A moral dilemma: When philanthropy meets inequality

The moral authority of philanthropy in the face of increasing inequality is the most challenging question facing philanthropy today, says a leading US expert.

Dr Jason Franklin, the W.K. Kellogg Community Philanthropy Chair at the Johnson Center for Philanthropy, says economic inequality is driving many of the problems facing society.

It also speaks directly to the role of philanthropy and how and why it exists.

The scale of resources that remain concentrated in the hands of the few are making more philanthropy possible. But it is also deeply problematic.

“When philanthropy grapples with economic inequality it’s grappling with itself. And that’s a very uncomfortable position,” Franklin says.

In an interview with Pro Bono News, Franklin says we are living in the second golden age of philanthropy, because we live in the second golden age of inequality.

He says there’s always been an element of discomfort in honouring and appreciating the generosity of people of wealth and having a skepticism and critique of why they have that wealth in the first place.

“They go hand in hand,” he says.

The recent college admissions scandal in the US, which Franklin says was striking for the lack of surprise everyone felt when it happened, has also served to underscore some of these issues.

It draws attention to some of the ways large dollar donations have made college admissions possible – many of which were entirely legal, but may have crossed a moral border.

“There’s a question of legality but actually we’re called to a higher standard which is morality. And is it appropriate? And what is the purpose of philanthropy? Is it just to benefit those who already have wealth?” Franklin asks.

His work has focused on trying to move philanthropy to be a tool for social change, and for racial, economic and environmental justice. He says there are great examples of where philanthropy has done this but also a lot where it has not.

“When philanthropy grapples with economic inequality it’s grappling with itself.”

He argues scandals such as the college admissions scandal, undermine the moral credibility of anyone in a financially elite position, which includes all major high dollar philanthropists.

While he hopes to see the representative voices of American philanthropy condemning the use of philanthropy for private purpose, he admits it is not always clear cut.

Franklin gives examples of people who have been incredibly generous to the universities they went to and whose children then go to those universities.

“They didn’t make their gifts just because they wanted to get their kids in. But the fact that they made their gifts certainly helped get their kids in,” he says.

Returning to the moral question of inequality, he says we’re caught in a bind.

The concentration of wealth we see today is not healthy for democracy.

He argues that even wealthy families would be better off with a more equal distribution of wealth which would bring a more stable economy, less polarisation and a healthier climate.

According to Franklin, the only way to get there is by building the political power of broad movements of people, to demand policies that ensure a more fair distribution of resources.

This is not to say he does not believe in individual productivity and ingenuity.

“I don’t want to go to a communist or a socialist system,” he says.

But his argument is that we have eroded many of the protections for a fair economic system that now need to be rebuilt.

“When growth doesn’t benefit all people, growth is not actually valuable for the country. And I think we are now coming face to face with the fact that we have leapt past an equilibrium of a distribution of economic resources in a way that feels just and fair,” he says.

“It’s dangerous for philanthropy to pick solutions.”

How do you find the right balance is an issue of contention. Yet Franklin does not believe it is the role of philanthropy to pick the policy reforms or define the policy agenda.

“It’s dangerous for philanthropy to pick solutions,” Franklin says.

Instead, philanthropy must be willing to walk alongside the advocates and organisers who are on the ground building power and developing those resources.

Franklin points to a timidity both in the US and in Australia, with funders who don’t want to be seen as political, which he says is doing communities a disservice.

“We have to be willing to step in and be a little bit more bold and a little bit more brave,” he says.

He is seeing a move towards bolder giving among foundations and new donors who’ve been politicised by the political, economic and climate crises we are facing.

Franklin says the question is will they stick it out?

“Because I’ve seen it over and over that people get fired up, they get activated and they want to fix the problem. And then they get burned out and frustrated when they realise how complicated the problems are,” he says.

“There’s a reason we haven’t eradicated poverty. It’s rather complicated and hard. If climate change was easily solved, we wouldn’t be in the middle of a climate crisis.

“It’s harder to sustain than it is to inspire. And that’s going to be philanthropy’s next challenge.”

He says it is the role of groups and peak bodies like Philanthropy Australia or Australian Environmental Grantmakers Network to sustain the drumbeat for the work, “because it’s both urgent and long term”.

He says it’s up to philanthropy to imagine bigger solutions.

“The resources that especially foundations have offer the luxury to think bigger than organisations that are struggling with how to keep their doors open and pay their bills day to day, get to ask,” he says.

Particularly right now – when we’re facing huge questions around the climate crisis and economic inequality – foundations and major donors must encourage and fund groups to take a step back and ask bigger questions.

“The danger is thinking too small not thinking too big,” he says.