Introduction
Defined most simply as love of mankind, philanthropy is more practically understood as generous benefaction towards the well-being and happiness of others. Such benevolent giving has had, and continues to have, a profound impact on millions of people, in their health and spirit, in the education they receive, the natural environment they live in and in the civic and political conversations that help determine their future.
Scientific progress and a thriving arts scene depend crucially upon the support of philanthropy. Hospitals , universities, libraries, art galleries, museums and places of worship commonly rely on philanthropic giving. Philanthropy helps protect the environment by supporting nature conservation and funding thousands of parks and botanical gardens. In both poor and rich nations, philanthropy delivers extensive and wide-ranging benefits, from the provision of clean water and vaccination programmes in Africa to the creation of public service broadcasting and the 911 emergency call service in the USA. Philanthropy has valuably contributed to the fight against the evils of slavery, racial segregation in schools, and denial of educational opportunities for girls.
Yet, despite all the benefits it has conferred, philanthropy remains controversial in, for example, its relationship with the government, and the extent of the way the state can cede the provision of public goods to a few wealthy people. Philanthropy can accentuate and exaggerate political divisions in society. It promotes the liberal agendas of marriage equality and access to birth control and at the same time supports socially conservative causes such as restrictions on the availability of contraception and abortion. This can be argued to further democracy, but it can also powerfully amplify the voices of social discord.
Some of the controversies surrounding philanthropy were illustrated when in September 2018, Jeff Bezos of Amazon announced the gift of $2 billion to help the homeless and establish a new network of schools. Amongst all the positive commentary on this extraordinary benefaction were criticisms that it was not generous enough. Bezos was reputed at the time to be worth more than $160 billion. Questions were raised about the means by which his wealth was accumulated, including exploitative work practices in Amazon distribution centres and the companyās expertise at avoiding taxation, and whether, indeed, such gifts are designed to deflect such reproaches. The sensitivities philanthropy arouses are evident when someone can donate $2 billion to good causes and still attract criticism.
The Sackler family has donated hundreds of millions of dollars to some of the highest profile cultural and educational institutions in the world, including the Guggenheim, Smithsonian, Victoria and Albert and British Museums, and Harvard , Oxford and Cambridge Universities. Yet in recent years institutions that have received donations have either refused to accept more funding from the Sackler Trust or removed the Sackler name from the galleries and buildings the Trust has supported. The reason is the Sackler family owns Purdue Pharma, the company accused of promoting opioids: more than 130 people die each day in the USA after overdosing on opioids. The controversy surrounding the Sackler family led to the Sackler Trust announcing in 2019 it was halting all new philanthropic giving. Philanthropists may be making important contributions to good causes, but there is a need to properly assess the sources of their wealth: should āgoodā be funded by questionable sources?
Another controversy surrounds the concept of āphilanthrocapitalism ā (Bishop and Green 2008; Edwards 2008), the idea that business principles can be successfully combined with the search for social progress. Proponents contend that the techniques that business people use to accumulate wealth, especially recently in the technology and finance sectors, can be applied to improve the effectiveness and efficiency of philanthropy. Opponents point to a lack of evidence that this is the case, question the accountability of such philanthropists, and ask whether these business methods are indeed superior to socially determined, democratic processes for decision-making. They query whether philanthropic giving is best guided by the business principles of markets and competition or civil societyās principles of social justice.
Philanthropy includes donations from wealthy individuals and corporations, often directed through foundations, and it is these that are often most contentious. In his book on American philanthropy, Waldemar Nielson (2002) captures the wide differences of opinions on philanthropy, and especially in philanthropic foundations, saying they can be āinspiring in some the highest hopes and expectations and in others dark fears and resentments. By some they are seen as the Hope of the Futureā¦ by others as our Fifth Columnā.1
This Introduction will address the many and varied contributions of philanthropy and its virtues and drawbacks, and analyses the close connections between philanthropy, innovation, defined as the successful application of new ideas, and entrepreneurship, defined by opportunity recognition and risk-taking. It will analyse when philanthropy is societyās hope of the future and when a fifth column. It offers a multidisciplinary and international perspective, and includes case studies and vignettes of leading philanthropists and philanthropic organizations, past and present. It considers the future challenges of philanthropy and how it can best support innovation and innovation can support it. It develops the argument that the greatest contribution philanthropy can make is when it supports innovation and entrepreneurship that improves human welfare and well-being and would not occur in its absence.
