Unsere Spenden-Party zeigt, wie sehr wir gerade scheitern
Wohltätigkeit ist »in«. Doch mit unserem Scheck reinigen wir vor allem unser Gewissen – und verhindern eine bessere Zukunft.
Every so often a story appears in the newspapers or on television to expose the rotten workings of some charitable organisation. Funds have been embezzled by managers, too much money has been spent on administration, fund raising or high-priced lawyers, or the charity has compromised its beliefs by working too closely with big oil companies, tree loggers or tobacco manufacturers. This is not one of those articles.
Instead, it asks, whether even good charities are bad. And I am going to argue that most charities and philanthropic organisations are not good. Not because they are unusually prone to scandal, but because they make it harder for society to properly address its most challenging problems. They are a diversion on the road to healthy social development, an addictive social Prozac Prozac is one of the brand names of the antidepressant fluoxetine, which is one of the most famous selective serotonin reuptake inhibitors (SSRI) used to treat depression, obsessive-compulsive disorder (OCD) and other mental diseases. It was discovered in 1972 and first medically used in 1986. to help us all forget how bad things really are.
So let’s start!
»So how exactly is your investment going to improve the world?«
A few months ago, I met with the CEO of a large philanthropic organisation in Berlin. He was in his mid-30s, had inherited substantial wealth and was keen to persuade me of the merits of »impact investing«. The Global Impact Investing Network defines this form of investment as »made into companies, organisations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside (or in lieu of) a financial return.« In other words: Investors buy stakes in businesses that are thought to be better for the world. They avoid nasty, polluting businesses like coal, oil and gas or companies that chop down rainforests, and put their money instead into organisations that they consider less damaging. They try to have a positive »impact« through their investments, to be the good guys of the finance world. The number of funds and impact investors grew quickly over the last years, even though the market size is difficult to estimate, because there is no clear definition of what counts as impact investment.
So the conversation went like this:
»It is the fastest growing investment sector! Together [with other rich families,] we are working to invest hundreds of millions of euros, to show that we too can play a role in Felix Austen and Maren Urner write about the challenges we face as the world population grows (German) solving humanity’s myriad challenges.«
»So what exactly are you trying to achieve?«
»A more sustainable world for our children.«
»Can you be more specific?«
Then he talked about the islands of plastic waste drifting across the world’s oceans, the lung infections worsened by exhaust fumes in Paris and the Guest author Eva Lindner writes about unwanted girls in India (German) dreadful poverty in India. He mentioned political divisions in Europe and America, soil pollution in China and Maren Urner and Felix Austen review DiCaprio’s documentary »Before the Flood« (German) melting polar ice caps.
»So how exactly is your investment going to help all these things?« He paused for a long time, staring at the table.
»I’m not sure really. I guess I need to think about this a bit more.«
What he and his fellow »impact investors« are really doing, of course, is conscience laundering. They are washing away the knowledge that their past investments were often not so good for the environment, and that they now have consequences for us all. Despite the impression he wanted to give, his primary goal is not to make the world a better place. It is to make a profit. Like everyone else in finance, The banking and investments business essentially make money from money. They take deposits from savers and investors and spend this money on stocks, shares, properties, wine, tracker funds, gold, stakes in other investment firms and new businesses, for example. They hope that their returns will exceed those of their rivals. After taking off their own costs, they pay some of what they make to those who provided the funds to be invested, and keep the rest as profit. he has to show that he can do better than his rivals (or other family members). So he needs to make as much money as possible, and perhaps even more than those investing in dirty, polluting business.
What makes people like this CEO different is that they want to appear altruistic and good at the same time. It is their way to appear to »give something back«, to sleep a little sounder each night, perhaps, thinking that the world will somehow benefit from their superficial thoughts.
But such investments also increase inequality, because it makes the rich families even richer.
It is an unfortunate and rarely acknowledged fact that the activities of these people will not make the world a The most sustainable world would be one with fewer humans argue Felix Austen and Maren Urner here (German) much kinder or more sustainable place at all. They might stop a few trees being cut down (for a while) or save a boy from working down a cobalt mine until he has had a few years of schooling. But such investments also increase inequality. Because the rich families will profit from their activities, they will get even richer, This is the main result of Thomas Piketty’s famous »Capital in the 21st century« (2014) widening social divisions even further.
