Why Philanthropists Should Become Heretics

Philanthropy and power have always been closely intertwined. Wealthy men in ancient Athens paid for public goods and services, such as naval defenses, under the so-called liturgical system, in which the richest citizens financed some functions of the state. In many Islamic societies, propertied Muslims have ceded parts of their fortunes to charitable waqf entities that have funded services such as soup kitchens and hospitals. In early-modern Europe, the Medicis and other potentates created what were the microfinance schemes of their time, lending small sums of money to poor citizens.

Those philanthropists faced an abiding tradeoff between embracing an existing order and seeking to challenge it. As the above examples suggest, they most commonly have opted for the former choice, working within prevailing structures while trying to mitigate their shortcomings. There have, however, been exceptional moments when philanthropists contributed to systemic change: merchants helped the theologian Martin Luther spread his ideas in the early Reformation, for example, and prosperous nineteenth-century British radicals, such as the economist Thomas Attwood, championed the expansion of the democratic franchise.

The outcome of this tradeoff almost always influences the political order more broadly, and with it, international relations. From the liturgical system’s role in the rise of Athens to the part played by the Bill & Melinda Gates Foundation and others in trying to fund a more equitable global distribution of vaccines during the COVID-19 pandemic, the strategies pursued by philanthropists have shaped wider events.

That matters all the more in a world as chaotic as today’s. As the 2024 World Economic Forum gathers in Davos, it does so against the backdrop of dauntingly complex and interlocking crises. This tumultuous global moment is also an inflection point for philanthropy. Wealthy donors can sometimes achieve what other entities cannot; they have greater freedom than most states and businesses to experiment and pursue unorthodox solutions to common problems. But in a time of such intense rupture and flux, philanthropy must adopt a more disruptive role, moving out from under the tumbling pillars and walls of the old order and helping lay the foundations of a new, better one.

FROM GILDED AGE TYCOONS TO TECH MOGULS

The philanthropic tradition of the current era begins with Andrew Carnegie, John Rockefeller, and other Gilded Age titans of industry of the late nineteenth century. As Carnegie wrote in his 1889 book, The Gospel of Wealth, the purpose of such giving was not “to feed our egos, but to feed the hungry and help people to help themselves.” These endeavors, however, were fundamentally paternalistic: rich men giving back to the societies in which they had accumulated their fortunes and grandly decreeing how their grants should be used.

Over subsequent decades, this credo would face challenges, including from New Deal–era progressives wary of rich men ascribing to charity what was properly the realm of the state and of McCarthyite conservatives targeting philanthropic foundations as part of anticommunist fearmongering. But the paternalistic approach—recycling the income earned within a certain civic order back into that same order—would continue well into the second half of the twentieth century.

Take the Ford Foundation, founded in 1936 by Henry Ford’s son, Edsel. In 1950, it appointed as its president Paul Hoffman, fresh from his role as administrator of the Marshall Plan in Europe, a core pillar of U.S. foreign policy in the immediate postwar era. He later adopted the same title, administrator, as the inaugural head of the United Nations Development Program, a position that I would later hold myself. One of Hoffmann’s successors at Ford was McGeorge Bundy, who led the foundation from 1966 to 1979 after five years as U.S. national security adviser in the Kennedy and Johnson administrations, a post in which he was one of the leading architects of the escalation in Vietnam. Under Bundy’s presidency, the foundation supported Johnson’s agenda by backing civil rights causes and even offered grants to the staff of the presidential candidate Robert Kennedy after Kennedy’s assassination in 1968.

Look, too, at the Rockefeller Foundation and Ford Foundation roles in the agricultural “Green Revolution” in South Asia, a development program closely tied to the Cold War imperatives of the United States (the “green” in its name an explicit contrast with “red,” as in communist). They were as much loyal partners of a U.S. policy agenda abroad as they were allies of power at home.

In a time of rupture and flux, philanthropy must adopt a disruptive role.

In retrospect, the likes of Hoffman and Bundy resemble secular bishops, legitimized by their social standing, the fortunes behind the philanthropies they ran, and their various trips through the revolving door between the political world of Washington and the foundation world of New York. The foundation leaderships ranked at the pinnacle of social and professional life; I still recall when one foundation president confided to me some 20 years ago that he had resisted nomination as a U.S. cabinet secretary to keep his name in the ring for the job he now held.

The crises of the 1970s—the oil shock, the Watergate scandal, and the bloody denouement of the Vietnam War—would take their toll on philanthropies along with other liberal institutions. But these organizations flourished again in the immediate post–Cold War era. This was the time when George Soros, whose philanthropy the Open Society Foundations I today run, started to scale up his giving: opening the Central European University in 1991, funding myriad organizations in post-apartheid South Africa, and giving its first grants to groups in Israel and the Palestinian territories, along with much other work elsewhere.

