Philanthrocapitalism: How the Rich Can Save the World and Why We Should Let Them was first published in 2008. It offered what many experts then—and now—have seen as timely insights into how to improve traditional systems of philanthropy by making them more like the market practices that drive the private sector. The book has also sparked considerable controversy.
The book quickly became what some commentators called a “bible” for the modern-day philanthropists. Yet other observers have critiqued the book’s ideas as offering a style of “neoliberalism” that only further empowers wealthy individuals and companies and exacerbates societal inequalities.
It’s worth taking a renew look at Philanthrocapitalism’sviewpoints and solutions, as today’s conversations in the philanthropic world often center on rethinking a number of traditional approaches in this pandemic era.
Treating Philanthropy like a Business
One of the book’s authors, Matthew Bishop, was then a business editor at The Economist and is now a senior fellow at the Brookings Institution, working in the Global Economy and Development section. His co-author, Michael Green, has long worked as an expert advisor on international development at intersections of the governmental and non-governmental sectors.
A 2009 edition (with perhaps the gentler new subtitle of “How Giving Can Save the World”) featured a foreword by former President Bill Clinton, just one of the notable personalities interviewed in its pages.
Bishop and Green also talked with celebrity philanthropists who included U2 frontman Bono and Angelina Jolie, as well as powerful CEOs known for their philanthropy, such as Bill Gates, Sir Richard Branson, and the late Ted Turner. The book, which took two years to research and write, featured conversations with philanthropists who are especially noted for the revolutionary, results-oriented approach they bring to their task, as well as their focus on using their dollars to produce the greatest possible impact.
This way of looking at philanthropy views it through the lens of using donations to reshape society in ways that are more just and more broadly equitable, and that produce high yields on long-term social investments. The viewpoint draws on the experiences of practitioners at the helm of large-scale capitalistic enterprises to apply the same lessons to building and sustaining charitable wealth. This mindset contrasts with the perception of traditional philanthropy, in which many donors gave money away to specific organizations or initiatives without necessarily structuring their giving into any overall social impact plan. The reality is often somewhere in-between and has been for decades.
The Tradition of Impact-Oriented Philanthropy
As some critics of Philanthrocapitalism have pointed out, results-oriented capitalism with a focus on making strategic investments into social welfare actually long pre-dates Bill Gates and his friend Bono. Andrew Carnegie, John D. Rockefeller, Sr., and other household-name philanthropists of the late 19th and early 20th centuries were skilled practitioners of the art of successfully applying careful cost-benefit analysis and other business knowledge to measure the impact of their charitable giving.
One example: Rockefeller’s team included Frederick T. Gates, a former Baptist minister who advised the tycoon based on principles of the then-popular Efficiency Movement. This school of thought aimed to apply the precision measurements of the Taylorist factory management system to every aspect of business and social welfare. Gates worked with Rockefeller to help ensure that every charitable dollar spent would be maximized in terms of doing the most good.
Or take Carnegie’s plan to build and maintain public libraries across the United States through the implementation of long-term strategic trust funds and endowments. In operation for more than a century, these and other funds focused on education and peace continue to deliver measurable results. So, we might more reasonably approach Bishop’s and Green’s analysis of the “new” approach of philanthrocapitalism more as a 21st century evolution of principles and practices that originated in the previous century.
In Philanthrocapitalism, the two authors enumerate how private corporate-based donations are filling in funding gaps due to governments’ reluctance to engage in widespread social spending—which was also the case in Rockefeller’s and Carnegie’s time—and how this approach may even represent one of the biggest sustainers of social and educational change in the world. In fact, one of the individuals Bishop and Green spoke with for their book was an official at the Rockefeller Foundation, which today is working to move a 20th century operation into the 21st.
The limited government spending landscape has also changed, potentially only temporarily, with the infusion of trillions of dollars of government capital within the United States alone during the COVID-19 pandemic.
Critiquing the Philanthrocapitalist Mindset
Critics suggest philanthrocapitalism is a “neoliberal” enterprise that actually bolsters systems of inequality. Some argue that corporate foundations’ donations deprive public treasuries of the tax dollars that could be helping overhaul systemic injustices on a larger, more effective scale.
Indeed, some scholars have found that a relatively small proportion of “philanthrocapitalist” giving is directed to the most economically and socially marginalized people. A significant portion of these dollars go to fund already wealthy institutions such as legacy universities and religious organizations.
Enduring Value and Inspiration
These caveats acknowledged, the book Philanthrocapitalism still has plenty for readers to consider a decade out. The anecdotes and intimate glimpses of the decision-making processes of famous philanthropists remain intriguing and enlightening, their strategic techniques and analyses can still provide useful guidance, and the power of their passion to create a better world continues to inspire.