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What Peter Buffett Gets Wrong About Philanthropy

July 23, 2013

By Howard Husock

In what amounts to a mea culpa New York Times op-ed, Peter Buffett, Warren Buffett’s son and overseer of his own philanthropic foundation, denounces the “charitable industrial complex” as little more than a conscience-salve for the rich. His evidence: that there are more non-profit organizations than ever receiving more funds and employing more people–but human suffering nonetheless continues. “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’”. His vague corrective is not, he assures, an end to capitalism– –but an infusion of “humanism”.

Buffett stands in a tradition of heirs to great fortunes uneasy about the source of their wealth–one that dates at least to John D. Rockefeller Jr., who stepped away from the management of Standard Oil. He is not wrong in all his somewhat rambling observations: the idea that material “goods and services” and the capacity to “buy more” and have “more stuff” (in Buffett’s blithe phrase) will not lead inevitably to contentment is surely the case. But having the basics of life surely are a prerequisite to happiness–and, his own angst notwithstanding, there is little evidence that any system other than one based on markets and prices (capitalism) lifts vast numbers out of abject poverty. The billions thus uplifted in China and India over the past generation alone are evidence enough.

Buffett would better have reflected on the possibility that the problem with too much of contemporary philanthropy has not been the fact that it provides little more than a band-aid for big and intractable problems–but that it has become unfriendly to the creation of wealth that provides the resources to solve such problems. In other words, the problem Buffett identifies may not be that philanthropy is inadequate–but that its resources are not being well-directed.

As long ago as 1956, Henry Ford II captured this dynamic well, in his statement of resignation from the Foundation that bears his family’s name. “In effect, the foundation is a creature of capitalism—a statement that, I’m sure, would be shocking to many professional staff in the field of philanthropy. It is hard to discern recognition of this fact in anything the foundation does. It is even more difficult to find an understanding of this in many of the institutions, particularly the universities, that are the beneficiaries of the foundation’s grant programs.”

Peter Buffett provides new examples of just the sort of thinking to which Ford alluded, calling for “systemic change” , to “shatter the current structures that have turned much of the world into one vast market.”

Not only is Buffett far too dismissive of the good that can result when the Kenyan poor have access to cellphones to facilitate commerce–he is far too pessimistic about what philanthropy, well-conceived, can accomplish. Historically, philanthropy, at its best, has used the freedom of donor imagination–unconstrained and undirected by government, which has its own role to play–to prepare those of modest means with the tools of upward mobility, and to create institutions and spur scientific innovations that help in the march of human progress. Think here of the Rockefeller gift that made possible the University of Chicago, the Carnegie libraries, the Rockefeller support for agricultural innovation whose “Green Revolution” alleviated the hunger of millions. To that list, one might add the work of the Gates Foundation–supported, in part, by the Buffett family fortune–in supporting inner city charter schools, which offer the promise that the contemporary poor might compete in today’s demanding, but potentially remunerative, labor markets. Gates’ work in bringing vaccines to Africa, for that matter, are surely valuable by any calculus–but would not be possible without the combination of wealth and charity provided by philanthropy and commercialized science.

In 19th century New York, Charles Loring Brace, founder of the Children’s Aid Society–whose “newsboys lodging house” are the model for the hit show “Newsies”–observed that, at its best, philanthropy supports the “formative” rather than the “reformative”. Contemporary philanthropy–which has focused too much on supporting challenges to the free market economic system and dwelt too much on its shortcomings–would do well to remember his words. Peter Buffet, perhaps inadvertently, feeds a utopian view that philanthropy and charity are the moral refuge of scoundrels and that a new type of human society can both alleviate suffering and provide for mass prosperity. Back in the real world, philanthropy, done right, provides for the incremental improvement in the human condition which actually makes a difference.

Original Source: http://www.forbes.com/sites/howardhusock/2013/07/27/what-peter-buffet-gets-wrong-about-philanthropy/

 

 
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