Our conversation made me pause and think though. Are other sorts of »good-doing« just as misguided? Perhaps other well-meaning people are disguising something deeply troubling too, whether or not they are the activities of non-governmental organisations (NGOs), charities or other forms of philanthropy. I asked myself: »Is the entire business of doing good not so good after all?«
My concerns grew when I discovered how fast the business of »doing good« has grown.
The number of registered charities in the world has mushroomed in the last few decades, and few people have bothered to ask if this trend is healthy. Singapore had more than 2,200 registered charities in 2015 In Singapore, there are 23% more charities than a decade ago. In the UK, registered charities Data from the government in the UK (1999–2008) received 78% more funds in 2016 than in 2006. And, in the US, where there are Numbers of NGOs in the US from the National Center for Charitable Statistics (2015) more than a million public charities and over 100,000 private foundations, Overview over the non-profit sector in the US from the Urban Institute (2015) revenues have grown twice as fast as the overall economy.
At first glance, all this charity and philanthropy appears good. Yet, in reality, these organisations only exist because a fundamental problem is being ignored. Charity is an attempt to patch the parts of the economic and social system that have failed.
Throughout the rich world there are charities that help David Ehl spent 24 hours with homeless people in Cologne (German) the homeless. Others take You probably also throw away 2kg of food every day (German) the food thrown away from lavish dinners in 5-star hotels and give it to the starving. Some focus on The Sea Shepard Conservation Society focuses on marine wildlife conversation saving whales, protecting eagles or stopping the ivory trade. Some provide clean water to people in Africa, educate children in India or inoculate babies in Brazil. There are charities to stop illegal logging, to prevent drilling in the Arctic and give elderly donkeys a nice retirement home.
All these efforts may be well intended. But they are occasionally driven by less enlightened motives. And in almost every case they are a poor way to make up for some of the shortfalls of modern social development, because they treat the symptoms of humanity’s social problems, not the root causes. They are an attempt to mop up what economists call the »externalities« An externality is an effect created by economic activity, which is not calculated in the price of the activity. They can be negative or positive. Negative externalities are one of the biggest causes of social and environmental problems. Take the car industry: The company that produces a car pays for materials, personnel, marketing etc. However, the production of the car probably causes harm to the environment and sickness to people who are mining certain materials for the car. These costs – the externalities – are not priced in. Not for the company nor for you. When you drive your car, you are contributing to global warming, yet when buying your car, you are not paying for these costs that the car is causing. These costs can be internalized via taxation. – rather than leaving them for us all to see. They hide what is really going on by offering us a comfort blanket to hide behind. They are a substitute for a good society and, as they grow in number, an ever-larger barrier to the sort of structural change that is needed.
Let’s look at a few examples:
- ######## Homelessness: The charities that offer beds to the homeless, and feed them, are of course doing something worthy. But giving shelter and some discarded foie gras to those without homes and jobs is not going to fix the cause of their problems. Rather, the organisations which do this good work give the public and the politicians a sense of comfort.
- ######## Deforestation: Most of those fighting to stop the deforestation in Indonesia or Brazil, lobbying villagers to stop burning trees, cajoling palm oil companies to use sustainable supplies and persuading politicians in Jakarta and Brasilia to introduce protective laws, are at a loss to understand The book »On the Edge: The State and Fate of the World’s Tropical Rainforests« describes this failure (2015) why they have failed to achieve much in the last 20 years and why the destruction continues.
- ######## Poaching: Similar to the deforestation example, people trying to save the whales and tigers often fail to see, that it is the wider system of human social development that is problematic, not the action of a few thousand palm oil farmers, wild-game poachers or fishermen.
If the economic system keeps on rewarding people for their destructive activities, they will carry on setting fire to trees, turning tiger bones into powder and whales into sashimi, and no amount of well-intentioned giving from people sitting in Munich, Manhattan or Melbourne is going to change that. It just makes those who give the money feel a little better – until they discover that the problem has got worse.
Yes, I happen to work for one of these do-gooding NGOs myself, which seems to make what I am saying a little hypocritical. Not so. If humanity had a properly functioning system of social development, which served the needs of people within the bounds of nature, and the good sense to manage the human population, the Club of Rome The Club of Rome was founded in 1968 by Italian industrialist Aurelio Peccei and Scottish scientist Alexander King. Today it is an international organisation of individuals who share a common concern for the future of humanity and strive to make a difference. Its mission is to promote understanding of the long term global challenges facing humanity and to propose solutions based on scientific analysis, communication and advocacy. would close tomorrow.
