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I think there is a general consensus that philanthropy simply cannot replace government capacity, but it can do certain things well, such as taking on risks that governments do not.
While government is more or less ‘permanent,’ philanthropy needs to concentrate on things that can be solved and will then no longer require funding at a specific point. For example, the unhoused population is a public policy problem that just isn’t solvable by philanthropy. The problem is that we currently have no way of channeling philanthropy so that its effectiveness is maximized.
How do billionaires make sense of their wealth and philanthropy?
They often think that their commercial success translates into great competency in philanthropy as well. Bill Gates is an example.
Gates makes an interesting point about how he is more effective with regard to philanthropy than he was with regard to creating the personal computer. I have to disagree. Yes, the Gates Foundation has ‘saved many lives,’ but the same result could have been accomplished with more attention to social equity and a more transformative effect on the world.
Gates could learn things from MacKenzie Scott and others, where we do see a very different way of redistributing wealth. There are lots of other good ideas, such as using the estate tax to prevent substantial inherited wealth.
How does MacKenzie Scott’s philanthropy differ from how other billionaires typically approach giving, and what lessons can they learn from her?
First, she is strategic in her giving. Second, she tends to invest more directly in social justice issues such as women’s rights and Historically Black Colleges and Universities. Third, she has control over who receives her donations via consulting groups that select the top nonprofits in a given field, but limits that control to the front end of the philanthropic process. Fourth, she does not have a powerful grant system or foundation established, and does not want to tell recipients what to do with the money.
So, her ‘trust-based’ philanthropy is different because it reduces the power of the donor over the recipient. She trusts those closer to the ground to do their job without her micromanaging funded projects.
Other billionaires could learn from this by removing themselves more from the entire philanthropic process and empowering more those who are doing the actual work.