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Just another emperor? The myths and realities of philanthrocapitalism

Do 'commercial practices' have a place in development philanthropy?

Authors: M. Edwards (ed)
Publisher: Demos, 2008

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This book is about a new form of philanthropy dubbed 'philanthrocapitalism'. The authors determine that philanthrocapitalists believe that foundations and non-profit civil society organisations should operate like market-oriented businesses. They believe that success in the business model can be emulated to make a similar impact on social change. The author concedes that it should certainly help to extend access to useful goods and services, and it has a positive role to play in strengthening important areas of civil society capacity, but social transformation requires a great deal more. This book argues that:

  • The hype surrounding philanthrocapitalism is overstated in terms of real results delivery
  • The increasing concentration of wealth and power among philanthrocapitalists is unhealthy for democracy
  • The use of business thinking can damage civil society, the centre of democratic politics and social transformation. The two must be differentiated to re-assert the independence of global citizen action
  • Philanthrocapitalism is a symptom of a disordered and profoundly unequal world.
The author asserts that there is need for public debate between philanthrocapitalists and their critics about the complexities involved in social transformation. The book suggests a number of commitments that should be made, including:
  • A commitment to transparency and accountability - pass legislation to protect the public interest in schemes for the use of charitable trusts, and other forms of business involvement in philanthropy
  • A commitment to democracy - give recipients and beneficiaries a real voice in governance and programme strategy. No foundation or social enterprise should receive tax exemption unless its board is fully representative of the communities it claims to serve
  • A commitment to modesty - they should recognise their limitations and build support for other institutions that must be part of the solution to social problems, especially government
  • A commitment to devolution - invest in civic capacity and voice, and promote the long-term financial independence of civil society organisations through long-term support.