There has been some debate about whether the LDS church should be investing in shopping centres and upscale housing when it could be saving lives by lifting people out of poverty. This debate has missed a key feature of the broader landscape of philanthropy over the last 70 years, the move toward philanthrocapitalism. The similarities and differences between philanthrocapitalists, such as Bill and Melinda Gates, and the LDS church are revealing because they highlight to whom particular criticisms should be addressed. In short, while dissatisfaction with this model of charitable giving is a defensible position, consistency might suggest that such criticisms also be directed toward a neoliberal culture of giving currently ascendant in our societies.
Criticisms of the church’s investment strategy are usually framed around a fairly simple argument: the church should not be concerned about X when Y is such a major issue. The Xs may be the City Creek mall, land for cattle, or farming. The Ys are similarly diverse, e..g, poverty or starvation. The response to this argument emphasises that caring about X now allows us to do more about Y in the long-term. Both sides of this debate are quite persuasive and have some similarities to the debate concerning philanthrocapitalism.
This is unsurprising because the church’s current model of philanthropy is underpinned by the same principles that drive philanthrocapitalism. In short, philanthrocapitalism is the idea of ‘doing well by doing good’. It is the merger of neoliberal market economics with altruism and a vision of the common good. Philanthrocapitalists attempt to apply market efficiency to the problems of poverty, HIV/AIDS, or infant mortality. This TED talk is a pretty good example of what philanthrocapitalism is all about. Bill and Melinda Gates are the philanthrocapitalists par excellence.
The Gates Foundation invests huge sums of money in tackling issues that they believe are the most pressing concerns for global health and education in America. However, the Gates Foundation has also been criticized. First, it stresses health inequalities in areas that do not directly affect their financial partners. For example, the Gates Foundation are substantial shareholders in McDonalds and Coca-Cola. At the same time they have been notably quiet on the obesity pandemic, which is partly attributable to changes in nutrition consumption. Second, the Gates Foundation does not see a conflict in investing in companies that have harmful labour practices. Third, the Gates Foundation has disproportionately focused their research investment in technologies and companies centred in the Global North. Fourth, there is a lack of transparency regarding how priorities are set and how decisions are made. These criticisms merge because underlying the ethos of the Gates Foundation is the realization that ‘the super-rich need to stay super-rich in order for their charitable enterprises to function’. In short, the church and the philathrocapitalists share some of the core values behind their charitable giving.
There are two crucial differences: 1) tithing and 2) profit maximization.
The philanthrocapitalists are using their own wealth to fund such projects, let them spend it how they want. The church, in contrast, is funded largely by individuals who donate their income to the church, who then make decisions about where this money is spent. Should not the church’s decision-making process reflect its voluntary acquisition process? While this might be a positive move, what is important here is that, again, the church and the philathrocapitalists are not all that dissimilar. A substantial proportion of the investment from philanthrocapitalists, particularly those driven by social entrepreneurship, is backed by government money. In other words, our taxes are underwriting much of the risk-taking involved in philanthrocapitalism. This under-writing function is incredibly important because, as yet, there are very few ventures where financial success and effective philanthropy are found together. In short, both the philanthrocapitalists and the church are financed through collective contribution mechanisms. This difference between the church and the philanthrocapitalists is really not all that great.
The second difference focuses on profit maximization. Gates wrote in Time magazine in 2008 ‘the poorest two-thirds of the world’s population have some $5 trillion in purchasing power… it would be a shame if we missed such opportunities’. Philanthrocapitalists are still concerned about ‘doing well’ and bottom-line considerations are vitally important. In contrast, the church’s charitable giving – to my knowledge – is not. Yes, the financial arm of the church has some of the same problems faced by the Gates Foundation (see list above) but their charitable giving is altrusitic and separate from the financial side. That is, they are free to share their money in whatever ways they believe are most effective, which is one reason why we are so good at disaster relief. We can rebuild when the opportunities for financial reward are limited.
While I still have concerns about the current model of philanthrocapitalism adopted by the church, they are the same concerns I have about the Gates Foundation. I admire the philanthrocapitalists. No doubt they are generous, driven, and sincere. They will do some good in the world. The church too, except that the church’s particular brand of philanthrocapitalism is even more progressive and, potentially, effective than that currently modelled by the Gates Foundation.