Defining Philanthropy
Philanthropy is a very diverse phenomenon, and distinguishing it from other forms of giving is notoriously difficult. Definitions of philanthropy are often conflated with related activities such as charity; social enterprises, entrepreneurship and innovation ; non-profit and non-governmental organizations; the voluntary and āthirdā sector, and āimpact investingā (investing to produce positive social and environmental, as well as financial, returns). There is confusion because there is overlap in all these various activities and organizations, and philanthropy can support them all. They often provide the means by which philanthropy is delivered. But they are different, and confusion often reigns.
The bewildering range of organizations, structures and activities described as philanthropy does not help research and analysis to build cumulative understanding. Legal definitions of philanthropy tend to very broad and, in any case, vary across national jurisdictions, making internationally comparative analysis very challenging. Yet, greater clarity is needed, and a clear definition of philanthropy is required.
The Oxford English Dictionary offers the following definition:
Love of mankind; the disposition or active effort to promote the happiness and well-being of others; practical benevolence, now esp. as expressed by the generous donation of money to good causes.
But is giving to a good cause by buying a badge from a street fundraiser or running a sponsored marathon the same as a systematic campaign of substantial and engaged support for promoting the happiness and well-being of others?
Any definitions will be tendentious, and there will be exceptions to any rule. Nevertheless, for analysis to be meaningful some categorization and boundaries of philanthropy have to be determined, and we shall concentrate particularly on what can be considered āstrategicā philanthropy. This form of philanthropy can be distinguished by its function, form and source.
The function of this philanthropic giving is active involvement with enacting lasting change. One way of distinguishing philanthropy and charity, for example, is associating the former with addressing the causes of problems and the latter with the effects of those problems. Words commonly used to describe charity often include palliative, rescue and relief, and philanthropy include corrective, rebuilding and problem-solving. Yet many charities address causes of problems, such as cancer research, and engage in policy work designed to correct social problems. Using a retailing analogy, charity has been likened to high-street retailing with many stores and products from which to choose, and philanthropy with expensive bespoke purchasing. One benefactor has said that when he simply writes a cheque it is charity, but when he dedicates his time, energy and money towards a cause he passionately believes in, it is philanthropy. In such a view, philanthropy is active, and charity is passive. But again, this is not always the case.
In this book, the position is taken that the function of philanthropy lies with its providersā wish to determine how the problems with which they have strongly emotionally identified are to be tackled. Philanthropy, in the words of John D. Rockefeller (1909), deals with āfinalities ā a search for a cause, an attempt to cure evils at their sourceā. In 1904, Joseph Rowntree wrote a Founderās Memorandum for his Foundation in which he says:
I feel that much of the current philanthropic effort is directed to remedying the more superficial manifestations of weakness or evil, while little thought or effort is directed to search out their underlying causes. Obvious distress or evil generally evokes so much feeling that the necessary agencies for alleviating it are pretty adequately supported. For example, it is much easier to obtain funds for the famine-stricken people in India than to originate and carry through a searching enquiry into the causes and recurrence of these famines.2
In the words of the great British entrepreneur and philanthropist, Dame Steve (Stephanie) Shirley : ācharity repairs the immediate damage of social ills, philanthropy tries in a more preventative way to make society a better place. For those who can afford to give large sums, philanthropy is a more productive investmentā (Shirley 2012).
In the delivery of its aims and objectives i...