Tag Archives: David Callahan

The Soft Power of American Philanthropy

Impakter magazine just published another one of my articles and I’m happy to share it with you – it’s a book review, great read, highly recommended! Here’s the start of my review:

THE REAL ROLE OF THE NEW MEGA-DONORS: SHAPING THE SOCIAL AGENDA

BOOK REVIEW: THE GIVERS BY DAVID CALLAHAN, PUBLISHED BY KNOPF (APRIL 2017) 352 PAGES

Is philanthropy good or bad for society?

With the global explosion of philanthropy, the new forms of giving and volunteering, and the rise of social entrepreneurship and impact investing, the issue is more pressing than ever. Nowadays, the soft power of mega-donors has grown so much that in many areas it has displaced governments – even very large ones like the Federal government.

Philanthropists address critical social problems, they move in where public funds have failed (or are weak). Ultimately, they set the social agenda, not only in the United States but around the world.

Yet, unlike democratic governments and politicians that must face voters, mega-donors are accountable to no one. Their own private views, beliefs and ideologies end up shaping society. They decide what diseases to battle, what kind of schools are needed, what social policies to promote, what research and what artistic trends should be supported.

Is this a fair system in a democracy where all citizens should have a say?

That question is increasingly asked, including in David Callahan’s latest book I am reviewing here. Yet this is not the first time philanthropy arouses suspicion in America. When Rockefeller launched his foundation a hundred years ago, many politicians doubted his good will. As it turned out, the Rockefeller Foundation had a profound impact on the human condition when breakthroughs in the agricultural research programs it had financed in Mexico and India, initiated respectively in 1941 and 1956, laid the foundation for the “green revolution”, so-called because it changed food production for the better, particularly in Asia, helping to solve the recurrent horror of devastating famines.

IN THE PHOTO: FARMER STANDING IN HIS CORN FIELD IN ANDHRA PRADESH, INDIA IN 1957 AFTER SCIENTISTS SUCCESSFULLY DEVELOPED HYBRID GRAINS THAT COULD RESIST DISEASE AND INSECTS. PHOTO CREDIT: THE ROCKEFELLER FOUNDATION

Nevertheless, in spite of the successes, countless books and articles continue raising questions, particularly over the past ten years, starting with Philanthrocapitalism: How the Rich Can Save the World, the work of the Economist’s Matthew Bishop and Michael Green. Published in 2008, based on interviews with mega-donors like Bill Gates, it was perhaps the first modern compilation of what philanthropists living today are really up to. Another milestone was reached last year with Philanthropy in Democratic Societies, edited by Stanford political scientist Rob Reich who sees charitable foundations as an “institutional oddity” in a democracy and is concerned that foundations, in spite of their usefulness in supporting innovation – what Warren Buffett famously termed “society’s risk capital” –  may be the “voice of plutocracy”.

Among the notable essays in that book, a theory of “disruptive philanthropy” developed by Aaron Horvath and Walter W. Powell, two Stanford sociologists, stood out. Based on the observation that philanthropy often competes with government instead of collaborating with it, it raises deep ethical questions. As Horvath and Powell explained to The Atlantic: “Disruptive philanthropy seeks to shape civic values in the image of funders’ interests and, in lieu of soliciting public input, seeks to influence or change public opinion and demand.”

A classic (and controversial) example that often comes up in this connection is charter schools promoted, inter alia, by the Broad and Gates Foundations. Not everyone agrees that they are an improvement over the existing public education system.

David Callahan’s new book The Givers – Wealth, Power and Philanthropy in a New Gilded Age is the latest arrival on the scene and adds to the debate – philanthropy vs. democracy – carrying it forward with considerable new and updated material. Callahan has done his research for years, he has met many people in the industry, he has uncovered hard-to-find facts about the “opaque” world of philanthropy and the website he has been running, Inside Philanthropy, has been a major source of information ever since it was launched in 2014.

With all this data in hand, Callahan takes us for a roller-coaster ride through the current philanthropy landscape, showing us how living mega-donors wield more power than ever before. And, he warns us, their influence is likely to grow unimpeded as a result of growing income inequality, a trend first magisterially documented by Thomas Piketty in his now famous Capital in the 21st Century.

In short, and to use Callahan’s words, “in many ways, today’s new philanthropy is exciting and inspiring. In other ways, it’s scary and feels profoundly undemocratic.”

WHY TODAY’S NEW PHILANTHROPY IS EXCITING

The book starts off by bringing home two stunning truths about our time that, Callahan argues, amount to a paradigm shift:

The rest on Impakter, click here.

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