Market-based philanthropy must actively include beneficiaries to be effective

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There is a growing trend to treat philanthropy like a business venture, framing development challenges as business opportunities, donations as investments, and beneficiaries as entrepreneurs.

by Steph Haywood, Prof Tobias Jung and Dr Shona Russell.

Overview

There is a growing trend to treat philanthropy like a business venture, framing development challenges as business opportunities, donations as investments, and beneficiaries as entrepreneurs. This framing can increase funding for social issues. However, neglecting beneficiaries’ voices and experiences risks allocating philanthropic resources on assumed rather than actual needs.

These are the key findings of our recent research article – “You’ve Been Framed”: A critical review of academic discourse on philanthrocapitalism. In the article, we critically review 186 academic publications on ‘philanthrocapitalism’ – the strategic application of market- and business-based values and methods to philanthropic practice. Those driving that trend, often referred to as philanthrocapitalists, tend to have considerable influence over both philanthropic practice and public policymaking thanks to their reputation as wealthy yet benevolent businesspeople[i]. As such, it is important to understand and explore their philanthropic efforts and approaches.

Philanthrocapitalism – old wine, new bottles

Philanthrocapitalism has been largely offered as a way to overcome the perceived inefficiency and ineffectiveness of ‘traditional’ large-scale grant-making philanthropy[ii]. The claim is that by applying market forces and business strategies to, and measuring outcomes of, philanthropic ventures, more cost-effective, impactful interventions can be pursued[iii].

Proponents portray philanthrocapitalism as a new, innovative, approach to philanthropy. While the term philanthrocapitalism was only coined in 2006[iv], the underpinning ideas and logics have, however, been seen throughout philanthropic history. Most prominently, they reflect the Scientific Philanthropy movement of the early 20th Century which promised a more data-driven approach to large-scale grant-making[v]. Philanthrocapitalism therefore represents more of a repeating and rebranding of earlier philanthropic ideas than a novel approach.

Literature scope

Our review indicates that philanthrocapitalism spans a range of intellectual fields and disciplines: from Education and Business Studies to Law and Anthropology. Notwithstanding this spread of intellectual bases, research and discussions on philanthrocapitalism have remained focussed on a narrow range of topics and areas, namely: US education, international development, global healthcare, and African agriculture. The role of philanthrocapitalism elsewhere – such as in environment and conservation, disaster relief, or human rights – has remained underexamined. 

Framing effects

Across the topics addressed in the literature, philanthrocapitalists are largely seen as wealthy entrepreneurs or investors who view and approach philanthropy as they would a business venture or investment opportunity. Accordingly, philanthrocapitalists frame: 

  • development challenges as scientific problems in need of scientific solutions; 
  • beneficiaries as productive entrepreneurs, rather than helpless victims; and 
  • philanthropic interventions as investments, rather than donations.

These business-oriented frames and language may attract corporate actors capable of providing innovative, technological solutions[vi]. They can further empower some beneficiaries by providing support for their business ventures, reducing their dependency on grants and donations[vii]. However, these frames also individualise complex social issues, casting development problems as a matter of individual, rather than collective, responsibility. The political, economic, and cultural circumstances that may have caused or contributed to these problems in the first instance therefore tend to go unchallenged and unaddressed[viii]. More poignantly, it is doubtful to what extent market-based methods and interventions can actually address social and development challenges, given that these principles and processes are often criticised for causing or accentuating the same social issues philanthrocapitalism seeks to address in the first place[ix]

The very ability of philanthrocapitalists to frame social phenomena in their terms also raises concerns of accountability. Philanthrocapitalists are private actors but with considerable impact and ability to shape the agendas and activities of public and non-profit organisations alike[x]. Whether they are framing the problems, the solutions, or the beneficiaries involved, philanthrocapitalists’ frames continue to prioritise the interests of businesses over the needs of beneficiaries. Without including beneficiaries directly in framing processes, enabling them to define the challenges they face, philanthrocapitalists risk addressing assumed rather than actual needs. Thus, contrasting with the claim to be an effective, impactful approach to philanthropy, philanthrocapitalism may actually waste resources, avoiding more pressing or socially embedded challenges in favour of short-term, measurable outcomes. 

