What Bill Gates and Bob Geldof can teach us about philanthropy
There are mixed motives in philanthropy and mixed outcomes. But it’s an essential force in our society.
Paul Vallely tells a nice story about rock star Bob Geldof to illustrate why philanthropists need to listen before deciding where to put their dollars.
A journalist, Vallely was with Geldof in Ethiopia 25 years after the original Live Aid concert of 1985 that raised millions to arrest the famine that had swept the country.
The locals at Korem were delighted when Geldof came to visit. They were pleased with the progress and most of all with the fact the West had stood beside them and recognised their human value. Geldof asked them what else they needed. The answer was simple. One million people had died in the famine in the Ethiopian highlands and many were buried in huge grounds nearby. The locals were unhappy — there was no fence and the cattle grazed on the graves of the dead, something deeply offensive to Muslims and Christians alike. They had asked government and aid agencies for money but had been brushed off: there were better things to spend money on, they were told.
Says Vallely: “Geldof was a bit of an autocrat anyway and he said he’d build the fence for them. The Band Aid songs were still bringing in royalties, so he used those. (The Band Aid recordings have raised an estimated £115m over the past 35 years).
“They were more pleased about the fence than anything. It was what they wanted. The overall lesson for philanthropists, whether companies or individuals, is to listen to the people you are helping and if they don’t want what you think they want, then change. Respect and change.”
That’s basically the message of his book, Philanthropy: From Aristotle to Zuckerberg, published by Bloomsbury late last year. It took Vallely six years to write and is a comprehensive look at the history as well as the value of giving — its ups and downs — and the complexities of a sector increasingly dominated by the money of the mega-rich.
Vallely traces the history of philanthropy from the Greeks, who gave us the word and ran a system under which the rich were expected to fund anything from writing a new play or sending a team to the Olympic Games to funding a warship or a temple. “Only the rich did it, there was a top down thing, and there was peer group pressure,” Vallely says. “It was social cement, it cemented in the social hierarchy. About the same time in what is now Israel, Jews came up with a religious idea that all men were created equal in the image of God. It was revolutionary and it developed a notion of community rather than society. It was two-way, everyone had a responsibility to everyone else.”
This idea of social justice and reciprocity has intertwined with the Greek tradition, down the centuries, he says. “For 1000 years it was the Jewish version that dominated … throughout Christendom from the fourth to the 14th century there was a system of charity based on the idea that you had a religious responsibility to look after the poor,” he says. “It was institutionalised in tithes, monasteries, medieval guilds which looked after their own members and the poor.”
There was “casual” giving in the street to beggars and an emerging mercantile class led to a new phenomenon of charitable bequests. Kings and aristocrats had always given bequests but it was now much more widespread.
The Black Death — a pandemic like COVID-19 — changed everything because there were fewer people to work the land. There was more money to be made from enclosing land and as Vallely puts it, “the skids were under feudal society”. The poor were more empowered and were soon seen as a threat to social stability.
Says Vallely: “People who had been tied by feudal responsibility went off to work for other people and some could not find work and there was a wave of vagabond beggars … suddenly poverty was your fault and the idle poor a threat to society.”
The middle classes began to take over the work of charity from the churches then the state became interested. Almost every monarch till Victorian times had a poor law under which the poor were helped just enough to survive and to prevent them becoming a problem to society.
Vallely points out that there were always some with a broader approach: Cadbury’s, for example, was owned by a Quaker family whose members were “prepared to allow philanthropy to change the way they did business whereas modern business wants to change the way we do philanthropy”.
At the end of the Victorian era, there was a realisation that the changes wrought by the industrial revolution could not be handled by philanthropy alone and the welfare state began under British prime minister David Lloyd George in the early 20th century.
Says Vallely: “All the way through history you see an interaction between the rich as a plutocracy trying to maintain their position; religion; and the state saying there is a bigger interest involved, and more recently the interaction of business and the mega-philanthropy of the tech giants. There’s a three-way dialogue between politicians, rich people and business.”
The model that most rich capitalists follow is that developed by American industrialist Andrew Carnegie who was the richest man in the world in 1901. Vallely says Carnegie’s ideas were rooted in social Darwinism — the rich were innately superior and should decide what should be spent on the poor.
