Many people are asking me this question these days. While it may seem rhetorical, the answer is as plan at the question : because it matters. Private philanthropy in the U.S is in the range of around $ 316.23 billion from individuals, corporations and foundations. This is more than the combined GDP of Nepal, Sri Lanka, Vietnam, Costa Rica and a few other countries in Latin America.
Charitable giving and Philanthropy are as much a sociological phenomenon in the U.S as they are economic ones. Philanthropy also lies at the intersection of social policy, economics, religion, and politics and not to forget entertainment (with all those celebrities lining up to start foundations). For the cynic, all I have to say is: Start believing in the power of philanthropy, lest you be left behind!
There are four key reasons why this field needs careful attention:
- Growing importance of philanthropy in society
- Decreasing role of the state
- Development goals: both local and international
- Increasing role of religion in the public sphere
1. Growing importance of Philanthropy in Society
Given that I live and study in the U.S, I will talk a bit about American giving behavior. The country has been shaped by influences from various countries, cultures and religions. In this sense, it is truly a “melting pot” of philanthropy. One can see Native American influences, African American, Jewish, Protestant, Catholic and Muslim influences all around the country – if only one observes carefully. The spirit of generosity is quite high in the country, and this is in fact encouraged by the government, which gives tax incentives to formation of non-profits and also charitable giving – one of the more controversial aspects of this act.
With billions of dollars coming into the sector, with the world’s richest billionaires such as Warren Buffet, Bill Gates having pledged half of their wealth in philanthropy during their lifetime, this sector is all set to grow in the years to come.
2. Decreasing role of the state
This is related to the point above. There is a growing realization on part of those in power that resources are getting constrained and someone has to provide for the needs of the vulnerable. Since the Reagan era in the U.S and Thatcher in the U.K, social welfare policies have generally gone South. This has put enormous pressure on religious groups, nonprofits and others whose job it is to “care” for the less fortunate.
In a stinging critique of this phenomenon, Peter Buffet recently wrote an Op-Ed in the New York Times, that calls it the “Charity-Industrial complex,” an indictment of the corporate world and also the government. No matter what one’s position on this issue, politically or ideologically; everyone agrees that there has been a dramatic reduction in the role of the state and the social contract is undergoing a change. This calls for new actors to step up and take charge. Mr.Buffet here argues (has quite rightly, in my opinion) that the private sector (including philanthropists) simply don’t have the resources that the state apparatus has, at its disposal.
3. Development goals, both local and international
Increasingly, development goals are being articulated in terms of private actors’ agency. An increase in charitable giving to further overseas development would help fund the attainment of the Millennium Development Goals, to which the world’s nations are committed.
Initiatives such as the Millennium Challenge Corporation, led by the U.S government have sprung up to help developing countries fight poverty. Corporations have also put their hat into the game. As a recent CECP report points out:
- Median total giving in CECP’s sample was $21.02 million
- 60% of companies gave more in 2011 than in 2009
- 83% of companies offered at least one matching gift program
- 85% of companies had a formal domestic employee volunteer program; 47% had a formal international volunteer program
- 82% of companies reported having a corporate foundation
- Health, education, and community and economic development were top priorities for the typical company
- 46% of total giving was through direct cash
Increasingly, private foundations are doing what governments of countries are supposed to be doing – eradicating polio, handing out food packets in disaster zones or vaccinating against Malaria
4. Growing role of religion in our society – Whether we like it or not, religion is making a come-back in the public sphere. This “de-secularization” of religion, as many scholars have called is being seen in the realm of faith-based nonprofits, increased interest in religious discourse (not among all segments of society) and there is a growing realization among both academics and policy makers that perhaps the rigid dichotomies that we hold about the religious and secular are not so rigid, after all. As John Rundell points out in his short essay : “It can be argued that the Durkheimian problem of the sacred is a way of suggesting that no society can “live” without a sense of its sacredness irrespective of whether this is couched in either ‘religious’ or ‘secular’ terms.” Indeed, one can argue that many of “secular” non-profits operating in our midst have a very religious orientation to their work, if one pays close attention to their work. This is reflected in the realm of philanthropy too, with Americans giving about 1/3 of their charitable giving to religious Institutions ( Giving USA 2013).
The biggest contribution that a closer study of philanthropy can offer is by helping identify how both individuals and groups of individuals (organizations, societies) conceptualize, use and (sometimes abuse) charity. These insights can form the core learning process for articulating social policies, development paradigms and also social movements.
It is a fact that charity and philanthropy offers those involved in it a meaningful way to engage in society, and a sense of agency and empowerment. But the tensions between who is responsible for others welfare and whether charity is a right or an obligation (as scholars such as Abdullahi An’ Naim have pointed out) are not fully resolved.
Are we any wiser or better off with the involvement of the nonprofit sector in the development/social welfare debate? These are hard questions that have no right or wrong answers. As Mr. Buffet points out, (in the NY Times Op-Ed cited above): “Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left. There are plenty of statistics that tell us that inequality is continually rising. At the same time, according to the Urban Institute, the nonprofit sector has been steadily growing. Between 2001 and 2011, the number of nonprofits increased 25 percent.” This is the irony of the situation that we are facing.
Does it mean we should throw up our hands and start calling for just “market-led” solutions and ignore the power of goodwill, religious giving and good old-fashioned philanthropy or even questioning the role of the state in this mix? I think that will be unproductive, as well.
The solution, in my opinion is to identify creative projects, people and solutions that work. Not just in theory, but also in practice and build multiple networks of actors, across the board to solve these problems, because as Mr.Buffet and other thoughtful leaders have pointed out, the problem is us – and we need to solve it ourselves!
We are part of the problem and also the solution, and the ideas for solving these problems can come from our deepest held beliefs and convictions in working for a better world. I believe a deeper study of charity and philanthropy can offer us just that.