Philanthropy: old forms, new challenges

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Alexander Belkin's picture

Philanthropy: old forms, new challenges

At first, the statement that all wealthy people should give back to society seems quite controversial. There is a general understanding that rich people gained their capitals due to their hard laborand talent, therefore, they do not have any moral obligations to the society and are free to choose whether or not they want to contribute to it. However, there are arguments that challenge that statement. For example, Ezra Rosser in her article “Obligations of privilege” argues that the rich have obligations to the society that greatly exceed those of the poor, because their high income is not solely earned by them but is generated due to the contribution of society (legal and political system, economic policy, government benefits etc)1. A lot of rich people seem to agree with this argument, as the number of philanthropists across the globe, especially in the US, is on the rise2.

In my opinion, the rich do have obligations to the society and they ought to contribute to it. However, instead of just giving money to the poor, the contribution should be selective and donations should be made in areas that can potentially benefit all layers of the society.

First of all, we must understand that philanthropy does not set a goal to eliminate economic discrepancy. The gap between rich and poor will always exist, which is why the way to maximize the benefit while giving should be of the utmost importance.

In fact, there are different ways rich people can contribute to the society. An act of directly distributing money to poor people without any concrete reason is called charity. When charity is structured and organized it becomes philanthropy. Philanthropy does not concentrate on a concrete individual; instead, it is always socially and economically oriented and serves for the benefit of society. The task people with enormous fortunes face is how to give in a way that it would benefit the whole of the society.

In the late 19th century, American businessmen and pioneer philanthropists John Rockefeller and Andrew Carnegie laid the foundations of philanthropy, defined by the liberal economic theory: philanthropy should be prudent and never wasteful. It’s not for nothing the biggest charitable foundations in the US were established by the successful businessmen: Rockefeller, Carnegie, Ford, Soros etc. These people managed to achieve success in their business activities. Nevertheless, their charitable activities would not be so successful if they were just giving away money, instead of rationally distributing it.

English philosopher John Stuart Mill who was one of the first economists to study charity formulated the defining rule of philanthropy: “If assistance is given in such a manner that the condition of the person helped is as desirable as that of the person who succeeds in doing the same thing without help, the assistance, if capable of being previously calculated on, is mischievous: but if, while available to everybody, it leaves to everyone a strong motive to do without it if he can, it is then for the most part beneficial”3.

On the other hand, Roman philosopher Seneca in his work Of a Happy Life (De Vita Beata) discusses philosophers and how they should share their wealth. For a philosopher, the wealth itself is of no value which is why he is willing to share it with others. However, he carefully picks people to whom his wealth goes to, “for a gift ill bestowed counts as a shameful loss”4. The philosopher, according to Seneca, gives and takes at the same time because he expects those he is giving to use the wealth prudently and thus benefit the whole society. In other words, Seneca considers charity a form of business. His ideas are fully applicable to modern standards and can serve as a pattern for the philanthropists of today.

Seneca’s view of philanthropy was realized in the form of private philanthropy. Its role in the history of the 20th century is very important. Activities of charity foundations helped to ease political radicalism that was on the rise in the 19th century. Business tycoons such as Rockefeller and Carnegie managed to rationalize philanthropy and turn it into a business on its own.

Answering the question whether philanthropists from earlier eras provide a model for giving by the wealthy in the 21st century, I’d say yes and no. In fact, the model for charity was provided long time ago by Rockefeller and Carnegie who defined the essence of modern philanthropy in the shape of foundations, trusts and endowments. This model seems to work quite effectively, because nowadays foundations account for the rest of the charity activities in the world. However, despite increased international activities of American foundations, the rest of the world doesn’t seem too eager to embrace American-style philanthropy. Therefore, the future task for is to expand these rational forms of philanthropy internationally.

Other countries have a long history of charity too. For instance, in Russia, such businessmen as Pavel Tretyakov, Savva Mamontov and Savva Morozov were famous patrons of art and donated a lot of funds to the artists and art establishments. Pavel Tretyakov founded the Tretyakov Gallery in Moscow; Mamontov and Morozov regularly donated money to various theatres and artists in Russia. In the Arab World, charity mainly takes the form of a religious practice called zakat, which implies giving a fixed portion of wealth to the poor. It is one of the Five Pillars of Islam. Until recently, Western-type charitable organizations had not existed in the Middle East. However, even there, different trusts and foundations begin to emerge. For example, the ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum is known for his vast charitable donations and set up an educational trust bearing his name5.

 

In order for philanthropic activities to go global, they should be at the center of public and media attention. Besides, governmental support of charitable activities, legal assistance and preferential taxation would help to raise the status of philanthropy and generate funds for future charitable activities. Those funds could be used for solving different social and economic problems and for investing into education, science and arts. A turn to philanthropy would help to overcome authoritarianism6 and would be one more step towards the civil society. 

References: 
  1. Rosser, Ezra. “Obligations of privilege.” N.Y.U. REV. L. & SOC. CHANGE 32 (2007): 
  2. http://blogs.wsj.com/wealth/2010/12/01/american-rich-lead-the-world-in-p...
  3. Mill, John Stuart. Principles of Political Economy with some of their Applications to Social Philosophy. William J. Ashley, ed. London; Longmans, Green and Co. 1909. Library of Economics and
  4. Liberty [Online] available from http://www.econlib.org/library/Mill/mlP.html; accessed 16 November 2012; Internet.
  5.  Seneca. O shacstlivoi zhizni, XXIII// Rimskie stoiki: Seneca, Epictet, Mark Avrelii (Seneca. Of a Happy Life, XXIII in Roman Stoicists: Seneca, Epictetus, Marcus Aurelius). Moscow., 1995, p. 187.
  6. http://news.bbc.co.uk/2/hi/middle_east/6672923.stm
  7.   Mill, John Stuart. Principles of Political Economy with some of their Applications to Social Philosophy. William J. Ashley, ed. London; Longmans, Green and Co. 1909. Library of Economics and Liberty [Online] available from http://www.econlib.org/library/Mill/mlP.html; accessed 16 November 2012; Internet.
  8.  Rosser, Ezra. “Obligations of privilege.” N.Y.U. REV. L. & SOC. CHANGE 32 (2007): 1.
  9. Seneca. O shacstlivoi zhizni, XXIII// Rimskie stoiki: Seneca, Epictet, Mark Avrelii (Seneca. Of a Happy Life, XXIII in Roman Stoicists: Seneca, Epictetus, Marcus Aurelius). Moscow., 1995, p. 187.
  10. http://blogs.wsj.com/wealth/2010/12/01/american-rich-lead-the-world-in-p...
  11. http://news.bbc.co.uk/2/hi/middle_east/6672923.stm