Doing good and doing well

Philanthrocapitalism, by Matthew Bishop and Michael Green

Some say there’s no such thing as pure charity. All altruistic gifts are rooted in the self-interest of the giver, whether the goal is to increase your social status or your tax portfolio. If that’s true, the only thing new about philanthrocapitalism is that people such as Bill Gates and Warren Buffett are being more upfront about the need to make money out of charity. And they are confident that combining business acumen with philanthropy will improve the world that made them rich in the first place.

Worth an estimated $30 billion, the Bill and Melinda Gates Foundation had long been the largest charity in the world, with more money to battle global health inequalities than the UN’s World Health Organisation. Then Warren Buffett gave Gates another $31 billion. The gift marked the launch of ‘billanthropy,’ or, as Matthew Bishop and Michael Green call it, ‘philanthrocapitalism’.

Bishop’s and Green’s book explores the world of the celebrity philanthropist: the new breed of robber barons who want to rival the legacies of men such as Carnegie and Rockefeller. Whether you call it ‘venture philanthropy’, ‘for-profit philanthropy’, or ‘philanthrocapitalism,’ the motif is the same: in order to produce lasting change, philanthropic bodies need to be run less like charities and more like businesses. The new philanthropists argue they can give more effectively if they’re not hamstrung by the bureaucracies of traditional non-profit organisations or government departments.

When Buffett gave $31 billion to the Gates Foundation, he said he knew it would do more good than if the money were dropped into the US Treasury. That’s possible. The problem is, however inefficient it is, the treasury it still beholden to some semblance of democratic accountability.