As the global recession puts government aid budgets under pressure, and with the UN revealing a funding shortfall of nearly $5bn last week, calls are being made to expand the role of private philanthropy. There have even been suggestions that the wealthy should be given tax breaks to incentivise more private giving.
A new buzzword is «philanthrocapitalism«, a view that the talents and methods of successful capitalists should be applied to the «business» of social welfare and poverty alleviation because governments, traditional charities and NGOs are comparatively ineffective and inefficient. This is part of the «New Philanthropy», the ascendancy of private foundations within public policy and international development, dominated by the Bill and Melinda Gates Foundation.
In 2007, the foundation spent $1.22bn (£718m) on its global health programme and $234m on its 700-plus staff and operations, a little less than the annual budget of the World Health Organisation. What Microsoft did in the software market, the foundation appears to be replicating in global health. Its reach covers an astounding spectrum of global health actors, and it has an active role in shaping their policies, plans and actions.
Between 1998 and 2007, 20 recipients accounted for about two thirds of the foundation’s total spend. They included the WHO and Unicef, public-private partnerships such as the Global Fund to Fight Aids, universities, key NGOs and even the World Bank. It sits on the governing structures of many global health institutions, and has the ear of government and business leaders worldwide.
The WHO, having been weakened as an independent multilateral agency over the past two decades, now has a private foundation as one of its biggest funders, which uses its financial leverage to guide the WHO in certain directions.
The influence of the Gates Foundation also has knock-on effects. NGOs and universities that are not recipients of its money or not aligned to its vision can become marginalised. Health issues it deems unimportant are sidelined. This is relevant, because the way the health problems of the poor are defined and prioritised is crucial in framing an effective response. But, unlike other big global health institutions, the foundation is unaccountable. It has no formal governing body. Though it has an advisory board and consults widely, some in the health community feel it only listens to what it wants to hear.
Given its widespread influence, the argument that private foundations built on private wealth need not be publicly accountable is mistaken. After all, most private foundations are publicly subsidised through tax breaks. Independent evaluation of private foundations is important because philanthropy can have unintended consequences. The health systems of poor countries are fragile, and it is not uncommon for misdirected aid to damage them further.
Accountability is also important because of potential conflicts of interest. After three decades of neoliberal orthodoxy coupled with the «public-private partnership» paradigm, which encourages corporate involvement in policy-making and promotes corporate social responsibility as an alternative to effective public regulation, the New Philanthropy offers the danger of extending the undue influence of private actors over public policy and institutions.
There is nothing inherently wrong with this sort of philanthropy, and there are many examples of it catalysing development and promoting social justice. In a global economy that increases the disparity between rich and poor, philanthropy and generosity need to be encouraged. But not at the expense of social justice, or as a substitute for a more effective public redistribution of wealth.
Threats to good governance and the accountable and democratic functioning of public institutions also need to be better recognised – and rigorously assessed. Historically, health has been built on the base of effective and accountable public bodies, coupled with technology and community empowerment. If the Gates Foundation’s strapline – «all lives have equal value» – is to be meaningful, it must strive harder for a fairer distribution of power and agency, and recognise its responsibility towards enabling democracy and good governance.
David McCoy, a medical doctor and academic.