Oct 8, 2013--Today on its weekday arts and entertainment program 'Q', the CBC aired an interview with Peter Buffett, son of billionaire Warren Buffett, concerning a July 2013 op-ed commentary that he penned. Enclosed is a letter in reply to the program, written by a member of CHIP. Enclosed further below is the text of Peter Buffett's original commentary and a sympathetic rejoinder to Buffett published by Oxfam America.
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Oct 8, 2013
I listened to your interview this morning with Peter Buffett on the world's aid industry. I am simultaneously interested and disappointed with it.
Mr. Buffett has written a very interesting and necessary story in the New York Times. Canadian government policy in Haiti and the actions of the country's aid industry certainly confirm the broad outline of his concern and critique. But it would be the job of you and others in the CBC to bring the issue home. To cite a few examples, to my knowledge, the only program on CBC to look into the landmark lawsuit against the United Nations over the inadvertent introduction of the cholera bacteria to Haiti by UN soldiers has been As It Happens. In print media, this story is entirely unreported in Canada, including the stonewalling of that lawsuit by the UN (MINUSTAH) and the major countries in Haiti, including Canada. Indeed, until recently, the civilian representative of the UN in Haiti (read, main apologist of UN betrayal and failure) was a Canadian, Nigel Fisher.
What has happened to the promised funding and other assistance to improve housing, health care, education and economic development for Haiti? The promises have gone largely unmet, and Canadian media, with few exceptions, has failed to examine this with the vigour that it should. This lacuna predates, even, the 2010 earthquake.
There is a small group of Canadians who have been following and documenting this story, notably the two authors of the 2012 book Paved With Good Intentions and the editors of the website of the Canada Haiti Action Network. But our voices are too little heard. I'm sorry to say that, in my view, today's interview doesn't go very far in absolving Q for its share of that default.
I hope that the reflection and debate sparked by Mr. Buffett's commentary article continues to spill over the border into Canada.
778 858 5179
The Charitable-Industrial Complex
By Peter Buffett, op-ed commentary, New York Times, July26, 2013
I HAD spent much of my life writing music for commercials, film and television and knew little about the world of philanthropy as practiced by the very wealthy until what I call the big bang happened in 2006. That year, my father, Warren Buffett, made good on his commitment to give nearly all of his accumulated wealth back to society. In addition to making several large donations, he added generously to the three foundations that my parents had created years earlier, one for each of their children to run.
Early on in our philanthropic journey, my wife and I became aware of something I started to call Philanthropic Colonialism. I noticed that a donor had the urge to “save the day” in some fashion. People (including me) who had very little knowledge of a particular place would think that they could solve a local problem. Whether it involved farming methods, education practices, job training or business development, over and over I would hear people discuss transplanting what worked in one setting directly into another with little regard for culture, geography or societal norms.
Often the results of our decisions had unintended consequences; distributing condoms to stop the spread of AIDS in a brothel area ended up creating a higher price for unprotected sex. But now I think something even more damaging is going on.
Because of who my father is, I’ve been able to occupy some seats I never expected to sit in. Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left. There are plenty of statistics that tell us that inequality is continually rising. At the same time, according to the Urban Institute, the nonprofit sector has been steadily growing. Between 2001 and 2011, the number of nonprofits increased 25 percent. Their growth rate now exceeds that of both the business and government sectors. It’s a massive business, with approximately $316 billion given away in 2012 in the United States alone and more than 9.4 million employed. Philanthropy has become the “it” vehicle to level the playing field and has generated a growing number of gatherings, workshops and affinity groups.
As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to “give back.” It’s what I would call “conscience laundering” — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.
But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over. Nearly every time someone feels better by doing good, on the other side of the world (or street), someone else is further locked into a system that will not allow the true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life.
And with more business-minded folks getting into the act, business principles are trumpeted as an important element to add to the philanthropic sector. I now hear people ask, “what’s the R.O.I.?” when it comes to alleviating human suffering, as if return on investment were the only measure of success. Microlending and financial literacy (now I’m going to upset people who are wonderful folks and a few dear friends) — what is this really about? People will certainly learn how to integrate into our system of debt and repayment with interest. People will rise above making $2 a day to enter our world of goods and services so they can buy more. But doesn’t all this just feed the beast? I’m really not calling for an end to capitalism; I’m calling for humanism.
Often I hear people say, “if only they had what we have” (clean water, access to health products and free markets, better education, safer living conditions). Yes, these are all important. But no “charitable” (I hate that word) intervention can solve any of these issues. It can only kick the can down the road.
My wife and I know we don’t have the answers, but we do know how to listen. As we learn, we will continue to support conditions for systemic change. It’s time for a new operating system. Not a 2.0 or a 3.0, but something built from the ground up. New code.
What we have is a crisis of imagination. Albert Einstein said that you cannot solve a problem with the same mind-set that created it. Foundation dollars should be the best “risk capital” out there.
