10 Hard Truths About Philanthropy

23 October 2020

From a Distance Philanthropy Looks Like It’s Simply About Generosity. In Reality Its More Complicated.

What does the word philanthropy mean? It’s the desire to help others, usually done by a generous donation.

So, Aluxers, the big question is… does this generous donation make a substantial difference in the lives of others?Does the money get to where it needs to go and who ultimately benefits from these donations?

We’re going to play the role of devil’s advocate today and highlight a few areas of concern when it comes to philanthropy and those that call themselves philanthropists.

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Philanthropy isn’t the most interesting topic. To spice things a little bit, here’s a fun YouTube video on this article:

With that out of the way, let’s get to the first reason that makes philanthropy more convoluted than we believe.


Not All Agree That Philanthropy Should Benefit Any Cause

We recently published two videos: 15 Reasons Why Money Doesn’t Solve Homelessness and 15 Reasons Why Money Won’t Solve World-Hunger, where we highlighted some scary statistics.

There we mentioned that 1 in 9 people go hungry every day. 1.6 billion people are considered homeless, without adequate accommodation available to them. For every 1,000 children that are born, 39 will die from preventable illnesses like malaria, diarrhoea, and pneumonia. 1 in 5 children do not attend school, and 8.9 % of people do not have access to a private facility to defecate.

The stats are frightening and there are plenty more where that came from.

So, when people want to donate their money to a cause – should they have freedom to choose where their money is spent?

Sure, the knee jerk reaction is yes, it’s their money… but let’s read about the incident that occurred in France not too long ago. Notre Dame was on fire. Out of nowhere came funders funnelling in billions to rescue it. The likes of Apple, L’Oreal, Chanel, and Dior all rushed to donate.

While this was happening, people were and still are starving in Yemen – in what the UN has called the “world’s worst famine in 100 years,” people have no access to clean water for drinking, drought has torn down farming communities and left people with nothing.

These causes are urgent, yet money is given to build music halls, art gallery’s or playgrounds.



Philanthropists Are Often All Talk and Little Action

In the book, Winners Take All: The Elite Charade of Changing the World, which you can listen to free on audible by using our code: alux.com/freebook – Anand Giridharadas exposes how the elite will be fully involved with philanthropic ventures, fighting for equality, as long as it doesn’t threaten their position at the top.

He uses the concept philanthrocapitalist a lot and speaks about the failure of Apps and PowerPoints to really make a difference in the lives of those that need it.

In a powerful article written by Lynn Parramore, titled Toxic Philanthropy? The Spirit of Giving While Taking, she highlights how philanthrocapitalist’s will always speak about the victim’s plight, but fingers are never pointed at the perpetrator.

Philanthrocapitalist’s remain unaccountable. She sums up her article with the following, “The emperor may stand there in his organic underpants waving a pie chart, but in the court of public opinion, it is increasingly obvious that he’s not in the least interested in dismantling his own palace.”


Charitable Donations Don’t Ultimately Change Anything

Aluxers, the thing with charitable donations is that sure, initially it’s all exciting and people can do a lot to improve things, but if there is nobody to maintain the changes, they just go to sh*t.

Philanthropy goes wrong often, and here’s an all too common example. Mission trips.

We all know a religious organization of some sort who has decided to pump thousands of dollars in sending a family or individual into a 3rd world country to go and preach and save humanity. They come in with all the bells and whistles and start churches, schooling, projects… whatever… and then leave once their time is up.

The community is often left with incomplete projects, or without the proper knowledge and funding to keep it going.

And ultimately, Aluxers, who benefits from those mission trips? The people heading there on a global adventure. It’s called the “White Saviour Complex” and refers to white people thinking they’re helping out poor, non-white communities, when actually, they’re only serving themselves.

Which leads us directly to our next point.


Philanthropy Should Not Be About Throwing Money at a Problem, but Rather, Empowering the People

You see Aluxers, the problem with people thinking that money will solve all these “problems” is that… well… it doesn’t.

If we keep throwing money at the problem, there will never be a point where the community is empowered to make changes themselves. There are some serious repercussions with this kind of thinking.

For one, it’s patronising to the people you’re trying to help. It shows that you don’t trust that the community can do for themselves what you’re doing for them. It’s also enabling people to do nothing, to not learn to provide for themselves. Why should they when people are just going to stream in and do it for them?

Those coming in to “help” don’t take guidance or listen to advice from locals and do things their way, which may not benefit the community. And finally, it often shames the community and stirs up feelings of helplessness.

This can be eradicated by giving a voice to the voiceless. Teaching skills and sharing knowledge. Listening to the actual needs of the community and not trying to fix problems in another country just because you’re white, when you wouldn’t know how to fix them in your own country. *mic drop*


Not All Charities Are 100% Transparent

Sadly, non-profit scandals are a dime a dozen. From a bookkeeper crooking the books in a home for disabled children in Port Elizabeth, to Oxfam staff hiring sex workers in Haiti. From Gospel for Asia swindling donations intended for India’s poor, to the Wounded Warrior Project who blew millions on parties and hobbies.

CNN reported on this travesty, stating, “Compared to other veterans’ organizations, Wounded Warrior is giving less to the people it serves…Disabled American Veterans Charitable Service Trust spends 96 percent of its budget on vets. Fisher House devotes 91 percent. But…the Wounded Warrior Project spends only 60 percent on vets.”

