When billionaires want to save the world3 min read . Updated: 20 Nov 2017, 03:11 AM IST
Philanthropy can be a force for good, but it must be accompanied by state support and local stakeholder buy-in
Sean Parker was just 19 years old when he co-founded Napster in 1999. The peer-to-peer (P2P) file-sharing network changed the shape of the global music industry, for better and for worse. Its P2P structure has served as a template for any number of digital businesses since. Parker’s bracingly irreverent 2015 essay on “hacker philanthropy" in The Wall Street Journal displayed that same audaciousness. It was a manifesto for a new breed of tech billionaires with a new kind of philanthropic ambition: Think big, take risks, and aim for the systemic change older generations of philanthropists were too cautious to target.
The new Co-Impact initiative launched last Wednesday is meant to target precisely that kind of change. It is born out of the Giving Pledge—Bill Gates’ and Warren Buffett’s 2010 pact which around 170 billionaires have now signed on to, promising to give at least half their fortunes to charity. Co-Impact is aimed at providing the expertise and linkages necessary for channelling such big-ticket philanthropy towards equally big-ticket projects that have usually been the province of states: global health, education, equality and the like. And it has enough big names on board—Bill and Melinda Gates, former eBay president Jeffrey Skoll and Infosys co-founder Nandan Nilekani, among others—to give it heft.
This scaling up has been on the cards for a while now. Tech money might not dominate the global billionaires list yet, but it’s getting there fast. That money comes from iconoclasm and disruption. Little wonder, then, that tech billionaires like Gates and Mark Zuckerberg are porting the same ambitions of fundamental, systemic change to their philanthropic work. Zuckerberg’s wanting to eradicate, manage or control all disease, for instance, is not philosophically very far removed from his wanting to connect the world.
Such ambition has benefits. Take the US. It is the most charitable country in the world as a percentage of gross domestic product, and therefore, given the size of its economy, in terms of volume. Last year, it saw almost $400 billion given for philanthropic purposes. The bulk of this, by far, comes from mega-donors. A move towards long-term global agendas in areas such as vaccination, malaria eradication and primary education, driven by rigorous data analysis—randomized control trials have become the gold standard over the past decade or so—stands to maximize value for money and minimize opportunity costs.
India is a good example of another important benefit. Individual philanthropy here has grown rapidly over the past decade, outstripping corporate social responsibility funds and foreign aid handily. Bain’s “Indian Philanthropy Report 2017" notes that individual philanthropists contributed Rs36,000 crore in 2017, a sixfold increase from Rs6,000 crore in 2011. These donations account for an increasingly substantial chunk of total development expenditure. Designing this philanthropic intervention for maximum impact is essential. Co-Impact pledgers like the Bill and Melinda Gates Foundation and Nilekani, which are active in India, can be useful in multiple ways here—from building the linkages necessary for innovative development solutions to access funds, to championing a move towards more data-driven philanthropy.
Big ambitions, however, come with big risks. In The Givers: Wealth, Power, And Philanthropy in A New Gilded Age, David Callahan points out that the new breed of elite philanthropists are increasingly becoming what he terms “super-citizens". Their philanthropic agendas allow them to shape public policy across countries in a way common citizens could never aspire to. Those agendas don’t always overlap with those of local communities. Money spent on long-term systems change with no immediate pay-off is money no longer available to humbler charities and non-profit organizations that tend to do the stuff that binds communities together, from feeding the poor to sheltering the homeless and abused.
This can foster a sense of civic disenfranchisement—the flip side of private solutions to public goods problems. After all, citizens have a vote in the state that is traditionally supposed to address such problems; this can often seem mere symbolism, but it is essential nevertheless. The lack of this—mixed with the resentment towards tech companies in developed economies for job automation, outsourcing and tax avoidance—can make for a toxic brew.
The promise of the systems change agenda must, therefore, be handled carefully. Rajiv Shah, president of the Rockefeller Foundation which has backed Co-Impact, is reported by the Financial Times to have said, “We live in a world that is fractured and, in Europe and the US, globally minded elected leadership is threatened or counterproductive. The world needs philanthropy to step up in a big way." True, but incomplete. Without transparency and reasonable regulations on issues like tax deductions for philanthropy, adequate state support and local stakeholder buy-in, changing the world will remain the stuff of technologists’ fantasies.
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