Inclusive philanthropy in the New Gilded Age

In July this year, 3 000 people streamed into a hall in Mamelodi and more than 300 000 logged on to Facebook to listen to Bill Gates deliver the 14th Nelson Mandela Annual Lecture. Gates delivered the lecture as the founder of the Bill and Melinda Gates Foundation (BMGF), an institution unrivalled in wealth and power.

However, the very nature of philanthropic mega-foundations such as this is being contested as they become increasingly political.

South Africa’s philanthropic institutions have been relatively insulated from such debates, but there is a growing distrust of the motivations of many funders.There is also an attempt by the state to regulate civil society under the premise that local nongovernmental organisations (NGOs) and those that fund them can be a destabilising force.

Following interaction with students, civil society and academics, the Nelson Mandela Foundation hosted a dialogue on 'Philanthropy in the New Gilded Age' in October, to discuss these issues. This report focuses on some of the key themes of the proceedings.

In a session on the role of philanthropy in modern society, participants said it was difficult to group together charitable organisations, because of  their varied histories, missions and personnel.

There was a call for a reimagining philanthropy, and agreement that the structural conditions that lead to the need for and existence of philanthropy are ethically and morally reprehensible. Encouragingly, throughout the discussion every organisation admitted its flaws and mistakes, and many explained how monitoring and evaluation had changed their organisational models as they developed.

While all foundations were cognisant of their power, it was pointed out that the figures in relation to government budgets are often small (for example, the Ford Foundation in South Africa distributes US$14-million and the Raith Foundation R65-million annually, compared to a South African budget of more than $100-billion).

Given the fairly limited amounts of money available to civil society organisations compared to the state, there was recognition that they cannot replace or replicate the work of the state. For example, while philanthropic endeavours can lead to a school being built, they cannot take over the government’s role in maintaining the Department of Education. Also, much of the work done by philanthropists can be undone by the state. For example, if a philanthropic organisation seeks to provide entrepreneurial education and start-up finance to small businesses, their efforts can be undone quickly by a government that doesn’t create conducive conditions for entrepreneurship.

It was acknowledged that when philanthropic foundations supported smaller operations it could happen that the smaller entity became increasingly bureaucratic , or that radical actors were hindered. This happened in the United States when the Ford Foundation tried to curb the Black Lives Matter strategy of civil disobedience. Another concern was the reliance of NGOs on funding, which meant that philanthropic organisations wielded a level of power over them, which could have undesirable consequences, such as organisations being forced into coalitions with other organisations at a funder’s request. Another concern was the jostling for funding that sometimes marred relationships between civil society organisations.

It was agreed that a reimagining of philanthropy should ideally focus on a decentralisation of power. And while there are already various forms of this philanthropy in South Africa, there needed to be less reliance on foreign funders and high-net worth individuals. In the US, for example, only 14% of funding comes from wealthy donors.

There was an acceptance that philanthropy and foundations would never be  “silver bullet”, but that they could play an important catalytic role as a potential force for good, although they were not intrinsically good.

In a session on business and philanthropy, it was argued that businesses, and particularly large concerns, had a moral and a legislated responsibility to effect positive social change and engage with their social environments. Yet, in South Africa, companies have been accused of exploitation, unfair extraction and duplicity in their dealings.

Weighing heavily in the background of this discussion was the spectre of Marikana and the fact that platinum producer Lonmin was able to obtain excellent reports for its corporate social responsibility (CSR) efforts before the 2012 killings, and that even afterwards  it has arguably evaded its obligations to workers.

It was pointed out that philanthropic foundations can potentially subvert business accountability by allowing them to use CSR as a front while engaging in activities that may not be in the public interest. For example, certain foundations have supported and protected intellectual property laws, which in turn can make medicines difficult to obtain.While companies came under criticism, those representing them explained how some of their efforts, aimed at restructuring society, were stymied by the state. The way mobile phone-based money transfer system M-Pesa was taxed, for example, damaged its ability to reduce inequality by allowing cheap money transfer between people.

Company representatives also explained that there was an economic incentive to keep communities sustainable. There was concern from those in business that many criticisms “throw the baby out with the bathwater”, and that business was often dismissed and excluded from conversations. It was noted that companies in South Africa understand the landscape and the legislation of the country and are often local organisations that . They wanted to see the country prosper. It was also pointed out that there is a still “economic apartheid”, and challenges for those who are poor and in rural areas. Companies therefore needed to focus on working with the state to provide solutions to various social problems.

The final session looked at those who are already  trying to do things differently. A recent graduate argued that because bursaries and scholarships often come from funders intending to develop skills for their specific sector, this can lead to manipulation and the exclusion of those with other interests. The entire curriculum may be structured toward corporations rather than a holistic, society-centric education.

In conclusion, there was a call to realise that the fourth industrial revolution was a reality. Education systems needed to drastically change. The best candidates should become teachers and be suitably remunerated. Furthermore, businesses should focus on the communities in which they operate.

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