By their nature, a great many charities and philanthropic organisations are flawed from the beginning, because they …
- ######## … depend on the donors: They have to consider the needs of their donors before their good causes, because this ensures a healthy flow of funds. Unfortunately, this also warps their agendas. Just as zoos ask visitors to sponsor their imprisoned animals and most people prefer to donate to the tigers and lions, leaving the vast majority of the other caged animals poorly supported, charity and philanthropy are a means of supporting society’s big cats. Review: Caring about humanitarian crises (2017) Donors give to causes which appeal to them, rather than to Which is the main focus of Effective Altruism as presented by Han Langeslag (German) causes where there is greatest need.
- ######## … are prone to inefficiency: It is the task of the managers of charities and philanthropic businesses to decide where and how donations are spent. Governments are subject to regular democratic or political review, as well as public scrutiny and control. But the charity and philanthropy business is not. This means that these organisations are often wasteful, duplicative and inefficient.
- ######## … get money with strings attached: Maybe donors want to discourage the use of contraceptives or want to promote American values and the teaching of the church. Worse, many organisations fail to properly understand the issues they are dealing with or The documentary »The Trouble with Aid« shows why aid is problematic (2012) meddle in human catastrophe for their own reward.
- ######## … undermine the freedom of the recipient: In many cases, money from charities and philanthropists creates an unspoken and unwelcome debt, which can be avoided if aid is given in other ways. There are however a rising number of charities that ensure that overhead costs are minimised and as much as 90% of charity money arrives at the person in need of the aid (e.g. Give Directly. Moreover, direct cash transfers, i.e. simply giving people money, is one way of ensuring freedom is not undermined and no debt is created. Because many such charitable activities have been seen as »doing good« however, these consequences are ignored.
The activities of most philanthropists are founded on an acceptance of social injustice and failure. Today’s billionaires do not fight to change the economic system which created their unequal wealth. Few seem to see any inconsistency or irony in offering help to the poor, or feel any sense of unease at the need for their »impact investments«. The The website of the Bill & Melinda Gates Foundation Gates Foundation attempts to bring greater social inclusion to developing countries for example, despite being the product of a system which encourages social division.
It may be laudable, of course, for Bill, Melinda and their friends to think they The Gates Foundation also realised that politics is important for permanent change (2015) can improve some people’s lives by offering medicines and encouraging research. It might be good for other philanthropists to provide finance to educate people in less-developed countries or support bringing water to the poor. It could even be socially useful for California’s technology billionaires to give some of their wealth to new business start-ups through seed financing.
Fixing humanity’s major social and environmental problems is the job of elected governments.
But having a few wealthy philanthropists and charitable business managers sit in comfy offices handing out financial alms to protect the environment or help people in need is not a good model of human social development. Fixing humanity’s major social and environmental problems is the job of elected governments and it is a measure of how far modern societies have been blown off course that we think that it is Han Langeslag writes about privatisation and a new movement away from it (German) something that can be privatised too.
So what should be done? Well, I am certainly not suggesting that we shut down all the world’s charities tomorrow, or even next year. What I am suggesting instead is that our societies reflect a little more on what is happening here. That the number of charities is growing so fast is a sign of our problems getting worse not better. It is a sign that the foundations of our societies, our civilisations, are weakening.
As individuals, when we give to charities, we should think a little more about what these organisations are actually achieving, and make our feelings known. We should favour charities which want to tackle the causes and not the symptoms of the problems they focus upon.
Most of all though, there is a need for wider social debate.
Regulators can do more, too. They can ensure that charities are more publicly accountable for what they do, and limit their number where there is obvious duplication.
Most of all though, there is a need for wider social debate. Societies need to think much more deeply about why these charities are needed, and think even more about how to make them unnecessary.
When it comes to philanthropy, the steps required are simpler and easier. Wealth and death taxes should be increased so that all the surplus funds being managed by rich families are in the hands of elected governments, and then used in the interests of the majority. It is in the democratic interests of the 99% for Individuals like Bill Gates and Warren Buffet are now also in favour of tax regulation (2015) Mr. Gates and his friends to have their financial wings tightly clipped, in other words, and for professional servants of the state to allocate this money for the benefit of all.
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