Enter the undeserving rich and what this might mean for philanthropy – a thought for 2012


Caroline Hartnell

Caroline Hartnell

Caroline Hartnell

It’s that time of year when every blogger and column writer offers predictions for the coming year or a wish list or perhaps new year’s resolutions. I’ll pass on the new year’s resolutions and am wary about predictions, but I would like to offer a thought for 2012 that is somewhere between a wish and a prediction arising from the current state of the world.

We are all familiar with the distinction between the deserving and undeserving poor – dating from the 16th century and the Elizabethan Poor Laws. Since the early 20th century progressives like Joseph Rowntree and Beatrice and Sidney Webb have rejected this distinction, arguing that poverty is not a category that defines a person but a condition into which anyone can fall. But somehow it always rears its ugly head again. In harsh economic times, with public spending cuts, increasing unemployment and growing pressure on welfare benefits, it is particularly likely to come to the fore, though often couched in new terms.

The wealthy, on the other hand, have always been assumed to be deserving, having made their fortunes through their own creativity and hard labours, and in any case imposing no burden on the state. But now we are beginning to see a similar concept of being ‘undeserving’ creeping in for the wealthy, with Occupy Wall Street standing up for the 99 per cent and the bankers blazing the trail as the mega-rich who have done little to deserve their vast wealth while bringing the global economy to its knees.

Where does this leave philanthropy? The rationale behind donors’ minimal accountability has always been that philanthropy is a voluntary gift of people’s hard-earned and well-deserved wealth. Yes, they get a tax break, but they’re still spending their own money. But if the rich can be seen as undeserving, there may come to be more questioning of their right to spend their money as they please and more pressure for philanthropy to be accountable. In his article ‘Gorillas in the midst’ in the December issue of Alliance, Jacob Harold sets out four ‘behaviours’ which together he terms the ‘new governance bargain’: transparency, measuring multiple bottom lines, proactive engagement with stakeholders, and collaboration. ‘By fulfilling their part in this new, implicit arrangement,’ he says, ‘organizations can retain permission from society to operate without excessive regulatory constraints.’

Permission from society to operate may be less readily granted in 2012 and in the years of austerity likely looming ahead. I always feel a bit uneasy when I hear people talking about how much fun philanthropy is and what a marvellous way it is of bringing the family together. If it is fun and brings families together, all well and good, but as times get harder I think the public, the 99 per cent, are going to want to hear more about the rich discharging their responsibility towards society, and the pressure for accountability will be greater. And with poverty and inequality on the increase, there may also be pressure for the rich through philanthropy to do something directly to remedy this. According to a recent report from the Foundation Center social justice funding has been particularly hard hit by the recession. Let’s hope this will turn around in 2012!

Caroline Hartnell is editor of Alliance magazine.

Latest from Alliance will be taking a break now, but we’ll be back at the beginning of January. Our best wishes for the holidays and for a great 2012 to all our readers and contributors.

Tagged in: Inequality poverty Social justice

Comments (2)

Caroline Hartnell

Kristin, thanks for your comments. I entirely agree with you: it makes sense to think about 'and' (benefit to society and benefit to donor) rather than 'or'. It is more likely that people will be generous if the process of enjoyable, and it's good in itself that people should enjoy what they do. My point is simply that the priority should be the benefit to society, and an increasing recognition of this would be one good thing to come out of the current recession. Philanthropy does attract tax benefits in many countries, including the US and much of Europe, and when state provision of services is being cut to the bone, it seems natural and right that the public should demand more of philanthropy/foundations. Not that philanthropy/foundations should substitute for the services that are being reduced or lost - though this is clearly what some governments are hoping for, certainly in the UK - but that they should bring real benefits to society.

Kristin Majeska

Thank you for another thought provoking post Caroline. It would be wonderful if one (though not the only) of the consequences of the recent awakening of the 99% would be greater pressure for accountability in private philanthropy, both from individuals and foundations. I understand your discomfort when you hear philanthropy being promoted as “fun” and a great way to bring families together, because it sounds like the priority is providing a benefit to the donor rather than to society. Yet, I’d argue that the extent that philanthropy is still voluntary, it makes sense to think in terms of an “and” rather than an “or”. Philanthropy must absolutely focus on creating maximum impact on the cause and social issue AND be perceived as valuable to the donor. For some donors, the satisfaction of having had an impact on an issue will be the greatest reward. For others, that sense, combined with enjoying the process and/or seeing a positive impact on their family will be the motivator for continuing to give and to give even more in the future. I often think back on the fascinating study done by the Center for High Impact Philanthropy in 2008, “I’m not Rockefeller” in which many donors who gave away more than a million dollars a year said they didn’t do more investigation or analysis before they made gifts because they didn’t want their philanthropic activities to “feel like work.” I believe strongly that the process of giving away money should be every bit as rigorous and disciplined as any other type of investing … but even motivated givers don’t always feel the same way. As a field, we need to bring them along, to help them see that highly effective giving feels better than ad-hoc, less informed giving… and that will usually mean ensuring that the donors enjoy the process.

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