Get sick, get well
Hang around a ink well
Ring bell, hard to tell
If anything is goin' to sell
-- Bob Dylan

Saturday, July 27, 2013

Peter Buffett has no taste for the 'Charitable/Industrial Complex'

Warren Buffett's son Peter, gets a seat at the power-philanthropy table. But he doesn't like what's being served up. He calls it, "Philanthropic Colonialism".
As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to “give back.” It’s what I would call “conscience laundering” — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity. 
 And with more business-minded folks getting into the act, business principles are trumpeted as an important element to add to the philanthropic sector. I now hear people ask, “what’s the R.O.I.?” when it comes to alleviating human suffering, as if return on investment were the only measure of success.
Peter Buffett's problem is, he's stuck in the middle of the "Charitable-Industrial complex" and can't seem to find a way out.
 I’m really not calling for an end to capitalism; I’m calling for humanism....My wife and I know we don’t have the answers, but we do know how to listen. As we learn, we will continue to support conditions for systemic change.  

1 comment:

  1. I received this response to Buffett's NYT piece, from Karl T. Muth and am printing it without comment of my own.

    I read with interest my friend Peter Buffett’s piece on July 26 (“The Charitable-Industrial Complex”).

    As many stumbles as have been had in the philanthropic sector, the philanthropist has seen marvelous success when compared to the bureaucrat. Arguably the largest victory in government aid spending (the Marshall Plan to rebuild Europe after WWII) cost about a hundred billion dollars in today’s dollars. It was, almost without question, both wildly successful and an essential ingredient to create the transatlantic Western civilization we inhabit today. Compare this to the seven Marshall Plans’ worth of government aid money spent in Africa, with shamefully little effect in economic or social terms.

    Sadly, the Marshall Plan is not seen as a triumph of U.S. aid or U.S. foreign policy because it worked so well. It is seen as a victory because it was followed by two generations of absolute, inexcusable failure.

    I hear the same comments from friends and colleagues that Peter does – “if only these people had clean water” or “if only these kids got vaccinated.” But we need to think bigger-picture: “if only the next Facebook or Google was founded in Country X” or “if only a child in Country Y didn’t die from malaria today, she would become the researcher who would cure malaria” are the provocative ways philanthropists should be – and are finally – beginning sentences. We’ve not only been unimaginative and unambitious ourselves, but we’ve trampled upon the aspirations of others.

    History tells a sad tale of aid. There isn’t a single country that developed and industrialized since WWII because of the kind of aid we give Africa today. Countries like South Africa, India, and Brazil did not succeed because they had more mosquito nets than nearby countries or because their children were fed Plumpy’nut. Countries like Israel, Singapore, and Taiwan did not develop high technology and serious financial institutions because they had lots of boreholes or projects teaching people to make trinkets for Western markets. Here, governments and philanthropists share the blame – they’ve been on the same, generally losing, team. Rather than feeling pity for what people do not have, we must recognize, value, embrace, and build upon the strengths we discover. Too often our “aid” and “charity” have made local businesses suffer, not prosper; our initiatives have ignored local ideas and frustrated entrepreneurs.

    The government has long-recognized that philanthropists are uniquely positioned to fund social and economic (and, increasingly, environmental) projects that may not receive government support. This tacit partnership between philanthropists and government was part of the original reason for Treasury Regulation 170 (better known as the charitable contribution tax deduction). The government would deal with the big issues and the philanthropists would fill in the gaps. As a reward for filling these gaps, philanthropists would receive tax deductions, since they were doing part of the government’s job (choosing to do things for which their tax dollars might be used).

    Due to governments’ failed efforts to help the poor, the philanthropist’s role is larger and more important than ever. The booming growth of the philanthropic sector is not surprising, and probably needed. We do not have the luxury of starting from “square one” – we start from “square 2013.”

    The question we face, in my view, is whether we can be smarter in these choices as we move forward. And, as I think Peter would agree, we must be.

    Karl T. Muth is a philanthropist and a co-author of the forthcoming book Charity and Philanthropy for Dummies. He is a lecturer in economics and public policy at Northwestern University.