‘I don’t see any problems with the rich using their money where they want to, but I do think they need to listen and not carry on with the Carnegie model of ‘we are rich and so we are better’’
—Paul Vallely
“There was no notion at all of social justice,” Vallely says. “It was all about cultural infrastructure and bringing business methods to bear on philanthropy. Carnegie invented the philanthropic foundation and that is essentially the model Bill Gates inherited — it was a hyper refinement of the notion that the people who solved the world’s business problems could solve its social problems. Missing in all this is the Jewish tradition, that you have to treat people with respect, listen to them, don’t tell them what’s wrong.”
Gates, says Vallely, is one who has learnt to listen and has changed his approach dramatically from his early philanthropy when he thought he was the “clever one” who could solve problems. Vallely credits much of the change in his approach over the years to his wife Melinda Gates who was more of a “people person”.
MacKenzie Scott, Amazon founder Jeff Bezos’ ex-wife who is worth about $US62bn and has embarked on a massive giving program, exemplifies the new era of philanthropists who listen to the wants of those they are trying to help.
Vallely is less impressed with Facebook founder Mark Zuckerberg who uses donor-advised funds as the mechanism to distribute money. The system has been criticised as not sufficiently transparent.
“He (Zuckerberg) says it will do good more efficiently,” Vallely says. “But who knows?”
To the longstanding criticisms that philanthropy is not very democratic and that social endeavours should be funded by taxes, not donations, Vallely says: “I don’t see any problems with the rich using their money where they want to but I do think they need to listen and not carry on with the Carnegie model of ‘we are rich and so we are better’ and there is still a lot of that around.”
He points out that social surveys show the rich have different values from the rest of us: they are much more liberal on social areas and more conservative on economic areas; they are “hard on welfare and environment”. So while they have a right to give money, they have a responsibility to think about the wider impact, he argues.
Democracy is an issue when a government matches donated money for a project initiated by a donor, who might threaten to take his or her money elsewhere if the government does not play ball. Voters might prefer a different project. There is a similar problem if a donor gets a tax cut so the donor might give a $10m grant but in effect could get a $4m tax break paid for by taxpayers.
It’s a “democratic deficit” but Vallely says there is also a democratic plus if a philanthropist chooses to fund smaller organisations in the third sector which aim to change society and apply leverage in the political sphere, for example funding Black Lives Matter groups. This approach had increased during the pandemic: “People think, we can’t stick with the same rules so racial justice groups are being funded in ways where they are not having to jump through hoops and evaluations.”
In the past, rich people gave money to many organisations but often wanted to “tame” them so they were less radical. But Vallely sees a new awareness among philanthropists on these issues. He says philanthropy is always driven by an impulse that is “personal to you and I think that is right because when you get out of that and you go to the effective altruist movement which says you should measure everything by the data and only give to those that are most efficient — you see some egregious (results),” he says.
‘My personal ethic is there is something deeply inhuman about … turning your back on people’
— Paul Vallely
The effective altruism philosophy is advocated by philosopher Peter Singer and argues we need to apply analysis and reason to decisions. Vallely says it can work when the issues are simple but not in more complex change programs.
He cites a case where a donor decided not to fund a health program in Africa because the money would go much further in funding cataract removals in other countries.
“My personal ethic is there is something deeply inhuman about … turning your back on people,” Vallely says.
Three quarters of philanthropic foundations were created in the past 20 years with the rise of mega-rich giving. Vallely says that while there is no direct causal relationship with globalisation, there is a clear correlation between globalisation, a rise in inequality and a sense among some philanthropists who have benefited hugely from globalisation that they need to give something back. And clever entrepreneurs have found ways to make charity work for them so are more open to giving,
Vallely became deeply invested in the subject of philanthropy when he went to Ethiopia to cover the famine and travelled through Sudan, Chad, Niger and other countries. He realised their biggest problem was not drought and famine but that they were all “in hock to the IMF and the World Bank”.
He began the book thinking charity was old-fashioned but found a “hugely complicated picture of mixed values and motives, areas where philanthropy was malign and where it was benign, where it could weaken democracy and where it could strengthen democracy”.
Overall he believes philanthropy is an essential countervailing force, a third leg, in a society dominated by government and business. Some people argue it should be “taxes, taxes, taxes”, but Vallely says we also need philanthropy “because no matter how many dollars are put into the health system, who is going to pay for the clowns to go into the children’s wards? But we need an awareness about keeping these things in balance and making sure they are working together. Philanthropy is part of the solution, not part of the problem.”
What does he want to see now?
“I want a thousand flowers to bloom because all the different aspects — workers giving their time, crowd funding, fundraising in the workplace, corporate social responsibility, individual donors — all have their virtues and downsides and you need them all to counterbalance each other.”