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Does Philanthropy Work?

January 22, 2020
Hilary Pearson

This month the BBC hosted a thoughtful panel conversation on the topic Does Philanthropy Work? The question posed to the panel was “Should the rich give more of their money to the state instead of to charitable foundations?” This is a perennial question. Is it more effective, more democratic, more equitable, to tax the wealthy and redistribute to the public through government? Or should the wealthy be given tax incentives to create public benefit through private philanthropy? Can philanthropy really work as well as the state to create public benefit?

On the face of it, the answer is that the state is the most democratic mechanism for assuring public benefit. But we have all seen instances where state action alone does not lead to less inequality, or fairer access to services or more efficient distribution of resources. For most governments, the tolerance for innovation and its risks is low.  Government is rarely able to innovate or change a system without external catalysts or models. This suggests, as did one of the BBC panelists, Melissa Berman of Rockefeller Philanthropy Advisors, that the answer to the question “either the state OR philanthropy”, is: ”yes AND…”

What does “yes AND” mean?

Yes, the state (government) is inarguably more democratic, at least in theory, in its distribution of public benefits. And….philanthropy can play a role in holding the state accountable, in supporting and convening the unrepresented or those whose voices are not heard.

Yes, government has inarguably more scope to deliver services on a broad scale and with resources that far outweigh private resources. And….philanthropy can act to close gaps and to assure access to services for those who are marginalized.

Yes, government can work across a whole social system. And…philanthropy can fund innovation and adaptation that can lead to greater impact at scale.

All of this assumes that private philanthropy accepts responsibility for its own effectiveness, accountability and engagement with those who are typically not represented in elite decision-making. The answer “yes and…” works only if private donors are mindful of the fundamental questions of social justice that the state must also confront. As one of the BBC panelists said, philanthropy is at its best when it is not simply about generosity but about justice.

Yet doesn’t private philanthropy arise from the rewards of an unequal system? How can philanthropy challenge an unjust system that has created it? While there is some truth to this, private philanthropy has demonstrated its capacity and will to address inequality or challenge systemic biases. It takes risk, rigour, and resources committed for the long-term. It’s challenging…but not impossible. To quote Rip Rapson, CEO of the Kresge Foundation in Detroit, some of the most valuable work that private philanthropy can do is to deconstruct social problems and put them back together in a different way that shows communities and governments the way to move forward. .

A view from India

I have observed examples in Canada and the United States of private philanthropy at work, taking on risk, committing resources and applying rigour to address injustice. But it’s not only in North America that we see this in action. Some of the most ambitious private philanthropies in the world are working at scale in India to deconstruct problems and build new models. On a recent trip to Delhi and Mumbai, I met with four private foundations, established by business leaders, entrepreneurs or corporate leaders who have created great wealth through their business activities. These foundations are tackling the issue of the quality of education with imagination and problem-solving energy, identifying it as one of the most important levers of societal change. 

Many of India’s children attend public schools that are under resourced and struggling with teacher quality. Foundational learning for children under the age of ten (e.g. reading with meaning at an early age) is lagging. Girls students are more often left behind. Rural children are particularly disadvantaged. In a population and economy such as India, these challenges are staggering. Would the quality and accessibility of education for the population of the world’s largest democracy be improving, if not for private philanthropy?

Azim Premji Foundation, created by IT billionaire Azim Premji in 2001, is one of India’s largest philanthropic organizations. Azim Premji is one of the most generous givers in the world, numbering among the top five global philanthropists. His Foundation believes that a strong public education system is central to democracy and equity cannot be served by a stratified system. The Foundation works directly with public schools in rural areas of states across India to improve teacher training and school leadership.

Central Square Foundation, created in 2012 by Ashish Dhawan, a private equity investor and philanthropist, wants to ensure quality school education for all children in India. It focuses on evidence- driven and innovation- led system reform in school education, and in particular aims to ensure that all children attain foundational learning in the early years.

Similarly, the K.C. Mahindra Education Trust, created in 1953 by one of India’s leading industrialists, focuses on transforming society through education, especially for those left out and left behind. Among its many initiatives is Project Nanhi Kali, supporting economically and socially disadvantaged girls to complete ten years of education. The project takes a systems approach, working with girls, families and communities to create “girl-friendly ecosystems in tribal, rural and urban poor areas across India”.

The Edelgive Foundation, created in 2008 by the Edelweiss Group, has focused on education as a fundamental right that contributes immeasurably to the realisation of all others.  Edelgive has two other portfolio areas: livelihoods and women’s empowerment. Edelgive uses a partnership approach, working closely with collaborators, influencers, NGOs and governments. They are also committed to building more effective platforms and nurturing the capacity of NGO partners.

These leading Indian foundations are committed to constructing new models and approaches, using evidence, measurement, experimentation and demonstration. They are not replacing government but working alongside it, taking well-planned risks and working with community and public sector partners for the long term on the leverage points that will transform public education. No doubt there are opportunities to do better, certainly to listen more closely and to display more humility and empathy. Yet one has to conclude that this philanthropy works.

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