Philanthropy should improve government, not vice versa

Government and philanthropy: a misunderstood relationship

At philanthropy conferences and seminars, and more recently in countless Zoom calls, I often hear about reports reflecting on the “philanthropic environment” in a given country. Sections of such reports are devoted to the relationship with the government. Invariably, the conclusion is that the government should be doing more to make philanthropy easier and more impactful. How exactly it should do so depends on the context: less paperwork, better tax breaks, easier foundation setup, etc.

Having such reflections is fine, but let’s not miss a crucial point here: most our thinking should be pointed in the opposite direction, i.e. how local philanthropy is supporting the government! It is the government that possesses incalculably more power than all the charitable foundations put together. Our best investment as philanthropists is in helping the government change and adapt so as to render better services to its citizens. This multiplies the effect of our dollar spent manifold.

The government as a target

To state the obvious: the most powerful, most direct change agent in a society is in fact the government. I include under this umbrella term both the executive and the legislative functions. In total, they have the power to enact laws and allocate resources that can change a country profoundly overnight. By comparison, the financial and political power of philanthropy vis-à-vis the society is minuscule.

There is, therefore, a great case for influencing the government process directly, and philanthropists are in a position to do this both through their foundations and through their primary roles as capital owners and prominent members of society.

The challenge many of us face in this regard is that influencing the government is decidedly political; there is no way around that fact. In fact, in the view of the Altruist League, change must carry with itself a political stance – if it doesn’t then it isn’t change. Pretending to be “politically neutral” is pointless in an age of extreme injustice and social tensions.

The untenability of the unpolitical position is even more prominent in non-democratic societies. There, by only focusing on our work and ignoring the political environment we may in fact be helping perpetuate it.

Government-philanthropy collaboration: the research

Quality analyses on the modern relationship between the government and philanthropy are few and far between. The writing falls into several categories.

There are your consulting reports, much-multiplied during the COVID-19 pandemic, which uncritically urge government and philanthropy to “work together,” without elaborating what that really means.

Such texts exist against the backdrop of broader superficial writing on the philanthropy-government collaboration, which sees the two as two sides of the same coin, complementary partners destined to work together. Often, such portrayals are hagiographic of modern philanthropy, ignoring all its problems.

The next tier are the more serious scientific studies (examples here, here and here). The problem with these is usually their focus. For example, many of them attempt to understand whether government investment in nonprofits leads to a “crowding in” (more philanthropy money coming in) or “crowding out” (less). These are not the key questions to ask. Besides, the studies themselves are for the most part inconclusive.

Finally, the most sober perspective on the government-philanthropy relationship is to be found in the texts criticising modern philanthropy. These authors understand the complicated relationship between the two actors, and worry about the dangers that come with the billionaire charity replacing government services, the associated power imbalance and the inequalities generated. These studies usually don’t focus on practical solutions for going forward, either.

The four areas of support

Philanthropy has the role to play in strengthening government in the following four areas:

Government performance. Invest in nonprofits that push for more transparency and better local government. Support laws that control lobbying, so as to restrict the influence of wealth on politics. Promote diversification of the political process by supporting minority social movements and nonprofits.

Improve the electoral process. Support nonprofits that promote voting, in particular among the young. Improve the capacity of local administrators to conduct elections. Promote voter rights legislation and remove obstacles to voting, including gerrymandering. Support campaign finance reform.

Help reform the media landscape. Support diverse and underfunded media operations (example). Support groups and technology that address biases and disinformation in the media. Promote digital literacy.

Lobby for positive causes. Connect voices from the ground (including citizen movements) and government representatives. 

Better understanding – more impact