Few philanthropists care more about democracy than George Soros … But for Soros, democracy in Czechoslovakia is evidently quite a different matter from democracy in a foundation board room. This contradiction is not at all uncommon among philanthropists. A few years back, during a meeting of the trusted inner circle of the Open Society Institute … there was a protracted argument over some question. Finally, an impatient Soros exerted his authority by saying, “This is my money. We will do it my way.”
Mark Dowie, American foundations: An investigative history
1. Introduction
This is Part 7 of my series on billionaire philanthropy.
Part 1 introduced the series. Part 2 looked at the uneasy relationship between billionaire philanthropy and democracy. Part 3 examined the project of patient philanthropy, which seeks to create billionaire foundations by holding money over a long period of time.
Part 4 looked at philanthropic motivations. Part 5 looked at sources of philanthropic wealth. Part 6 looked at extravagant spending.
Today, I want to talk about donor discretion: the latitude that donors are afforded to make choices about how philanthropic money is spent.
In theory, effective altruists are committed to using reason and evidence to identify the best interventions. In practice, much of the available funding is controlled by a small number of actors including prominent donors – most recently, Sam Bankman-Fried, and now Cari Tuna and Dustin Moskovitz. What these donors consider worth funding has a sizable influence on what actually gets funded.
Today’s post uses historical comparisons to the Christianization of Roman philanthropy as well as Gilded Age philanthropy in the United States to begin to think critically about the discretion afforded to wealthy donors in shaping philanthropic priorities. In particular, I suggest, philanthropists exhibit important conservative biases that may explain some of effective altruism’s muted reaction towards institutional critiques of effective altruism. And more broadly, philanthropists tend to favor many of the same views and practices that brought them success in industries which differ importantly from the areas to which they turn their philanthropic focus. It is not obvious that this tendency to project methods from one domain onto another is a healthy feature of philanthropy.
There is much more to be said about the role of donor discretion in philanthropy. The rest I will save for the next post in this series.
2. The Christianization of Roman philanthropy and beyond
One theme of this series is that it is important to think about philanthropy in historical context. For example, in Part 3 we looked at the excessive growth of Ottoman waqfs as a warning sign about the dangers of unchecked patient philanthropy. Today, I want to look at the progressive Christianization of Roman philanthropy in the 4th-6th centuries of the Common Era as a lens into questions about donor discretion: who has the discretion to decide how donated money is spent? What kinds of personal and institutional power come along with this discretion?
Peter Brown is Philip and Beulah Rollins Professor of History at Princeton University and an eminent scholar of late antiquity. His book, Through the eye of a needle: Wealth, the fall of Rome, and the making of Christianity in the West, 350-550 AD, chronicles a fascinating change in Roman philanthropy in the fourth, fifth and sixth centuries C.E.
Traditionally, Roman philanthropy was given by wealthy individuals in the form of gifts to the city. Bread and circuses were de rigeur: wealthy landowners often funded public entertainments, and sometimes also distributed limited amounts of grain. But philanthropists did not typically give to religious institutions, and they did not provide a broad form of support for the poor:
The majority of the upper-class inhabitants of the Woman West were still encouraged by long tradition to show generosity to their cities and to their fellow citizens—not to the churches and still less to the poor.
By giving gifts to the city, Roman philanthropists showed and consolidated their own personal power in the region. Public benefactors were, by and large, leaders of the community, and leaders were expected to be benefactors.
The Christian bishops attacked what they saw as a wasteful and distracting focus on entertainment and other public goods. True giving, they argued, was for the poor. Here again is Brown:
The Christian bishops constantly complained that money lavished by the rich on great buildings and on flamboyant games should have been spent on the poor. The one was driven by mere love of display, while Christian generosity (so the bishops claimed) was driven by compassion.
Over the course of several centuries, the Christian focus on giving to the poor won out over previous emphasis on giving to the city.
Now, donations were not made directly by the benefactors, but indirectly by benefactors to the Church, which would then further disperse funds. Now benefactors received a different benefit from their giving: not personal power, but the hope of salvation. Power, in the form of discretion to spend wealth, accrued to the Church. The Church’s newfound wealth fueled its expansion, funding churches, priests, and even armies.
The accumulation of Church power through the discretion to spend philanthropic wealth has not been lost on critics of philanthropy. Here is Theodore Lechterman, summarizing Brown:
In the late classical period, Church entrepreneurs effected a shift in attitudes toward charity. They mounted a concerted campaign to appoint the poor as the proper objects of donation. Though the rhetoric was moral, the motivations were more prudential. By proclaiming itself steward of the poor, and accepting donations in their name, the Church succeeded in consolidating its own power in relation to the declining empire.
