Is the charity sector really failing us?

Every so often a think piece comes along that seems to drive huge amounts of discussion and, let’s be honest, hand-wringing amongst those of us who work in the sector. A few months ago it was Dan Pallotta’s TED Talk, The Way We Think About Charity Is Dead Wrong, which argued that charities need to be more businesslike. This month’s candid assessment of everything-that-is-wrong-with-charity-but-you-were-too-afraid-to-talk-about is from Peter Buffett, Chairman of the NoVo Foundation and son of Warren Buffett (aka the Sage of Omaha and architect of The Giving Pledge). And it’s at the opposite end of the spectrum to uber-fundraiser Pallotta.

Peter Buffett’s thinkpiece – provocatively titled The Charitable-Industrial Complex – is well worth a read. It argues that donors engage in ‘philanthropic colonialism’, where giving is a vanity exercise where even well-meaning results in doing more harm than good. The example of Toms Shoes – a buy one, give one model – is a real world example. And his complaint is that the philanthropy of the wealthy is simply trying to solve with the philanthropic left hand the problems that the capitalist right hand has created. Buffett argues that we need to change the system, that we need humanism, not metrics. And he doubts charity is the way to do it: ‘But no “charitable” (I hate that word) intervention can solve any of these issues. It can only kick the can down the road.’

These are not new criticisms. Indeed, I’ve read more nuanced critiques: in The Revolution Will Not Be Funded, the idea of a ‘non-profit-industrial complex’ is developed much further, with particular focus on how charity dampens radicalism and further marginalises the communities most excluded. Even social justice philanthropy, which explicitly tries to address those most marginalised, has been described as an oxymoron, people getting credit for giving back what their ancestors should never have taken in the first place’. And in the UK, the Fabians have long been critical of charity, an issue Stuart Etherington covered in his Attlee lecture last year.

Beyond the charitable-industrial complex

Is such critique valid? In some respects, yes. We would be foolish to ignore charges that philanthropy is motivated by ego rather than altruism, by instinct rather than evidence. It would be foolish to ignore the charge that charity is the plaything of the few rather than the responsibility of the many. It’s why there has been so much focus in recent years on planning for and demonstrating impact. It’s why we should pursue the idea of a democracy of giving, rather than simply chasing the donors that lift our fundraising Return on Investment. And it’s why we should remind ourselves every day that charity is about public benefit, not private gain.

But is Buffett’s critique overdone? I think so. Charity achieves much. Have a look at its greatest hits. And there is more to come: what if the Gates Foundation eradicates polio? And in response to Buffett’s call for more humanism, nothing humanises more than the act of giving.

I wrote last week that we don’t want a voluntary sector preserved in aspic. Buffett’s critique in essence argues for change. So, how do we move beyond the charitable-industrial complex? Whilst I don’t like the description, it’s a challenge worth considering as NCVO looks to its strategy for the next five years. I don’t have all – or even some- of the answers. But it seems to me that a starting point for donors, wealthy and otherwise, is a greater focus on voice and advocacy: funding the day to day unheralded, difficult-to-measure policy, research and campaigning work that attempts to change the system.

For Mark Rosenman of Caring to Change, the solution lies in grantmaking practice: and in particular, the need for grantmakers to better reflect the communities that are most in need of their help. This implies taking account of diversity, power and class in grantmaking strategy.

We also need to, as a philanthropic ecosystem, make sure that charitable resources are going to where they are most needed, not to where they are most asked for. This implies a much better use of data – on need, on spending. And whilst it might seem de rigueur to mention this in every speech, blog or article about the sector, we need a relentless focus on impact: being clear about the changes we want to see and applying our resources to where we can make the biggest difference.

All of these actions are disruptive, uncomfortable, difficult. Which sounds as good as any reason to try them.

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Karl Wilding Karl Wilding, Director of Public Policy and Volunteering, leads NCVO's volunteering, policy, research and campaigning work in the UK and internationally. With lead responsibility for shaping the external environment for the voluntary sector, he blogs about the big issues facing voluntary organisations.

10 Responses to Is the charity sector really failing us?

  1. Karl Wilding Karl Wilding says:

    I realise it’s deeply rude to comment on your own blog, but I’ve had a few comments via Twitter:

    @commoncapital: great stuff. tho it wld be more disruptive, uncomfortable + difficult to argue AGAINST a relentless focus on impact.

    @martinbrookes: I like your blog, but think you are too gentle on Buffett’s NY Times piece.

    And here’s a great blog (better than mine!) on the same article by The Economist’s Matthew Bishop: http://philanthrocapitalism.net/the-so-called-charitable-industrial-complex/

  2. Olly says:

    “It’s why we should pursue the idea of a democracy of giving, rather than simply chasing the donors that lift our fundraising Return on Investment. And it’s why we should remind ourselves every day that charity is about public benefit, not private gain.”

