Stories in philanthropy

Philanthropy and democratic societies

Nicole Richards | July 2017

Does philanthropy support or subvert the democratic process? It’s a question that’s getting a lot of air time in the US right now and a few murmurs here in Australia where a discussion of philanthropy’s role in democratic societies was the focus of a recent public event in Sydney convened by Perpetual and Stanford’s Center on Philanthropy and Civil Society (PACS).

Perpetual’s National Manager for Philanthropy and Nonprofit Services, Caitriona Fay, welcomed the 90-strong crowd and stressed the importance of challenging the status quo in philanthropy.

“I think if we accept that there can be such a thing as good philanthropy and bad philanthropy then it’s important that we hear the criticism of philanthropy and that we’re open to different opinions,” Fay said.

Rob Reich, Faculty Director at Stanford Center on Philanthropy and Civil Society and Stanford Center for Ethics in Society, kicked off the proceedings with a 15-minute provocation in which guests were invited to reconsider “conventional opinion about philanthropy—that citizens should be nothing but grateful to philanthropists for their decision to donate.”

Reich presented the provocation in three parts:

  1. Philanthropy as an exercise in power whereby foundations serve as plutocratic voices with the potential to undermine democratic institutions and no public accountability.
  2. His own experience as a member of tenured academia.
  3. A defence of big philanthropy’s capacity to act as risk capital for long-term bets.

One of Reich’s most contentious suggestions was that the explosion in number of small foundations in recent years was cause for concern. Reich argued that funders with limited means would be better served by writing a cheque and donating directly to the charity rather than establishing a foundation of their own.

Fay noted that Australian studies show that philanthropists who do establish their own foundations end up giving away six times as much money than those who opt not to structure their giving.

Co-panellist Deanne Weir, who is herself a philanthropist, successful business woman and Chair of the Australian Women Donor’s Network, emphatically agreed, explaining that her decision to set up the WeirAnderson Foundation with her partner five years ago was strategic.

“The truth is we could’ve kept writing cheques but we wanted to focus our giving and get a stronger sense of purpose by putting a chunk of capital into the foundation,” Weir said.

“We publicly talk about the foundation’s focus, we write annual reports and this all helps give focus and purpose to our philanthropic giving. I think it also provides a level of advocacy in terms of where those dollars can go because we’re always talking about projects that support women and girls—an area that receives only 12 per cent of philanthropic donations in Australia.”

Fellow panellist and Director of Stanford PACS Digital Civil Society Lab, Lucy Bernholz, drew the crowd’s attention to the emerging field of individual data philanthropy, suggesting that the donation of data is yet another form of philanthropic support.

“We have data as well as time and money,” Bernholz said. “Whereas in the corporate world we have social enterprise and B corps which were invented for a purpose, it’s up to us to invent a trusted data philanthropic enterprise for the future.”

Among other themes discussed at the 90-minute event where the drawbacks of short-term funding; supporting advocacy; the expectations on philanthropy to step into areas subjected to diminished government funding; and philanthropy’s fundamental role in supporting and protecting the voices of the disadvantaged.

“We need an ecosystem of funding,” Fay said. “That means we need funders who give long-term, mid-term and short-term. We need perpetual foundations and those with a sunset clause. We also need to be brave enough as a sector to hear other points of view.”

 L-R: Rob Reich, Deanne Weir, Lucy Bernholz, and Caitriona Fay.

Read our one-on-one interview with Rob Reich in next week’s Philanthropy Weekly.

Stories in philanthropy

Find the latest stories and developments in philanthropy from around Australia

See stories