Fortunately, they’re on the road to recovery… with new management giving the charity a much-needed overhaul.

Speaking of management, have you ever thought of how much they’re paid? Let’s find out next.


Charity CEOs Earn Top Dollar and Philanthropists Are Paying Those Salaries

Let’s just say, that not many non-profit CEOs are doing it for the love of the cause. Many are surprised to learn that some salaries exceed a $1 million a year. The highest paid CEO is from the Boys and Girls Club of America, earning in the region of $1.85 million a year.

Running a charity organization is the same as running a business, and often, these CEOs could be earning far greater salaries in the corporate sector.

To give you an idea of some other salaries, the Metropolitan Museum of Art CEO earns around $1.5 million a year, $1.2 million goes to the National Centre for Missing & Exploited Children… and honestly Aluxers, can you imagine what a tough job that must be? And then the National Jewish Health’s CEO earns just over a million a year.

CEOs of NPOs (non-profit organizations) that work for animal or environmental causes, earn significantly less than those working for human causes. Shedd Aquarium in Chicago and the Rocky Mountain Institute each pay their CEOs about $600k a year.

On the other extreme of the scale, we have those battling for minimum wage. Find out “Why Raising The Minimum Wage Means The End Of Unqualified Labor and Rise Of Unemployment.”


With Great Power Comes Great Responsibility

Having just given you a broad idea of what the CEOs of philanthropy can earn, it’s important to understand that there is a responsibility attached to that paycheck.

As in the example of the National Centre for Missing & Exploited Children, current CEO is John F. Clark. He has served as the Director of the United States Marshals Service and served in the United States Capitol Police and the United States Border Patrol.

The National Centre for Missing & Exploited Children deal with issues relating to missing and sexually exploited children. Since its launch in 1998, they have helped to recover 215,000 children. They’ve received more than 6.6 million tips off of suspected child sex offenders and investigated over 153 million child pornography cases.

Of his role as CEO, co-founders John and Revé Walsh have said, “John Clark’s credibility and hands-on experience is outstanding. His fight to protect children is well known. It’s a perfect match.”

When you consider those stats, the position of CEO is mentally and emotionally taxing, and you need the perfect person to lead the organization to protect the children.


Volunteers Can Often Do More Harm Than Good

Voluntourism has become a buzz word over the past couple of years and it’s a word that explains how people travel and do good at the same time. Similar to “eco-tourism,” except the focus is on helping people rather than the environment.

Right, so English vocab out the way… are Westerners doing more harm than good while on these voluntourism trips? Yes and No.

Despite the noble intentions of the volunteers, most of them have no skills to offer. So, in the case of a volunteer program in a Nepalese village, one student wrote that, “There are few things more cringeworthy than watching 20 British schoolgirls trying to build a well under the scalding Nepalese heat.”

Another volunteer in Tanzania mentioned how terrible they were at basic construction, that at night time the locals would tear down what they had built and rebuild it, and would never say anything as they didn’t want to offend anyone.

In these types of scenarios, money given directly to the charity would have been far more beneficial as locals could have been employed to build the structures, and it would have provided jobs and food for the community that need it most.


Should Charities Take Money From the Likes of Jeffrey Epstein?

Dirty or tainted money being used for charitable causes is a hot topic. The Sacklers – as just one example of many – have always been known for their generous donations to non-profits. Head to the Louvre, and there you’ll have come across the Sackler Wing of Oriental Antiquities, or the Sackler Gallery in London, which profited from donations from the Sackler family.

The Sackler family have become known for a lot more than just their generosity, and now many non-profits are shunning any future donation from the Sacklers.

So, why is that? Their company, Purdue Pharma, are makers of the highly addictive painkiller, OxyContin. And despite being fully aware of the dangers of the drugs, have been marketing it aggressively. By doing so, they’ve been complicit in fueling the deadly opioid epidemic.

It’s ethically complicated.

Sex offender, Jeffrey Epstein, made contributions to MITs Media Lab, as well as hospitals, universities, film festivals and more… but were those donations just a cover up to improve his image on the forefront while all that sh*t was happening behind the scenes?

Ironically, accused sexual predator Harvey Weinstein gave a $5 million donation to the University of Southern California intended to support female filmmakers. They have since rejected the gift.

Another ethical dilemma is donations given with limitations. A donation of $100,000 was given to the Girls Scouts of Western Washington with the proviso that not a single penny was spent on transgender girls. The girl scouts decided to return the money.


It’s Another Way of the Rich Getting Richer

Let’s be honest, the rich can deduct taxes from large donations.

Stanford scholar, Rob Reich, gives an interesting perspective on this. He writes in a paper called, “The Problems with Philanthropy,” the following:

“When a wealthy person taxed at 40 percent of their annual income makes a gift $1,000 gift to a soup kitchen, the government forgives 40 percent, or $400, of their gift. So, the cost of their $1,000 donation to them is $600. But when a middle-class person taxed at 20 percent of their annual income makes that identical $1,000 donation to the same soup kitchen, they are forgiven $200. The cost they pay is $800.”

In a nutshell, even donations favour the wealthy!

If only every donor took to heart what Chief Executive Officer of the United Nations Foundation, Kathy Calvin once said, “Giving is not just about making a donation. It is about making a difference.”


Aluxers, what is your stance on taking tainted money for a charitable cause?

We’d love to hear your thoughts in the comments below.