There are people working hard at showing examples of other ways to live in a functioning society that truly creates greater prosperity for all (and I don’t mean more people getting to have more stuff).
Money should be spent trying out concepts that shatter current structures and systems that have turned much of the world into one vast market. Is progress really Wi-Fi on every street corner? No. It’s when no 13-year-old girl on the planet gets sold for sex. But as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine.
It’s an old story; we really need a new one.
Buffett challenges philanthropic peers: Can the giving class address structural inequities?
Peter Buffett, son of gazillionaire philanthropist, Warren Buffett, and founder of the Novo Foundation, has ignited a tempest in the philanthropic community with his biting critique of the “Charitable Industrial Complex.” Everyone grumbles about the bumblings of donors, but for someone as iconic as a Buffett to trumpet his broadsides in the New York Times is pretty huge. It’s drawing predictable fire, but Buffett isn’t easily dismissed and he’s raising issues that deserve an airing. (Nice start in that vein from the Center for Effective Philanthropy here.)
Parts of Buffett’s critique will be familiar. He characterizes philanthropists as naïve and arrogant, parachuting into situations with no real knowledge (“philanthropic colonialism”). He sees philanthropy as largely a sop for the rich, easing their guilt with “conscience laundering” and making them feel “heroic.” He questions the growth of an “industry” that is unaccountable and doing too little to change lives.
Good stuff, especially from a Buffett, but these particular critiques don’t add much to the existing literature on philanthropy. Philanthropic circles are quite open about mistakes and many foundations are seized with concerns about impact, spurring a wave of “results-oriented” efforts to measure and ensure value for money. Likewise, questioning donor motives can be entertaining, but is more likely to breed defensiveness than change.
The mainstream responses to Buffett tend to bear that out. A well-known philanthro-chronicler of our day, Matt Bishop, coiner of the term “philanthrocapitalism,” dismisses Buffett’s critique as a “heartfelt but depressing and ultimately useless rant.” Howard Husock writing in Forbes quotes Henry Ford (“in effect, the Foundation is a creature of capitalism”) and chides contemporary philanthropists and Buffett for being naively ambitious about the role of philanthropy.
Buffett goes further and this is where it gets interesting, writing, “Philanthropy has become the ‘it’ vehicle to level the playing field…But [sprinkling a little wealth around] just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over.”
It’s not often that someone like Buffett pays such implicit homage to Marx and Engels, who raised similar concerns in the Communist Manifesto: “A part of the bourgeoisie is desirous of redressing social grievances in order to secure the continued existence of bourgeois society. To this section belong economists, philanthropists, humanitarians, improvers of the condition of the working class, organizers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind.”
There was in fact a time when the philanthropic titans like Rockefeller, Carnegie and Mellon were openly challenged for trying to white-wash their business dealings through philanthropy, and when large foundations were suspected of simply propping up the status quo. Today, those sorts of challenges rarely make it out of the isolated musings of leftist academia, making Buffett’s mainstream blast so startling.
We would do well to consider whether the big foundations—especially in this era of “philanthro-capitalism”— are truly able to challenge the status quo with any conviction. Are the market moguls driving new philanthropy, with their business-like focus on efficiency and market approaches to development, capable of the kind of structure-shattering imagination that Buffett rightly calls for?
More specifically, are they ready to throw their weight into the tougher challenges facing the development community: structural inequality, political capture, fragile states? Those challenges require an explicit focus on governance, politics and power: ill-governance must be challenged, politics must be directly engaged, and power must be re-distributed (zero sum!) from elites to communities and social movements. This is messy, risky, uncomfortable business, ill-suited to “results-oriented” measurement.
My own skepticism about mainstream philanthropy comes from two decades working with partners on the front lines of what I consider to be on the more status quo-challenging side of the development/human rights spectrum—economic and social rights, and corporate campaigning. In theory, the importance of these issues to those out to challenge structural inequities should be obvious. In fact, these remain the poor stepchildren of philanthropy, notwithstanding some great exceptions.
Buffett’s implicit question about the philanthropic appetite for structural change might be unpacked through some basic questions for foundations:
(1) How much funding goes to public policy advocacy versus basic services?
(2) How much funding addresses “power” imbalances directly? How much is about redistribution of power versus more general “empowerment?
(3) How much funding aims to build social movements and strengthen grassroots organizing?
(4) To what extent are alternative/grassroots voices part of the foundation structure (board, staff, proposal reviews, etc.)? What’s the balance between “elites” and alternative views?
(5) Does the foundation deploy its investments to challenge industry abuses?
(6) To what extent is the source of the foundation’s wealth (the business side) contributing to problems and how is the foundation managing that? (Note the debate about Carlos Slim’s philanthropy versus his monopolistic practices here.)
(7) Is the foundation using its political influence or elite networks to address systemic problems?
(8) To what extent are funding decisions transparent and accountable to the public?