The effectiveness of philanthropy is an age-old issue, but it's particularly urgent given a recent push towards large-scale giving, writes Dayo Olopade at The American Prospect. She takes the Gates Foundation as a case study, keeping an eye on the Gates-Buffet brainchild The Giving Pledge, which the Wire covered last month. Large philanthropic enterprises like the Gates Foundation have to deal with a specific set of problems.
One of the first challenges that an organization like the Gates Foundation faces, explains Olopade, is "mission creep": employees are under constant pressure to find new projects, all while "marketing multidimensional health, educational, and trade solutions on six continents, in dozens of languages, as soon as possible." There's also a more classic philanthropic problem:
The tension between what the Center for Effective Philanthropy calls "program impact" and "institutional effectiveness." The former is the data that the Gates Foundation lives by: doses of vaccines distributed, lives saved, dollars and manpower deployed to attack a problem. The latter refers to the sustainability of the change produced--and is harder to judge. Many experts have found that good intentions still produce unintended consequences. When a Gates-backed NGO hires all the best nurses in a poor country, for example, it heals the sick but also siphons human resources from the local health infrastructure. Scaling up global development contributions risks provoking "Dutch disease," when a sudden flood of dollars causes damaging inflation in local economies.
Beyond these risks, of course, there's the simple concern that money ends up in the right hands instead of "trapped in bureaucracies or banks, or siphoned away by opportunistic foreign governments." Nevertheless, Bill and Melinda, heartened by their success, have "doubled down on the presumption that overwhelming financial force can make lasting change." Is that the case?
Olopade quotes many people who cite the successes of microfinance and various philantropic-free market hybrids. "The Gates Foundation does work with some social investors and entrepreneurs," she notes, "and has sometimes combined grants with low-cost loans." It's a matter, she explains, of "teaching a man to fish, applied to global philanthropy."
The best model for getting the most bang-for-charitable-buck doesn't seem to be 100% clear. But the bottom line, she concludes, particularly with 40 billionaires' fortunes scheduled to flood into the system, is that "the philanthropic world must change gears."
This article is from the archive of our partner The Wire.
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