The Complexity of Wealth and Modern Philanthropy

Wealth and Modern Philanthropy

In 2018, a research study published by Harvard University indicated that sharp economic inequality continues to be a global paradox that we must strive to understand. When one percent of the population controls 50 percent of personal wealth around the world, we can easily state that things are not going in the right direction, particularly when 10 percent of the global population somehow manages to get by with just a couple of dollars a day. Needless to say, economic equilibrium is becoming elusive, and it is changing the ways we live and think.

The field of philanthropy is also changing, and it isn’t necessarily improving or declining; it is progressing in a direction that is both technical and ideological. Although philanthropy has been practiced over thousands of years, it used to be more closely aligned with what we traditionally know as charity, which in turn used to be closely aligned with religious doctrine. The principle of philanthropy has always been the magnanimous actions carried out by individuals whose love for humanity move them towards charitable causes; this has not changed, but the dynamics of giving and funding have undergone a transformation.

Philosophers often remind us that the study of human thought is plagued with problems related to perception and interpretation, and perhaps this is the way it is supposed to be; however, we can always turn to ethics to solve some of these problems, right? Turns out that this is not always the case; we wish it would be this easy, but perception and interpretation of the ethics are also getting in the way with regard to modern philanthropy.

The Notre Dame Dichotomy

Shortly after the Notre Dame Cathedral in Paris was ravaged by a fire in 2019, French business leaders and wealthy individuals pledged more than a billion dollars towards restoration of this religious and historical landmark. Two months after the fire, Notre Dame administrators gave an account of funds received, and the majority were modest donations made by individuals from around the world; less than a third of the commitments made by wealthy individuals had been honored, and the reason for this delay is worth discussing.

It so happens that many of the rich donors who pledged handsome amounts towards the restoration of Notre Dame want to have a say in how the funds are utilized, and we are talking about millions of dollars. One donor publicly explained that he was opposed to his donations being used for payroll purposes, and contracts were being drafted to this effect. Other major donors wanted to stage the disbursement of funds when certain milestones were achieved; for example, $500,000 now and another $500,000 when the wooden spire is ready to be rebuilt, but don’t use any money towards satisfying payroll obligations.

The dichotomy we see here is that modest donations ranging between $1 and $100 were provided without any conditions; however, the bulk of the money pledged is expected to come from wealthy individuals who want to influence the Notre Dame reconstruction process. Should these donors with deeper pockets be entitled to control the application of the funds they so generously provide? Some will answer that wealthy people should not get to determine how charitable causes are managed; others will answer that billionaires have reached a status that gives them certain leeway in this regard, and we should be grateful that they get into philanthropy in the first place.

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Finding Balance in Philanthropy

Here’s a valid concern about the direction philanthropy has taken over the last two decades: how do the goals of foundations align with those of populations in need? In the case of the Bill and Melinda Gates Foundation, for example, some observers have pointed out that this organization has done a lot to alleviate extreme poverty in developing regions, but this is something that the United Nations should have accomplished with governments in the first place.

Then we have organizations such as the Open Societies Foundations established by billionaire investor George Soros, a man who is not guarded when it comes to explaining that his charitable work is aligned with a liberal and progressive agenda. The concern in this case is related to whether altruism can become a form of power. Both Gates and Soros are not afraid to speak their minds when they speak about the causes they believe to be worthy, and they will continue towards them as long as they can fund them.

We generally want foundations to be transparent about the work they perform, but sometimes we focus too much on the wealth and personal beliefs of their founders. For example, the net worth of Sheikh Saud bin Saqr al Qasimi, ruler of Ras Al Khaimah is often subject to speculation; some people believe he should be on the Forbes list of the world’s wealthiest individuals, but it should be noted that the billions of dollars within the sovereign investment fund he manages do not count towards personal wealth.

The most active charitable foundation in the Ras Al Khaimah emirate was created by Sheikh Saud bin Saqr for the benefit of the people he leads. This is a different style of philanthropy because His Highness is already involved in the economic development of Ras Al Khaimah; the foundation conducts policy research to determine how the business and industrial growth of the emirate can advance social causes and improve the welfare of residents. When you have a foundation that works closely with the government, it is easier to strike a balance of altruism and power. We can argue all day about the responsibility of governments to ensure that inequality does not become a socially divisive issue, but we know this is easier said than done. It would be utopian to not have a need for philanthropy, but reality creates such a need. With all this in mind, the best we can hope for is that more wealthy individuals and families turn to philanthropy, hopefully with the purpose of closing the huge gap of financial inequality we currently find ourselves in.