Bad philanthropy: The rinsing of toxic money


Nkasi Wodu and Ese Emerhi


Last weekend, Black Lives Matter protesters in Bristol, England, toppled a statue of Edward Colston, an English merchant who made his money off the slave trade. Colston was also ‘Bristol’s most famous philanthropist’, according to Historic England – contributing money to schools, hospitals, almshouses, and churches. Yet the money donated by Colston for the growth of his community was tainted by his actions as a slave trader. The protestors in Bristol agreed, dragging his toppled statue through the streets, symbolically kneeling on its neck, and then tossing it in the water.

If philanthropy can be defined as the desire to promote the welfare of others, expressed by the generous donation of money to good causes, then for centuries, philanthropic activities have done a lot of good. History is replete with philanthropic organisations changing the course of people’s lives for good.

But what happens when the purpose of philanthropy isn’t just to do good? What happens when the source of funds used for philanthropy is tainted and toxic? Does this cancel out the good deed that is done with those funds?

Corrupted philanthropy

For decades, organised criminal groups have employed philanthropy to good effect in one way or the other. The pertinent question is why? The reason cannot be merely a tax incentive. Often, the activities of these criminal groups are illegal and as a result are not projected to form part of the revenue-generating activities of governments. Why then would groups well known for perpetrating violence and terror as instruments of coercion, still resort to the provision of education, healthcare, sanitation, etc. to people that are largely their victims?

Firstly, philanthropy is used to gain social capital and legitimacy. In Jamaica, when authorities wanted to raid Tivoli Gardens to arrest the drug kingpin Christopher ‘Dudus’ Coke, they appealed to the ‘law-abiding residents of Tivoli Gardens’ to immediately evacuate the area. Despite the warnings, according to reports, most residents remained loyal to Coke. Though the leader of a multi-billion dollar crime syndicate he ran with ruthless efficiency, Coke had deployed philanthropy to win support and allegiance from the people of Tivoli Gardens, even though they had suffered from Coke’s reign. It is this type of legitimacy and social capital, conferred by philanthropy, that can be manipulated against the very people who think they are benefitting from it.

Secondly, philanthropic work is used as a recruitment strategy. Not a lot of people would openly follow someone working against their own interests. However, throw in some charity work, build a few roads and invest some of that ill-gotten wealth into changing a few lives, and you have the moral authority to champion a following and a ready supply of informants, enforcers, and middlemen. In their paper Bandit Organisations and Their (IL) Legitimacy, authors Cederstroem, C. & Fleming, P., argue that when organised criminal networks engage in philanthropy, they are hacking into the people’s value systems.

Thirdly, philanthropy helps organised criminal networks to fill up power vacuums and institute informal governance processes. When organised groups engage in philanthropy, they replace often non-existent or non-functional state authorities in the areas of their operations. Perhaps it is not a coincidence that organised criminal networks often thrive in areas where there is abject poverty, squalor, and high levels of illiteracy or unemployment. These spaces are ungoverned, where government distrust and suspicion is rife, sometimes leading to clashes between residents and agents of government. Consequently, organised criminal networks fill this existing vacuum, capitalising on the distrust of government and compensating for absent public justice through philanthropic work.

The motive here isn’t altruistic – it is mainly about distracting from reprehensible acts. As one Jamaican resident aptly captured it ‘Dudus may have done some bad things but he kept order.’

Finally, engaging in philanthropic acts allows for the widening of moral licensing – that mental glitch that strengthens positive self-image that makes worrying about the consequences of immoral or bad behaviour disappear. In essence, doing something good to justify doing bad; it reassures them of their virtue, and as such, with moral credits in hand, they feel entitled to (continue to) be bad.

Guidelines to stay true to altruism

For philanthropic institutions doing good, there are some guidelines to ensure they keep to the true meaning of their mission and to avoid scandals where they may have used or accepted funds from questionable sources.

  • A strong charitable mission needs to be established. This needs to be written in founding documents and shared with staff so they clearly understand its intensions, as well as its limitations.
  • Take care in choosing trustees and staff who share in the foundation’s principles. Family members, friends, and close business associates such as lawyers, bankers and accountants may not be good choices, unless they share the same worldview.
  • Donor intent tends to suffer when philanthropic interests and the need to maintain control of the institution are mixed. These two should be separate.
  • For philanthropists who found institutions, keep in mind a sunset provision for when the foundation would close its doors, perhaps a generation or two after the founder’s death.
  • If foundations are established to exist into perpetuity, create strong procedures for electing future trustees who share in the original founder’s principles, and make respect for donor intent part of their fiduciary duty.
  • A thorough due diligence on sources of funding must be done by philanthropic foundations. The freedom and ability to reject funding, even if to the detriment of the foundation, must be insisted upon. However, this can only happen when a strong mission and vision for that institution is clearly articulated and understood by all.

Justice – the removal of systemic issues and processes that keep the poor poor – and philanthropy must be linked. Otherwise, big philanthropy, in the way criminal networks operate, is simply an exercise in power, not trying to solve societies’ problems in any meaningful way.

A version of this article was published in All Africa on 7 June 2020.

Nkasi Wodu is the Peace Building Manager at PIND. Ese Emerhi is the Project Director at Kiisi Trust Fund/TrustAfrica.

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