Capitalism IS Charity?

On the Neoliberal Attack on Philanthropy

You would understand it if you heard a right-wing libertarian like Ron Paul or Paul Wolfowitz say:

I believe that ‘government,’ as we know it today, should pull out of most things except for law enforcement and justice, national defense and foreign policy, and let the private sector, a social-consciousness-driven private sector, take over their other functions.

But Muhammad Yunus, founder of the Grameen Bank, and recent Nobel Peace Prize winner, wrote that in his book Banker to the Poor.

Yunus’s Grameen Bank offers small loans, or “micro loans,” to poor women (mostly) in developing nations to fund their businesses. Loans can be used to buy weaving machinery, a cow, or anything else to help jump-start their business.

Yunus’s neoliberal vision—reduced government, a free-market economy, and profit-motivation—for philanthropy is a rapidly rising, and disturbing, trend aiming to re-brand capitalism as charity or social change. Letting the market work out political, economic, and environmental problems is quickly becoming the right-wing’s antidote to grants, foundations, social movements, non-profits, and charity.

Although this has been happening for years—see the Revolution Will Not be Funded–we’re recently facing the neoliberalization of the non-profit sector at a rapid pace.

The New York Times recently published an article, “A Capitalist Jolt for Charity,” in which they describe a former AOL executive’s online student reading program, In2Books.

The author says that, “The once-struggling venture has morphed into a primarily for-profit enterprise. And the striking transformation of In2Books is emblematic of a larger trend: charities are changing their spots and making use of some of capitalism’s virtues.”

Yes, capitalism’s “virtues” like profit motive. The author continues:

“The process is being pushed forward by a new breed of social entrepreneurs who are administering increasing doses of bottom-line thinking to traditional philanthropy in order to make charity more effective,” the article continues.

Discovering that some non-profits are turning for-profit might not seem so worrisome. But when the richest people in the world (ie. Bill Gates and Google’s founders) start touting capitalism’s “ability to create social change,” we have a problem.

Bill Gates recently presented at the World Economic Forum in Davos to promote, what he calls, “creative capitalism,” that uses market forces to address the needs of the world’s poor. “Such a system would have a twin mission: making profits and also improving lives for those who don’t fully benefit from market forces,” says Gates in his speech.

Gates will pursue “creative capitalism” full-time through the Bill and Melinda Gates Foundation when he retires from Microsoft this summer. And he’ll have more money than anyone to do it. The Gates Foundation, already the world’s wealthiest foundation, currently has about $33.12 billion in assets. But Warren Buffett plans to leave his fortune to the Gates Foundation, giving Bill roughly $70 billion to work with–dwarfing the second largest foundation, the Ford Foundation’s $12.25 billion.

Google’s capitalist/philanthropic strategy (founded by Larry Page and Sergey Brin) is expressed through www.google.org. According to the New York Times article, “Philanthropy Google’s Way: Not the Usual,” “The ambitious founders of Google, the popular search engine company, have set up a philanthropy, giving it seed money of about $1 billion and a mandate to tackle poverty, disease and global warming.”

Sounds ambitious and kind-hearted enough.

“But unlike most charities, this one will be for-profit, allowing it to fund start-up companies, form partnerships with venture capitalists and even lobby Congress. It will also pay taxes,” the author continues.

As I said before, the rich co-opting charity to fulfill their interests isn’t new (see Domhoff’s “The Ford Foundation in the Inner City”). What’s new, however, is that the extremely rich are trying to eliminate the non-profit sector altogether. Whether it’s libraries (See John N. Berry’s “The library becomes a dehumanized supermarket or a chaotic bookstore”) or soup kitchens, or NGOs, non-profits are changing because the foundations that control the purse strings can demand so. They don’t want to redistribute wealth; they want to make more money for themselves.

The Revolution will not be Funded is a great resource on how foundations only fund self-serving initiatives that exclude social movement activities. In it, many authors talk about how “the current non-profit structure is based on a corporate model.” Neoliberal philanthropy removes the subtly corporate non-profit structure altogether in exchange for a blatantly corporate model.

So what’s the problem? There’s little doubt that Gates and Co. will have at least some positive impact. Here are three reasons—there are tons more—why capitalist philanthropy is a misnomer and a disaster.

First, the major problem with “philanthropic” for-profit companies is profit motive. The goal—or what should be the goal—of non-profits is to drive themselves out of existence. Meaning, they should work to end the problem that caused them to form in the first place. So, in Africa, an NGO or non-profit should work to cure AIDS, thus ending their need to exist. This requires a healthy balance of direct services and social movement organizing. Taking care of those in need is of utmost importance.

But what’s important to a for-profit company? The bottom line. Not those in need. The corporate mentality isn’t to put itself out of business–it’s to stay in business. Bill Gates shows us this when he touts all the money he donates to reducing AIDS in Africa (in public), but at the same time invests millions in pharmaceutical companies (privately). The pharmaceutical companies’ interest is stopping cheap generic drugs—by claiming they have “intellectual property rights”—from entering the African market. The generics are cheaper and could save millions of lives. But the pharmaceuticals block generics so that they solely benefit from the African AIDS market. In the end, Bill is actually killing more people than he’s saving.

Second, neoliberal philanthropy doesn’t redistribute wealth—it only makes the rich even richer. When you donate money to your local soup kitchen, you don’t expect to ever see that money again, and only receive a tax break and satisfaction. Your money is used to buy food for someone who needs it to survive. In a very small way you’re redistributing some wealth—money you made at your job is going towards helping someone who doesn’t have a job or has a bad job.

With neoliberal philanthropy, however, any “donation” you give will eventually be reimbursed. So, you’re not redistributing anything. You’re just becoming a banker, a usurer, an investor.

Kiva.org, inspired by the Garmeen Bank, lets users make loans to people in developing countries, for example. Their slogan is “Loans that change lives.” At the site, you can chose a business you want to invest in, send them money, then get the money back over time, allowing you to feel like you donated money without actually donating anything. You can only support business, not social movements to convince the World Bank to end the debt of developing nations, or to overthrow despotic regimes. Just capitalist business. “Feel good without really doing anything” should be their slogan.

Third, “creative capitalism” or “Grameen capitalism,” it’s still the same capitalism that’s made the world so unequal today. It’s widely accepted that the neoliberal policies of the World Bank and IMF have had devastating effects on developing nations, made the world more unequal, and hasn’t fulfilled its promise of prosperity for all. Capitalism is evil whether or not it has the world social in front of it.

While the rich are trying to re-brand capitalism by calling it “creative capitalism,” or “social capitalism,” or “Garmeen Capitalism,” we need to work harder to preserve our non-market institutions and work even harder for social change. The market won’t solve inequality–it will only exacerbate it. It won’t end AIDS–it will only profit from it.

Google’s slogan is, “Don’t be evil.” Sorry fellas, but capitalism is evil.