Modern times have seen the rise of a new form of giving, in which donors give neither directly to the city nor directly to the Church, but rather indirectly to a large philanthropic foundation. Because law and tradition often give donors a great deal of discretion in influencing how their donations are spent, this allows donors, like the Church, to accumulate a great deal of influence, not merely in the form of personal power, but also in the form of ability to influence policy. For example, here is Rob Reich
We should view philanthropy, especially big philanthropy in the form of private foundations, as an exercise of power … The larger the foundation, the greater the potential power. Think here of Bill Gates, whose philanthropy permits him to stride upon the world stage as if he were a head of state.
As modern philanthropy gives billionaires the power to remake the world at their own discretion, we should ask how philanthropists exercise their discretion and what type of a world they use that discretion to create.
3. Remaking the world in their own image
Philanthropists have historically sought to remake the world in their own image, turning to the methods, views, or personnel that made them successful as a guide to tackling society’s most pressing problems.
Sometimes, this can be a healthy influence. For example, the Gilded Age in the late 19th Century saw an increased role for female philanthropists, who often used this role to advance causes neglected by a patriarchal society. David Sloane’s work chronicles the important role of female philanthropists during the Gilded Age in the construction of children’s hospitals, an area of medicine previously neglected by male philanthropists. And Kathleen Waters Sander’s study of Mary Elizabeth Garrett tracks the instrumental role that Garrett’s philanthropy played in advancing women’s education and women’s suffrage.
There were, of course, some drawbacks to the influence of elite philanthropists in the Gilded Age. For example, as later waves of feminists would emphasize, the suffrage and education promised by 19th-century philanthropists was too often reserved for white women of a certain class. But it is also important to emphasize that donor discretion can, in such cases, allow philanthropists to make substantially better decisions about the allocation of public goods than those made by society at large. Some suffrage and education for women is better than none.
At the same time, donors too often use their philanthropy to force their own views, practices and life histories upon others. For example, in the late nineteenth and early twentieth centuries, Jewish immigrants to the United States found that success in business required them to assimilate to prevailing cultural norms and secularize or moderate many traditional religious practices. Successful Jewish philanthropists then took to distributing housing, food and other necessities to newly arrived immigrant families. However, too often these endeavors came at a price: they promoted, or even required forms of cultural and religious assimilation. Because philanthropists had made their fortunes by assimilating, they decided that new arrivals would benefit from assimilating as well, and used their leverage to force that choice upon new immigrants.
In modern times, the same complaint has been lodged against tech-driven interventions in public schools. Overcrowded and underfunded school systems know how to teach their students: what they need, by and large, is money for facilities, teachers and programs. Instead, wealthy tech entrepreneurs insist on `disrupting’ entire school systems by promising transformative gifts, provided that the systems agree to large and expensive technology-driven restructurings of the curriculum. The results have been mixed, and even when they are good, one wonders whether technological solutions are favored on the basis of reason and evidence, or because they are salient, familiar and beloved by donors. These interventions also undermine the responsiveness of schools to key constituencies such as governments and parents.
Today, we see much the same pattern. Philanthropic movements such as effective altruism, funded by wealthy Silicon Valley donors, promote many of the same views and practices that made their donors successful as solutions to global problems. For example, here are some views that effective altruists share with Silicon Valley:
(1) Progress in artificial intelligence is the most transformative development facing humanity today, and possibly the most transformative development in human history.
(2) Long-shot investments are worth funding because they sometimes produce outlandish returns.
(3) Data- and technology-driven solutions are to be preferred when possible.
(4) Small teams of highly-trained individuals are well-suited to making disruptive breakthroughs on major problems.
(5) It is not always necessary to make an extensive and detailed study of competing perspectives and approaches before setting out to solve problems in a new way.
These views are popular in Silicon Valley for a reason: they have served technology entrepreneurs well, helping them to become wealthy and bring genuine progress and change within many sectors of society. Now, the question is whether these views will serve other problems in society equally well.
On the face of it, there is room for doubt. Why should the views, practices, methods and people that made today’s technology entrepreneurs successful be any better suited to solve unrelated problems than the views, practices, methods and people that drove women’s philanthropy in the Gilded Age, or Jewish philanthropy in the early twentieth century?
Just as today’s philanthropists might want to pause and reflect on their desire to seek technology-driven disruptions to public schooling, philanthropists might also do well to pause and reflect on their desire to project a wide range of other views, practices, methods and personnel decisions onto all of the world’s problems.
