Throughout philanthropy’s history, it’s drawn intermittent waves of intense criticism, and it certainly feels like we’re heading into one now. Outrage over wealth accumulation, an unbridled tech industry, money in politics and more is inspiring healthy scrutiny from many directions (including us). 

Some of this criticism is not over funders’ influence, grantmaking practices, or relative stinginess, but about the assets lying behind the grants—the fortunes behind the 5 percent annual payout, and what exactly all that money is up to.

The latest example is a recent investigative report from Science, which found that seven of the largest private research funders have, conservatively, made more than $5 billion in secretive offshore investments. The report shines a light not only on the dodgy, if legal, financial practices of these foundations, but also the ways such investments undermine their missions for public good.

The investigation mined the millions of leaked documents known as the Paradise Papers, and found that of these foundations—Gates, Wellcome Trust, HHMI, Packard, Moore, and Hewlett—all but Gates had apparently placed investments in offshore funds.

The report explores several layers of criticism about these investment practices:

• For one, some investments that these offshore funds make undercut foundations’ philanthropic missions, including an anecdote about Wellcome indirectly investing in Varo Energy, a company that sells highly polluting marine engine fuel to shipping firms.
• Offshore funds legally allow investors to minimize the taxes they pay. Foundations already have low tax burdens, but investing offshore also allows them to avoid regulatory red tape and pursue a wider array of investment opportunities, some frowned upon in the U.S.
• With their white hat reputations, foundations are helping to legitimize financial practices used by lawful investors and criminals alike, which collectively deprive governments of many billions of dollars in revenue and worsen inequality.
• It’s just shady—the hallmark of these offshore arrangements is secrecy and lack of oversight, which foundations with missions for public good and resulting tax benefits should not be taking advantage of.

Foundations in question offered written statements or declined to comment, with only RWJF substantively discussing their investments with Science. Wellcome points out that it does consider environmental issues when making investment choices, and RWJF screens for tobacco, firearms and alcohol. But the defenses largely boil down to “don’t hate the player, hate the game.” In other words, it’s their fiduciary responsibility to build their endowments, and this is part of that.

This is one of a few common arguments that some foundations and other institutions make in a broader debate over whether they should be investing their assets in ways that directly serve, or at least don’t contradict, their missions. The debate concerns both divesting, or screening for bad stocks, and impact investing, or making investments with social benefit.

Related: As the Fossil Fuel Divestment Movement Gains Steam, It’s Getting Harder for Foundations to Ignore

A common argument for not doing so is that endowment serves their mission, so the stronger the endowment, the better they can carry out that mission. Or to put it another way in the case of a foundation, an investment decision that brings smaller returns means less money to give, so you’re basically making that decision in lieu of another grant you could otherwise make.

Aside from the fact that there’s a financial case for socially responsible investing, this argument gets shaky when you start looking at how some of these investments support systems many funders are purportedly out to change with their grants. As Dana Bezerra of Heron Foundation, a champion of responsible investing, told Science: “I have yet to meet a community willing to trade off our ability to generate returns with their clean water and healthy soil on the promise that we’ll be back to fix it with charitable dollars in the future.”

This is a particularly stark concern in the context of what is perhaps the highest-profile front of this debate over climate funders and their investments in the fossil fuel industry. While the drive to get institutions to screen their investments for fossil fuels has gained astonishing momentum, many foundations that prioritize climate change have not joined in.

That gets to what I think lies at the heart of the concerns in the Science investigation: What, exactly, is the other 95 percent of a foundation’s money doing? Sure, a funder like Hewlett makes $430 million in grants in a year, no small feat, but what about its $10 billion in financial assets? Why should that money be cordoned off with purely financial goals? Could that money be having a bigger impact on its mission? Or at least not undermining it? Or setting a noble, high-profile example?

But concerns about the wealth behind philanthropy run even deeper than investment choices. There seems to be a general, growing anxiety about these huge accumulations of wealth that fuel the sector, and how much any good achieved by grantmaking stacks up against the dirty business of making and growing fortunes. This critique is exemplified in Anand Giridharadas’s recent book Winners Take All.

At the end of the day, the problem of offshore investments is one facet of a bigger question philanthropy must reckon with. Is the sector here to shift money and power, or is it helping to concentrate it? If philanthropy is going to weather this latest storm, it will need to make the case that it’s not just another wealth-building entity, a cutthroat investment fund that also makes grants. It needs to prove that it’s a force for good in the world, investments and all.

Tate Williams is Science and Environment Editor at Inside Philanthropy