    This from the same organisation that successfully lobbied the Chancellor that it would be better for rich people’s money to go to their ‘plaything’ charities than into democratic institutions through paying their fair share of tax.

    • Karl Wilding Karl Wilding says:

      Olly
      I suspect this isnt something that we’re going to agree on, but my position is both constant and coherent: all charities should demonstrate public benefit. Charities are neither anybody’s plaything nor a vehicle for personal gain.

      There is no personal gain to be had by donating to charity via the gift aid system. The maths are clear: for a higher rate taxpayer to receive a 20p reduction in their tax they have to give a £1 gift to charity. That’s just about the worst tax avoidance scheme I have ever heard of.

      Karl

  3. nick wilson young says:

    Just to add, I realise that much of what I say can be picked apart in terms of ‘but some parts of the sector already do lots of this’, and ‘it’s not either/or, it’s both/and’. My point is more about the overall vibe and feeling I get about our direction of travel, as someone who has worked in the sector for 20 years.
    cheers
    nick

  4. nick wilson young says:

    Interesting to see this, Karl.

    In the last few months I’ve had several conversations on the theme ‘the problem is that we’ve created an industry’. These conversations included talks with the founder of a household-name UK children’s charity, with the founder of a profitable charity consulting firm, and with the activists who founded a radical civil society from scratch during the ex-Yugo wars and now see Western-style charity-business creeping in (not to mention their long term nausea with the international NGO disaster caravan).

    In all cases these thoughtful people, with experience spanning most of civil society, had come to the same conclusion – that once we have a cohort of people whose mortgage payments depend upon the continuation of a certain sort of ‘social change’ sector, radicalism is self-stifled, and it all too easily becomes about continuation, not change. We are co-opted by the system.

    I confess that I am the instigator of these conversations, as it’s been bugging me for years how self-limiting the UK paid voluntary sector (an interesting phrase to see in type!) can be. I particularly contrast my experience working within UK charity infrastructure and my early, and most inspirational, experiences of social change with those same radical, unpaid, persecuted activists during the Balkan wars.

    But it has been striking how many people, many of them in senior positions in the current charity-business, are deeply concerned about the direction we are going in.

    To which end, here is a Karl Wilding-style Top Five Things That Most Worry Me Most About The UK Voluntary Sector:

    1. The very word ‘charity’. It’s high time we stopped using it for all but legal purposes.

    2. Uncritical courting of the rich. Many of us know the pain of trying to run an operation with insufficient funds, or no funds. But while recently writing a piece on major donor fundraising I was struck by how none of the technical advice available, full of euphemisms like “high net worth”, even raised the question about how extremes of inequality actually drive many of the problems we are trying to solve.

    I’ve recently seen charts suggesting that the top 1% in the US own 40% of the wealth. If that’s not right, I’m sure the 1% can afford to sue me, but we know that huge, unhealthy and widening disparities exist. It isn’t the ‘politics of envy’ to ceaselessly point this out. It is the politics of collusion if we don’t.

    3. The rush to deliver public services. I know that charities can often show that they are closer to beneficiaries, and can innovate in ways that the State finds hard. I also sympathise with CEOs who want to secure their staff’s jobs with a State contract. But I think we’ll look back and kick ourselves when we have patchy, underfunded, 1930s-style charity services, while the State permanently redirects the cash to other areas which it has prioritised (because contrary to the dominant discourse, the State can and does find money for the things it wants, whether it is more money for MPs, or Trident).

    I was recently genuinely shocked to hear the head of a small youth club suggest that all statutory youth work should end nationwide because the public sector youth workers aren’t as committed as him. Because there is no way that operations like his, even with a fat contract, can fill that gap.

    4. The new charity managerialism. Many people have queried the incongruence of, for instance, HR practices which lead to such strange sights as human rights organisations offering unpaid internships where the intern will work on advocating for worker’s rights in other countries.

    Working as a consultant, I also meet many inspirational civil society people, even in big infrastructure organisations, who have a genuine critique of planning-everything-within-an-inch-of-its-life. Put simply, social change isn’t a business. It’s a lot more organic, and also just a lot more, if you know what I mean. Most of the best outcomes I can count from my work have been unplanned.

    5. Innovation over Advocacy. I am genuinely worried about the sector wasting its energy on innovating ever-more ingenious ways (amazingly, wonderfully creative sometimes) to fill the bath of social good with our thimbles (stick with my metaphor here for a moment) while the government turns off the taps, pulls out the plug, and then seeks to stifle our attempts to query their bath-filling strategy, or lack of it, saying it is our job to just get on with the thimble-work. I hope that made sense.

    Finally, I suppose my model of social change/activism is of groups of ordinary people coming together to do stuff which the State isn’t yet mature enough to do, or the electorate as a whole won’t yet back the State to do, or which is honestly not best done by the State.