4. Conservatism and the institutional critique
If there is one thing that wealthy philanthropists almost never do, it is to challenge the institutions that create and sustain their wealth. This is not to say that philanthropists are driven primarily by selfish motives, but rather that even the best of us find it hard to conclude that the institutions which created and sustained our wealth could be bad.
Indeed, one of the most interesting parts of Brown’s work is his commentary on the evolution of church attitudes towards wealth. Whereas the early Church had been profoundly critical of the excesses of wealth, a newly cash-rich Church changed its mind. As Brown puts it, in the fifth century:
Radical critiques of wealth were abandoned. Rather than denouncing the evil origins of wealth and insisting on its total renunciation, writers of the fifth century came to emphasize how wealth could be used to consolidate the Christian community. In major cities, such as Rome, the outreach to the poor, which had once taken the form of care only for the destitute, slowly but surely changed its function so as to embrace the care of average citizens in times of stress.
We see much the same development in late 19th and early 20th century American philanthropy, as industrialists with vast and newly minted fortunes decided that wealth was a thing to be praised. Perhaps the clearest example is Andrew Carnegie’s “The gospel of wealth.” At a time when rapid industrialization combined with limited legal protections for workers and consumers created great fortunes at no inconsiderable public expense, Carnegie answered complaints about his own business practices and the system that created them by declaring the system to be the best system there was.
The price which society pays for the law of competition, like the price it pays for cheap comforts and luxuries, is also great; but the advantage of this law are also greater still, for it is to this law that we owe our wonderful material development, which brings improved conditions in its train. But, whether the law be benign or not, we must say of it, as we say of the change in the conditions of men to which we have referred: It is here; we cannot evade it; no substitutes for it have been found; and while the law may be sometimes hard for the individual, it is best for the race, because it insures the survival of the fittest in every department.
I suspect that even many conservative readers today would disagree with Carnegie’s claims. Workers and consumers now enjoy substantially better protections than they did in Carnegie’s day, and society is better off for it. Indeed, many of the practices which Carnegie terms `competitive’ would today be considered anti-competitive, bordering on monopolistic, and we would not hesitate to stop them.
This tendency for wealthy philanthropists to fail to challenge the systems that create and sustain them leads to trouble when it is those very systems that need to change. One clear example is climate change. In an age of rapid and devastating climate change, Silicon Valley is becoming an increasingly large contributor to global emissions. Most of the wealthiest contributors to effective altruist causes have been quite hesitant to take steps to address climate change, despite their own contributions to the problem.
More broadly, I think that the difficulty which philanthropists have in critiquing the systems that create and sustain them may explain much of the difficulty in conversations around what is often called the institutional critique of effective altruism. Many early critics of effective altruism asked effective altruists to consider the possibility that structural features of the global social, economic and political system may be largely responsible for the ills such as poverty and disease that effective altruists at the time sought to resolve. While they praised philanthropists for their willingness to address these issues, they suggested that a permanent solution might involve taking a close look at the very structural features of the system which make such abject suffering possible in a world of plenty.
Although effective altruists did engage in detail with the institutional critique, much of the response was decidedly unsympathetic. It is worth considering if the social and financial position of effective altruists might have something to do with this reaction – not because effective altruists are greedy (they are not), but because most of us find it hard to think ill of the institutions that raised us up.
5. Conclusion
Today’s post looked at the role of donor discretion in philanthropy. For some years now, a large share of funding for effective altruist causes has been provided by a small number of wealthy philanthropists. This gives those philanthropists great discretion to shape how money is spent, and we should think carefully about the costs of that discretion.
This post used historical comparisons to early Christian philanthropy as well as Gilded Age philanthropy to raise two concerns. First, donors often carry the views and practices that made them successful into new areas where those views and practices may be less appropriate. Using reason and evidence to set global priorities means thinking carefully about best practices, which is not the same thing as spreading practices common in Silicon Valley across the globe.
Second, donors take a conservative stance towards societal institutions which create and sustain their wealth. It is very hard to convince wealthy philanthropists that the institutions which brought them wealth and power might be the cause of many of the same ills which their philanthropy seeks to address. While there is room for open debate about this and other institutional critiques of effective altruism, it is important to recognize that the position from which wealthy philanthropists enter into this discussion is a difficult one from which to conclude in favor of many types of structural change.
There is a good bit more to be said about donor discretion. The rest will have to wait for the next post in this series.
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