a Buffett, but these particular critiques don’t add much to the existing literature on philanthropy. Philanthropic circles are quite open about mistakes and many foundations are seized with concerns about impact, spurring a wave of “results-oriented” efforts to measure and ensure value for money. Likewise, questioning donor motives can be entertaining, but is more likely to breed defensiveness than change.

The mainstream responses to Buffett tend to bear that out. A well-known philanthro-chronicler of our day, Matt Bishop, coiner of the term “philanthrocapitalism,” dismisses Buffett’s critique as a “heartfelt but depressing and ultimately useless rant.” Howard Husock writing in Forbes quotes Henry Ford (“in effect, the Foundation is a creature of capitalism”) and chides contemporary philanthropists and Buffett for being naively ambitious about the role of philanthropy.

Buffett goes further and this is where it gets interesting, writing,

“Philanthropy has become the ‘it’ vehicle to level the playing field…But [sprinkling a little wealth around] just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over.”

It’s not often that someone like Buffett pays such implicit homage to Marx and Engels, who raised similar concerns in the Communist Manifesto: “A part of the bourgeoisie is desirous of redressing social grievances in order to secure the continued existence of bourgeois society. To this section belong economists, philanthropists, humanitarians, improvers of the condition of the working class, organizers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind.”

There was in fact a time when the philanthropic titans like Rockefeller, Carnegie and Mellon were openly challenged for trying to white-wash their business dealings through philanthropy, and when large foundations were suspected of simply propping up the status quo. Today, those sorts of challenges rarely make it out of the isolated musings of leftist academia, making Buffett’s mainstream blast so startling.

We would do well to consider whether the big foundations—especially in this era of “philanthro-capitalism”— are  truly able to challenge the status quo with any conviction. Are the market moguls driving new philanthropy, with their business-like focus on efficiency and market approaches to development, capable of the kind of structure-shattering imagination that Buffett rightly calls for?

More specifically, are they ready to throw their weight into the tougher challenges facing the development community: structural inequality, political capture, fragile states? Those challenges require an explicit focus on governance, politics and power: ill-governance must be challenged, politics must be directly engaged, and power must be re-distributed (zero sum!) from elites to communities and social movements. This is messy, risky, uncomfortable business, ill-suited to “results-oriented” measurement.

My own skepticism about mainstream philanthropy comes from two decades working with partners on the front lines of what I consider to be on the more status quo-challenging side of the development/human rights spectrum—economic and social rights, and corporate campaigning. In theory, the importance of these issues to those out to challenge structural inequities should be obvious. In fact, these remain the poor stepchildren of philanthropy, notwithstanding some great exceptions.

Buffett’s implicit question about the philanthropic appetite for structural change might be unpacked through some basic questions for foundations:

(1) How much funding goes to public policy advocacy versus basic services?
(2) How much funding addresses “power” imbalances directly? How much is about redistribution of power versus more general “empowerment?
(3) How much funding aims to build social movements and strengthen grassroots organizing?
(4) To what extent are alternative/grassroots voices part of the foundation structure (board, staff, proposal reviews, etc.)? What’s the balance between “elites” and alternative views?
(5) Does the foundation deploy its investments to challenge industry abuses?
(6) To what extent is the source of the foundation’s wealth (the business side) contributing to problems and how is the foundation managing that? (Note the debate about Carlos Slim’s philanthropy versus his monopolistic practices here.)
(7) Is the foundation using its political influence or elite networks to address systemic problems?
(8) To what extent are funding decisions transparent and accountable to the public?