Peter Buffett’s Solution-Free Critique of Big Philanthropy

I spent a year editing a philanthropy section at The Daily Beast. During that time, I often felt frustrated that corporate and celebrity donors seemed to lack understanding of the systemic causes of the problems they wanted to solve. A good example is what goes on in the Congo. Philanthropic and foreign aid dollars stream in to efforts to provide medical and psychological services to the victims of mass rape, but Western governments and corporations have expended very little will to end the regional, mineral-fueled war that is the root cause of the sexual violence there. As a result, many rape victims return to their villages and are raped again. Another good example is female genital cutting. The most hyped anti-FGC effort is conducted by the non-profit Tostan, in Senegal. A new UNICEF report finds no significant decrease in cutting rates in that country. Meanwhile, in the Central African Republic, an anarchic nation with fewer philanthropic interventions, cutting rates have decreased by almost half. Why? Nobody really knows!

So I was gratified to read Peter Buffett's Sunday Times op-ed, which shines a powerful light on the problem of philanthropy disconnected from political and economic systems: "Because of who my father is, I’ve been able to occupy some seats I never expected to sit in. Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left." 

Yes. Buffett doesn't explain how to solve this problem, but one place to start is with evidence. He complains that microfinance, for example, "feeds the beast" of the Western "system of debt and repayment with interest." This is a rather quixotic critique. The real problem with microfinance is that the most credible research finds that behind the heartwarming anecdotes of single moms who launch hatmaking businesses, these loans have no broad track record of success in lifting the poorest of the poor out of poverty, and in fact end up saddling many families with debt they cannot repay. A far better idea is for charities and governments to simply redistribute free money — no strings attached — to the poor. 

Another solution is to ask where the non-profit sector is truly the most effective actor, and where less corrupt government–supported by progressive taxation–must step in to solve deep-seated social and economic problems. The Buffetts are liberals who support higher taxes on people like themselves, though for some reason Peter Buffett doesn't mention the word "taxes" in this op-ed. Nor does he mention government regulation of international corporate labor and manufacturing practices, which could help solve some of the most pressing problems of poverty in the developing world.

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