    My concern is that we are turning instead into niche, uncritical paid professionals whose livelihoods depend on fiddling with the status quo, coming together because of job ads, rushing to do stuff which the State has ideologically retreated from.

    However, I must get back to my charity work which pays my mortgage. 😉

    • Absolutely stunning response Nick.
      I honestly agree with every single word.

    • James Derieg says:

      “UK paid voluntary sector”, brilliant concept! It reminds me of a MSF volunteer who complained that Medicines Sans frontiers does not have a career structure for volunteers. I can’t prove it but I believe most of those employed by the voluntary sector, (again!), are funded primarily through state and institutional sources, ie money with strings attached. Another question: How many people employed in the Third Sector on salaries over, say, £30,000/yr, are also Trustees of other “charities”? Furthermore, even when trustees try to get a grip on their paid staff they are entirely dependent on those self-same staff for the info they need. This makes performance management of the senior staff virtually impossible for the trustees.
      You may hate this idea Nick, but I am developing the idea for a law that reduces the employments rights of senior staff in the charitable sector. Specifically, if your immediate line manager is a voluntary trustee, you have very restricted access to applying for unfair dismissal at tribunal. I once had a former chair of trustees tell me, “We tried to get rid of her twice and failed”! When I pressed him about how this could happen he explained that she threatened to take the charity to tribunal, which even if they won would be too costly for the charity.
      Thanks for the link Nick.

  5. Chris Lee says:

    Karl – you’re original blog brought to mind a book from a couple of years ago – Small Change: Why Business Won’t Save The World. In it, Michael Edwards argues, fairly well in my opinion, that the Philanthrocapitalism of the likes of Bill Gates and Buffett snr (whom I like in a funny sort of way)will ultimately not work because it does nothing to undermine the systems that have created the inequality in the first place. Edwards argues for investment in social transformation but that businesses have an interest in maintaining the status quo.

  6. Liam Barrington-Bush says:

    Firstly, echoing Maurice’s comment, yes – Nick has nailed it w/ every word here. And perhaps it’s worth noting that I am (at least) the third ex-NCVO employee to stand behind these comments in the feed.
    Second, Karl – as always, even when I disagree w/ the thrust of your argument, I appreciate that you’re always pretty willing to have it in a public space. This puts you in a considerable minority when it comes to voluntary sector leadership and most organisations, full stop. So kudos due.
    I also want to expand on a couple of points –
    1) The problems w/ large scale philanthropy are many-fold. For one, the Tom’s example is not only a ‘solving the problems of the right hand w/ the left,’ but actually part of the misguided ‘giving people shit they don’t want or need’ approach to charity [A strong list of examples here: http://matadornetwork.com/change/7-worst-international-aid-ideas/%5D. It also describes the ways, by making shoes in China, the company is actively maintaining a system of globally unjust trade arrangements, which are often cited as keys to maintaining poverty, not alleviating it… Additionally, there are all the points about what the hell gives Bill Gates the right to decide, for example, Mexican agricultural policy, by helping push GMO corn on peasant farmers who grew the first varieties of corn in the world, varieties which would almost definitely be lost, if Gates and his Monsanto cronies (Gates Fdn has 1/2 a million Monsanto stocks) win out. Plus there’s the list of stories that emerged from Monsanto’s experiments in India that demonstrate a range of deeper fundamental problems w/ the approach, and which beg the question: why are unelected rich people setting life-and-death policies in poorer countries (or for poorer people, generally), where they’re clearly uninformed or misinformed about the local dynamics at play?

    2) ‘What is more humanising than giving?’ Many things… but ‘giving in closer proximity’ would be one thing. The ‘giving from a distance’ notion that is at the core of so much philanthropy isn’t necessarily humanising at all – and especially w/ the ‘people as numbers’ and ‘people as stereotypes’ fundraising approaches used by so many charities, it can actually be the opposite: giving allows us to reinforce simplified versions of ‘the other,’ missing the nuance and detail that really do make people and situations unique and distinct from one another, making their solutions less-scalable than Gates and Co often presume.
    I would argue that mutual aid is a far more humanising process than giving, as it is not based on perpetuating an established power imbalance. Funders rarely fund mutual aid though…
    Again – even though I disagree w/ a lot of your comments, Karl, thanks for having the debate in public!
    Cheers,
    Liam

  7. Karl Wilding Karl Wilding says:

    Everyone – thank you for thoughtful comments. Whilst we might not agree on the path, I think we’re all wanting to get to the same destination in terms of a better society.

    The comments are important to me and my thinking – so much so that rather than go into detail here I am going to try and write a series of blogs in response, most probably starting with a blog on why I think it is important to use, defend and probably reclaim the word charity…