In their 2008 book, Philanthrocapitalism, the journalists Matthew Bishop and Michael Green document what might be considered the ceremonial high point of that new golden age of Western philanthropy. They describe how, at a grand event in June 2006 at the New York Public Library, the celebrated investor Warren Buffett signed a series of letters pledging swaths of his fortune to foundations run by his children and to the Gates Foundation. As if that alone did not crystallize the kinship between the titans of the new Gilded Age and those of the original one, Buffett had much earlier encouraged Gates on his philanthropic path by giving him a copy of Carnegie’s The Gospel of Wealth.

The 2006 gathering at the library, however, now looks like the end of an era. The global financial crisis that began the following year brought a rapid decline in public trust in all kinds of political, social, and cultural institutions. In this new environment, philanthropies have found themselves subject to unparalleled degrees of suspicion and doubt—as well as outright conspiracy theories, such as those that have targeted the Gates Foundation and Open Society Foundations.

Partly in reaction to this trend, philanthropies have begun to cast aside the old paternalistic way of working and more frequently let their grantees decide what to do with their money. This “trust-based” philanthropy is epitomized by givers such as MacKenzie Scott, the former wife of the Amazon founder Jeff Bezos, who provide funds without strings attached on the grounds that practitioners know best where such resources can have the greatest impact. It puts the grantees first and reduces the active involvement of the philanthropist—a humbler profile for a more skeptical era.

The Open Society Foundations have always embraced what Soros calls “political philanthropy”—an orientation that is keenly alert to the realities of power and people’s agency—and have therefore been able to play a pioneering role by giving large sums to change-making institutions. In September, for example, we committed $109 million to a new foundation to champion the rights of Roma people in Europe—an organization led by people from the Roma community. In the wake of the Black Lives Matter movement, we made a $220 million investment in emerging organizations and leaders who are building power in Black communities across the United States.

IN SEARCH OF THE NEW

Clearly, this trust-based giving is a better match for the moment than the old top-down paternalism. Yet the sector needs to go further still. The global dashboard is flashing red. Halfway through the implementation period of the UN’s Sustainable Development Goals, only 15 percent are on track, 48 percent are moderately or severely off track, and the remaining 37 percent are stagnating or in regression. Around 60 percent of low-income countries are in or at high risk of debt distress. In 2022, the number of annual deaths in state-based conflicts surpassed 200,000 for the first time since 1986. The UN High Commissioner for Refugees reports that the number of people currently displaced by force surpassed a record 114 million in September, up from 108 million at the start of the year alone. Closely related to all this, of course, is the alarming reality that 2023 was the hottest year on record, a reminder of the urgency of addressing the climate crisis.

The prevailing paradigms of power and government are failing. Both the New Deal order that arose after World War II and the neoliberal order that succeeded it in the 1970s and 1980s had their intellectual roots in a narrow cluster of think tanks within a few blocks of one another in Washington and London. The successor paradigm will probably comprise neither a return to the heavy-handed state intervention of the former nor to the market fundamentalism of the latter, but rather new syntheses of society, markets, and government that may today be hard to imagine, especially from major Western power centers. It will emerge from an array of social institutions, universities, street movements, and field experiments around the world, often in the global South.

The challenge before philanthropies is to identify and support those needles in haystacks. Doing so will require a strong sense of the different directions the world might take. Program officers working in the philanthropic sector must seek out the leaders, campaigners, and thinkers pioneering that change, then help them get on with it on their own terms.

HERETICS, NOT PRIESTS

There is a legitimate role for philanthropy in troubled times, but one that has to reflect them. No longer is it enough for established figures to use foundations and other philanthropies to prop up an existing order. The world of Hoffman or Bundy no longer exists, let alone that of Carnegie and Rockefeller. Today, the sector will find legitimacy only in its ability to help confront the manifold crises in ways others cannot.

In his 2018 book Just Giving, the political scientist Rob Reich brought a skeptical eye to the question of whether foundations have any valid purpose in liberal democracies but concluded that they can indeed be beneficial by fulfilling roles that only they can take on, through their distinctive constitutions. Reich identified two in particular: pluralism (foundations can challenge orthodoxies by pursuing idiosyncratic goals without clear electoral or market rationales) and discovery (foundations can serve as the “risk capital” for democratic societies, experimenting and investing for the long term). Precisely because entities in the philanthropic sector do not answer to voters or shareholders, they can be both radically urgent and radically patient: moving faster than other actors in response to a crisis or opportunity but also possessing far greater staying power, thus the ability to back projects whose success is judged in decades rather than months.

This approach demands that those who were once secular priests—the leaders of the philanthropic sector—abandon their cassocks and accept the mantle of the heretic. Only by challenging the system and agitating on its fringes can they realize their full potential in today’s crisis-bound world.