A quick response to “The Charitable-Industrial Complex”

Peter Buffett’s “The Charitable-Industrial Complex” op-ed is notable because only rarely do wealthy people admit there’s something deeply morally wrong about accumulating wealth and the widespread existence of poverty:

As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to “give back.” It’s what I would call “conscience laundering” — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.

But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over. Nearly every time someone feels better by doing good, on the other side of the world (or street), someone else is further locked into a system that will not allow the true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life.

While I’m happy to hear this critique and glad that it’s passed into the mainstream media so that elites are paying attention, I wish there was more of a direction here about where to go next.

What I like about it: Pointing out big problems: the classist misimpression that the wealthy know best about how to improve the lives of the poor, the idea that managerial and capitalist logic can easily be applied to problems that are essentially about public goods, the unwillingness of donors to give up control when they give their money, the notion that unconscionable gathering of wealth can be laundered by “giving back.”

What I worry about, especially among US-based radicals: The idea that simply abandoning or destroying these institutions or the flow of wealth they represent will solve things. This is why I’m resistant to naming this an “industrial complex”—something that must be destroyed.

The reality is that resources are wrongly distributed from the global South to a rich few every day, leaving behind both injustice and unmet needs. We can, and should, attack the injustice head-on, and fight the looting of the world by corporations and their corrupt associates in governments. But, we also need to build an infrastructure that provides public goods, like the eradication of polio, equitable titling of land, ambulances in rural communities, and emergency food assistance. The struggle is not to stop the institutions that distribute resources from northern donors to such ends, but to make them functional and to make them accountable to the people they serve.

Frankly, both liberals and radicals in the US are bad at putting their money where their heart is in challenging third world poverty. When I visited the Zapatistas, I saw desperately needed ambulances funded by Italian squatters. In Bolivia, left parties from Scandinavia run their own alternatives to the official aid system, while US Americans just complain about USAID without building alternatives. Indigenous and small farmer titles under agrarian reform there happened through official development assistance funds paired with a radical government.

Bottom line: change can cost money, and we need to think seriously about how to insist that it flows where its most needed.

2 thoughts on “A quick response to “The Charitable-Industrial Complex”

  1. But the specific institution of philanthropy IS literally stealing from the public infrastructure, no? A critique that these charitable institutions are tax sheltering what is actually public money in the first place is apt here. Part of the reason there is not money for infrastructure is because public money that might otherwise be (arguably) democratically shaped is in fact consolidated into interest-accruing foundations where wealthy people get to decide which lives matter. You don’t need to desire the fall of capitalism worldwide for it to make sense that foundations with trillions of dollars need to give that money up to the public, right?

    I agree with you wholeheartedly though about thinking about challenging poverty over challenging capitalism. And while it’s promising to hear a critique from Peter Buffet, the problems of the “CIC” as he identifies it (twice) are located in preservation of chastity in third world girls. His analysis is about rich people piety after all, LOL.

    Great blog, Dr. Bjork-James!


    • Catbakaus is right that charitable donations are encouraged by tax exemptions. Effectively this means that about 35% of the cash donated would have been tax revenue, and the remainder would have been additional wealth of the donors. As such, this is a less effective way of parting the wealthy and their money than just plain taxing them. On the other hand, if there’s some public good for which a rich donor exists, the effect of pushing it off on the CIC is to give that thing a funding boost. That is, if the government decides to leave malaria to the Gates Foundation instead of the CDC, they give up $350 million in taxes but see $1 billion in health spending in exchange.

      The real racket for nonprofits is wealthy-to-wealthy transfers of resources, like subsidizing the education, opera houses, and self-indulgence of fellow elites with a tax break. A wonky solution (in the absence of challenging capitalist concentration of wealth in the first place) would be to tax charitable donations at [a large fraction of] the marginal tax rate of their beneficiaries, so that malaria cures would get the full write off but museums with $45 admissions would not.


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