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The word philanthropy dates back to the Greek word 蠁喂位伪谓胃蚁蝇蟺委伪, . Today the private philanthropy as non-official development assistance (ODA) to developing countries. Such assistance can be through large philanthropic foundations such as the Rockefeller or Clinton Foundation, or through 鈥榙irect giving鈥� platforms such as or . But does what we call philanthropy today deserve its name? Rather than focusing on the actions of specific philanthropic organizations, this piece聽will assess the impact the rise of philanthropy has on global governance and democracy.

Figure 1: Grants by private agencies and NGOs
Source: OECD data

As Figure 1 illustrates, there has been a drastic increase in private funding for development over the past four decades, with the growth really picking up in the 2000s. However, these numbers from the OECD are incomplete in many ways, as much philanthropic funding is not reported as such. The Center for Global Prosperity has done more in-depth data collection on philanthropic funding for global development projects, and found that while OECD estimated private grants to be at $31.5 billion in 2011, the amount to be $58.9 billion. In the same year, OECD ODA was approximately $134 billion. Thus, according to the CGP estimates, philanthropy is now equivalent to 44% of ODA.

What is the effect of this rise? While some see as a way for , it for being a way for corporations and rich individuals to divert attention from the unequal outcomes that the current global economic system generates. Before assessing the effects of philanthropy on global democracy and development discourse, let me briefly touch on some of the main issues philanthropic foundations deal with in practice.

What do Philanthropic Foundations do?

While activities of philanthropic foundations with a global orientation vary, the main areas of focus have been on . I criticize the philanthropic and corporate funding of microfinance , essentially for providing a way for the poor to live more comfortably in poverty, rather than addressing root causes of underdevelopment. Moreover, while financing the development of medicines is much needed, the philanthropic focus on specific diseases and medicines tends to set up that compete for health workers and administrative talent, rather than strengthening underfunded national health systems in developing countries.

Furthermore, recently 鈥榲enture philanthropy鈥� has been on the rise, which is a way to apply private financial resources and business principles to development problems. As the has observed, philanthropists have largely moved from being grant-makers to increasingly becoming real investors, expecting a financial return alongside social impact (for example by investing in ). In addition to their own projects, philanthropic foundations tend to fund NGOs in both the Global North and South, and there has been a recent (so-called 鈥榗orporate philanthropy鈥�).

As many have , charitable giving comes at a cost to the taxpayer. This is because philanthropists from donating to their own or others鈥� foundations. In fact, the US Treasury loses at least from tax breaks on donations. Related is the unfortunate tendency of philanthropists to dodge taxes. For example, while Facebook CEO Mark Zuckerberg and his wife donated 99% of their Facebook stock to philanthropy, Facebook is being sued for its transfer of assets abroad to ; and while positions himself as the savior of Africa, he is in Ireland. Thereby, the philanthropists pick which developmental projects to fund while reducing the government鈥檚 ability to fund such projects with taxpayer money.

Global Democracy and the Shaping of the Development Agenda

Although philanthropic foundations tend to position themselves as apolitical, offering technical solutions to poverty reduction, their investments are undeniably political in nature. For example, the Gates Foundation and Mark Zuckerberg have in the US and , and Michael Bloomberg鈥檚 reform initiative explicitly advocates for stricter gun control. While the public debate on education, health care and gun laws is ongoing, these philanthropists are using their financial resources to push their own agenda.

Furthermore, the , which was officially created by Kofi Annan in 2000, is an example of a platform that has given corporations and their associated foundations power to influence the international development agenda. Through Global Compact and other platforms, philanthropic foundations were, for example, able to of the Sustainable Development Goals.

Another example of corporate influence on international institutions is the the Gates Foundation has on the World Health Organization (WHO), as the organization鈥檚 biggest donor. The Gates Foundation has been criticized for , such as strengthening primary health care systems, emphasizing the role of the state in providing adequate health care, and working to achieve universal health care coverage. Rather than following the priorities of the UN members that negotiated the 1978 declaration, the work of the WHO is heavily influenced by the priorities of just a handful of philanthropists.

In addition to their influence on agendas of public international organizations, foundations also influence development discourse. As point out with reference to the UN Global Compact, framing philanthropy and voluntarism among corporations as an essential element of development, transforms political conflicts into moral frameworks and conflictual relationships increasingly into consensual ones.聽 By creating a narrative of everyone benefiting from the current system, these partnerships are masking the fact that while corporations may be profiting from the current system; the poor around the world are not. The focus on consensus and win-win solutions for all in society thereby conceals conflicts of interests that are inherent to global development ( calls this 鈥渆xcess of consensus鈥�). Therefore, Garsen and Jacobsson argue that ethics and moralities are replacing politics, and as a consequence that global democracy is under threat.

The language of philanthrocapitalism is largely , particularly the practices of venture capital investing. The interventions tend to be results-oriented, where results are defined in terms of short-term, measureable material outcomes. impact investing, venture, and strategic philanthropy abound, while ideas such as global power imbalances, unfair trade rules, and legacies of colonialism are brushed aside. Furthermore, the language of philanthropy tends to focus exclusively on poverty, thus dropping the rich from the equation. Although philanthropists tend to focus on scaling-up their interventions, their perspectives are limited by not seeing poverty as a global, political, and systemic phenomenon.

Still Depoliticizing Development

This is not the first time we see such depoliticization of global development on a large scale. Arguably, Western support for NGOs in the 1990s had a similar effect on international development discourse. At this time, the state was seen as an inefficient service provider, and in many countries the state had indeed been severely weakened by the structural adjustment programs of the 1980s. During the 1990s the number of NGOs therefore grew quickly to respond to donors鈥� desires to fund development projects through . Western agencies and governments wanted to bypass the inefficient developing country governments by funding 鈥渢he people鈥� directly, not realizing that an entity such as the people does not actually exist (as pointed out by a Cape Verdean interviewee in ). Arundhati Roy has called this movement in development , as potential activists are turned into bureaucratic NGO-workers that fight for funding to deliver services to the people. The language and operations of NGOs, such as , also serve to further depoliticize the development process. Just as NGOs are accountable to their funders and not to the people they work among, philanthropy initiatives are accountable to their investors, and not to the poor.

However, directing aid towards NGOs, foundations, and corporations rather than to public institutions is already a highly political decision as it originates from the desire to bypass the government. As pointed out in a , philanthropic foundations are thought to 鈥渂e more efficient providers of services,鈥� because a larger share of funding can be channeled directly to poverty-reducing projects since the government is bypassed.

Philanthropic foundations using their financial power to sway political debates, to contribute to a shrinking public tax base, and to depoliticize highly political topics such as poverty, is not in accordance with the original meaning of the word philanthropy. On the contrary, reducing global issues such as poverty to a technical problem tends to come at a human cost (see for example ). Bypassing democracy, which after all means the rule of the people, serves not only to undermine the state as a service provider, but also the people鈥檚 influence on national and global policy. As Roy points out, positioning oneself as apolitical is actually extremely political.

This post was originally published on the .