Lessons for the future

Our review indicates philanthrocapitalist interventions can attract more funding to social challenges, by appealing to the language and values of corporate actors. However, without actively including beneficiaries, many development challenges are likely to remain unaddressed. To effectively address social challenges, philanthropic organisations and individuals must consult and engage with beneficiaries in, for instance, defining the needs addressed, designing interventions, and agreeing whether and how to measure outcomes[xi]. Without this, it is unlikely that any approach to philanthropy is going to be successful.  

Full paper

Full paper is available open access, courtesy of the University of St Andrews: 

Haydon, S., Jung, T. & Russell, S. (2021) “You’ve Been Framed”: A critical review of academic discourse on philanthrocapitalism, International Journal of Management Reviewshttps://doi.org/10.1111/ijmr.12255

s haywood 600

Steph Haywood, PhD Candidate at The Centre for the Study of Philanthropy & Public Good, School of Management, University of St Andrews.

@hayphilanthropy

t jung 1

Prof Tobias Jung, Professor of Management, Head of School of Management, Director of The Centre for the Study of Philanthropy & Public Good, University of St Andrews.

@drtobiasjung

s russell

Dr Shona Russell, Senior Lecturer at School of Management, University of St Andrews.

@shonalrussell


[i] Baltodano, M. (2017) The power brokers of neoliberalism: Philanthrocapitalists and public education, Policy Futures in Education, 15(2), pp.141-156. https://journals.sagepub.com/doi/full/10.1177/1478210316652008

[ii] Bishop, M. & Green, M. (2008) Philanthrocapitalism: How the rich can save the world and why we should let them, Bloomsbury Press: London.

[iii] Rogers, R. (2011) Why Philanthro-Policymaking Matters, Society, 48, pp.376-381. https://link.springer.com/article/10.1007/s12115-011-9456-1

[iv] Bishop, M. (2006) The birth of philanthrocapitalism, In: The business of giving: A survey of wealth and philanthropy, February 25th 2006, The Economist: London. https://www.economist.com/special-report/2006/02/25/the-birth-of-philanthrocapitalism

[v] Carnegie (1889) Wealth, The North American Review, 148(391), pp.653-664. https://www.jstor.org/stable/25105641?seq=1#metadata_info_tab_contents

[vi] Bishop, M. (2013) Philanthrocapitalism: Solving Public Problems through Private Means, Social Research, 80(2), pp.473-490. https://www.jstor.org/stable/24385612?seq=1#metadata_info_tab_contents

[vii] Valencia-Fourcans, L. & Hawkins, R. (2016) Representations of Women in Microcredit Promotional Materials: The Case of Espoir Ecuador, Journal of International Development, 28(4), pp.507-527. https://onlinelibrary.wiley.com/doi/abs/10.1002/jid.3136

[viii] Schurman, R. (2018) Micro(soft) managing a ‘green revolution’ for Africa: The new donor culture and international agricultural development, World Development, 112, pp.180-192. https://experts.umn.edu/en/publications/microsoft-managing-a-green-revolution-for-africa-the-new-donor-cu

[ix] Baru, R. & Mohan, M. (2018) Globalisation and neoliberalism as structural drivers of health inequities, Health Research Policy and Systems, 16(S1), pp.91-98. https://health-policy-systems.biomedcentral.com/articles/10.1186/s12961-018-0365-2

[x] Baltodano, M. (2017) The power brokers of neoliberalism: Philanthrocapitalists and public education, Policy Futures in Education, 15(2), pp.141-156. https://journals.sagepub.com/doi/full/10.1177/1478210316652008

[xi] Mushita, A. & Thompson, C. (2019) Farmers’ Seed Systems in Southern Africa: Alternatives to Philanthrocapitalism, Agrarian South, 8, pp.391-413. https://journals.sagepub.com/doi/abs/10.1177/2277976019872327