Afe for Vanguard

March 29, 2023

Philanthropy and sustainable development (4)

Philanthropy and sustainable development (4)

By Aare Afe Babalola

MODERN day philantrophists: Much as successive governments world over have been dedicated to the formulation and implementation of policies aimed at bridging the gap between the rich and the poor and the outright eradication of poverty, it appears that their efforts have yielded little results. The rich, it would seem, have simply become richer while the poor have become poorer. Whatever is the cause of this, be it ineptitude, incompetence or corruption, one thing that is crystal clear is that no single government can by itself adequately meet each and every need of its citizens. 

Government alone cannot reasonably be expected, particularly in the light of the world’s current economic realities, to improve the quality of life of everyone to the level which most people expect. Government alone cannot fix and repair every bad road or replace every worn-out desk in every school or provide every single child or individual with the best medical facilities required. I must not be mistaken as saying that these are not objectives to which every government anywhere in the world should seek to achieve and surpass. My contention simply is that our present realities make the attainment of such ideals difficult in the extreme. As one philosopher once said, “the way we live is so far detached from the way we ought to live”. So what is the way out? The answer is philanthropy.

It is in recognition of this that philanthropy as a concept has been utilised by many, individuals and corporate institutions alike to help in wealth distribution or re-distribution as the case may be. These persons have made it a duty to distribute their wealth to various causes in their lifetimes. As Andrew Carnegie put it, “the man who dies rich dies disgraced”. To achieve this they have either set up foundations to carry out their objectives or chosen to be directly involved themselves in charity work. At present the most notable of these individuals are:

Bill and Melinda Gates: With $34 billion in assets and more on the way from Warren Buffett, this is by far the world’s largest foundation. It is also hugely ambitious, aiming for such goals as an AIDS vaccine. That could take a decade or more to realise, but Bill Gates doesn’t mind. “I am pretty optimistic,” he says. “That’s why I keep signing the checks”. If the foundation’s long term initiatives do pay off, it would set an entirely new standard for high-impact philanthropy.

Pierre & Pam Omidyar: Pierre Omidyar applies a venture-capital approach to recipients ranging from microloans to Wikipedia. The Omidyar Network operates more like a venture-capital outfit, investing in business and nonprofits that aim for social change. The network and other efforts have huge multiplier effects: A $100million fund the couple established at TuftsUniversity is set to produce $1billion microloans in developing countries while also turning a profit for Tufts, Pierre’s alma mater.

Chris and Jamie Cooper-Hohn: As the manager of one of Britain’s largest activist hedge funds, Chris Cooper-Hahn has earned the label “ruthless”. The children of India and sub-Saharan African may not know it but Chris sends a good chunk of the fund’s profits and fees to a foundation run by his wife Jamie, swelling it to $2.5 billion in assets. The foundation then uses leverage of another kind, aiming, for instance, to save kids by saving their mothers.

Eli & Edythe Broad: For Eli Broad to pursue a philanthropic cause, it has to survive one test: “Is it something that no one else is doing?” The Broads find plenty of ideas  – from starting the Broad Art Foundation, a lending library to thousands of galleries and museums, to training superintendents to run more efficient schools. They also fund young doctors medical research that isn’t yet for grants from the National Institutes of Health. All those projects add up; the Broads have given away more than $400million since 1999.

Thomas Siebel: Thomas Siebel launched a programme to eradicate meth abuse in the heartland. Tech billionaire Siebel zeroed in on methamphetamine after a friend in Montana, who happens to be a sheriff, showed him how the homemade drug was devastating rural America. Siebel, 57 years old, bankrolled a massive ad campaign in Montana –2,000 billboards across the state, 61,000 TV spots – to warn teens. Result: Montana dropped from its number five ranking in the country for meth abuse to number 39.

Donna & Philip Berber: After Philip Berber sold his only trading firm, CyBerCorp, to Charles Schwab in 2000 for  $100 million, he and his wife, Donna, focused their philanthropic firepower on just one country: Ethiopia. So far, they have financed 3,600 water wells, 400 schools and 6,500 microloans, reaching an estimated two million Ethiopians. “We’ll spend our lifetime going deep. The longer we spend in the country, the more effective we can be”.

Richard Branson: After launching his own airline to challenge the giants, the British magnate is taking on some of the world’s most intractable social and environmental problems. His Carbon War Room, for instance, rewards individuals and scientists for coming up with new ways to control global warming. The entrepreneurial approach is vintage Branson, who in 2006 pledged all his profits from transportation businesses over the next 10 years – perhaps $3billion – to developing green energy.

John Wood: John Wood inspired by an understocked Nepalese library, now works to get books to poor children. Wood’s mission – get books into the hands of as many kids as possible – “started as a hobby that turned into a passion that became an obsession fairly quickly,” he says. The former Microsoft executive moved from donating books to Nepalese schools to building and stocking entire libraries in nine countries, from Zambia to Laos. By now his programmes have reached more than three million children; he distributes a new book every three minutes.

Arpard Busson: “Arki” Busson, a London-based financier, runs his philanthropic group just like a hedge fund, promising “absolute return” for donors. To that end, he takes a cue from one-time boss Paul Tudor Jones II and makes sure patrons cover all costs, so 100 per cent of donations go to kids. He demands measurable results and gets them: The group has freed 1,700 kids in Eastern Europe from institutionalised care, and ensured that 50,000 children of AIDS patients in South Africa can attend school.

Bill & Hillary Clinton: Clinton amplifies his voice through partnerships; the Clinton Global Initiative challenges governments, business, academics and other leaders to develop innovative solutions to lingering problems. That’s brought about access to schooling for 10 million children, safe drinking water for 12 million, and a reduction of 40 million metric tonnes of carbon-dioxide emissions. Without a doubt, the activities of these persons have improved the lives of those who had the opportunity or privilege to benefit from their donations.

What should be the direction of philantropy? What has, however, been the subject of some debate is how and whether these acts of philanthropy have any real effect on the overall economic development of mankind and whether such development is in any event sustainable. Andrew Carnegie, whom I quoted earlier, is on record as having blamed philanthropy as being responsible for the slow pace of development. Central to this is the issue whether philanthropists should just be concerned and content with the donation of money or items which improve the immediate lives of their recipients or whether all that philanthropic work would not have better effect if directed at charity work which on the long run would bring about widespread economic benefit to a generality of people. 

In this scenario it is arguable for example that a philanthropist rather than donate some specific items to one individual should direct the resources meant for those items to the provision of a means of self- employment for the proposed recipient of the items. If this is done, more persons who on the long run may be employed by the recipient as his business grows would have indirectly benefitted from a single act of philanthropy. It would have had a multiplier effect. The recipient himself would have shed the toga of dependency. 

In one study on philanthropy in Egypt, it was found out that the majority of Egyptians give to charitable causes with a minimum percentage (0.6 per cent) relating their giving or volunteering to activities that would lead to human development as helping people to start projects and depend on themselves. Although philanthropy is high, and there is a promising giving culture in Egypt, the challenge remains how to mobilize these resources to achieve development, and help save local resources from being lost in endless circles of charity that on the long run create dependency and do not achieve whether development nor attempts to solve issues of social justice.