The Perils of Philanthropy: Making a Difference

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Charitable giving totals in the billions each year, but is it enough to give? How much good are we actually achieving in the lives of those who need it the most? Maybe it’s time we started holding ourselves accountable for making a genuine difference.

Microsoft Chairman and co-founder Bill Gates and investor Warren Buffet have been spearheading a move of late to crank up philanthropy among their fellow American billionaires and near-billionaires. They personally called on 80 of the individuals on the Forbes list of the wealthiest Americans and challenged them to sign a “giving pledge,” committing themselves to donating half their fortunes to some kind of philanthropic or charitable enterprise. So far, several well-known names have signed on board.

Philanthropic institutions and charitable organizations have been part of the effort to improve the human condition for a very long time. And I have always wondered how much money in total (from various foundations, corporate contributions, church groups, organized charities, tax-funded grants and endowments, welfare, etc.) has been spent over the years trying to make a difference. So, I did a little research.

One thing I learned is just how hard it is to get an accurate picture of how much money gets spent from all the potential sources. It’s also fairly difficult to know exactly where all the money goes. And statistics vary considerably with various organizations with respect to how much money is necessary to support the “administrative costs” of the larger institutions vs. how much money actually ends up improving the lives of the intended recipients of their philanthropy.

According to some sources, even during this particularly challenging economic time, “giving” by generous folks has never been greater, with an estimated total of upwards of $314 billion (source: Giving USA) donated last year alone. And that figure only represents formally recorded disbursements by major organizations in the United States. The actual total is likely to be considerably more. That’s a lot of money, representing a lot of generosity. And the total philanthropic and charitable spending across the globe is likely to be a truly mind-boggling figure, especially when spending for the last 10 or 20 years is considered.

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There’s little doubt that generous hearts abound, even in our generally dog-eat-dog, materialistic world. And while it’s absolutely wonderful that sensitive and wealthy individuals periodically rally themselves to the noble cause of philanthropy, it seems that a much bigger issue needs to be faced. The bigger issue, of course, is whether our noblest intentions and willingness to spend astronomical amounts are sufficient in themselves to really improve the human condition. The fact that so much poverty, misery, inequality, depravity, etc. still exist is an undeniable testament to the fact that they aren’t. So, as welcome as the most recent effort of Buffet and Gates is, the bigger challenge it would seem is to take a long, hard look at how we are utilizing our charitable resources and whether we are indeed making the kind of difference in the lives of ordinary people that one should rightfully expect for the multi-trillion dollar outlay we’ve made over the years.

The fact that there are so many people of means among us willing to be so generous with their wealth can lead us to some complacency. I think we’ve finally reached the point where we need to do more than feel good about what we as a society are willing to give. It’s about time we really held ourselves accountable for making a genuine difference. And not just any difference. We need differences that match the size of the expenditures we’re making. We really don’t need more wings of buildings with donors’ names enshrined in cornerstones. And we don’t need organizations that spend more on people who decide who gets money than they do in funding worthy projects. We need actual improvements in the quality of life for those less fortunate. We need not only “bang for the buck,” but tangible benefits for our efforts. Perhaps the time has come for us to judge the merits of our charitable endeavors not so much on how generous we’re willing to be with our money but rather on the outcomes our efforts actually produce.

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