Philanthropy and democracy – An Australian perspective

Despite the power of philanthropy coming under criticism in recent times, Krystian Seibert argues that in fact, philanthropy plays an increasingly vital role supporting our democracy.

In recent times, philanthropy has been subject to an increasing amount of scrutiny.

Although most apparent in the United States, the Notre Dame Cathedral fire and the backlash against the philanthropists who pledged funds for rebuilding gave global prominence to this new era of scrutiny.

One critique of philanthropy, well articulated in Rob Reich’s very readable book Just Giving, is that philanthropy can be a problematic force within a democracy. Although the book generally focuses on the United States, I would certainly encourage people in Australia to read it. 

Reich’s key argument, as conveyed in an interview with The Atlantic, is that “Big Philanthropy is definitionally a plutocratic voice in our democracy . . . an exercise of power by the wealthy that is unaccountable, non-transparent, donor-directed, perpetual, and tax-subsidized.” In other words, the charge is that philanthropy enables wealthy people to further amplify their power in society. This goes against one of the core principles of liberal democracy, that of political equality.

I must admit, for somebody like me, who is passionate about the transformative power of philanthropy and keen to see more philanthropy in Australia in all shapes and sizes, the charge is challenging and confronting. When I first read Just Giving, I found it very thought provoking and did not have a response. I certainly did not have a ready-made defence of philanthropy that came to mind straight away. However, since then, I have been doing quite a lot of thinking, and this is where my thoughts are right now.

I certainly agree that large-scale philanthropy is an exercise of power. I have no issue with such power being scrutinised, which is what I wrote about in this article for The Age not long after the Notre Dame Cathedral fire. I actually think that constructive scrutiny can make philanthropy better. I also think that the increased scrutiny of philanthropy which we’re seeing challenges the argument that philanthropy is unaccountable, because scrutiny is a form of accountability.

On the question of philanthropy’s power, I think large foundations can indeed have a lot of influence when it comes to social change. However, many actors in our society can have a lot of influence.

A smart person with lots of expertise in a particular policy area, the ability to speak and write well, good connections with key stakeholders and with government may also have a lot of influence. A charismatic person, who is passionate about a particular social issue, is good at inspiring people and organising campaigns may also have a lot of influence. A clever journalist, who writes well, knows how to follow good leads and track down the right people to speak with may also have a lot of influence. 

These three hypothetical people would have much more influence in our democracy than the “average person” in the community. Does that also then not go against the principle of political equality? Would we want less of these people in our society, because of the disproportionate influence they have? I would actually say we need more of them!

And I say the same thing about philanthropy. Philanthropy provides one of the essential resources for social change, funding, and that is why it is sometimes referred to as the “risk capital for social change”. 

Philanthropy at its best involves genuine partnership with people working on the front line – staff within charities, community leaders, beneficiaries, researchers and others. Without them, philanthropy’s money does not amount to much and will not have any impact. This is not some sort of unrealistic ideal, but rather how much, if not nearly all, Australian philanthropy operates, based on my own experience.

If it sometimes falls short of this ideal, that’s because philanthropy is not perfect. Philanthropy is an exercise of power, and yes sometimes power can be exercised in the wrong way. And when it does so, it can and should be scrutinised. But it’s also important to remember that different people can have different views about whether something is “wrong”.

One issue I have with theoretical examinations of philanthropy is that they can play too little attention to the evidence “on the ground”. They can also overemphasise the significance of negative case studies of philanthropy, to the detriment of positive case studies. This is where I also have considerable difficulty with the critique of philanthropy as undemocratic, at least in an Australian context.

Just yesterday, I was at an event hosted by Australians for Mental Health, a campaigning group established with the aim of pushing Australia’s political leaders to fix our mental health system. Its work supported by philanthropy.

Earlier this week, at the Philanthropy Australia Awards, the Best Large Grant was awarded to the Maranguka Justice Reinvestment Strategy, an Indigenous-led initiative in Bourke, NSW that is reducing crime and addressing its underlying causes. Its work is supported by philanthropy and both the state and federal governments are paying attention.

The International Philanthropy Award recognised philanthropy’s role supporting the International Campaign to Abolish Nuclear Weapons (ICAN). ICAN’s work saw it awarded the Nobel Peace Prize in 2017.

And we’re hearing a lot of talk about raising the level of Newstart at the moment. The Raise The Rate campaign led by the Australian Council for Social Services is getting some real traction, and this work is also supported by philanthropy.

I could go on.

I do not think philanthropy poses a problem for democracy in Australia. Quite the opposite, I actually think that we are seeing it play an increasingly vital role supporting our democracy. 

I will of course continue to think about this issue, and knowing me, I will probably never stop thinking about it! However, I also look forward to having my thinking questioned and challenged.

The Philanthropy Meets Parliament Summit held in September this year will provide an excellent opportunity to explore this issue in more depth, with “Philanthropy: In the service of democracy” being the theme for the event. I am looking forward to the discussion!