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Mr Philanthrocapitalism Goes to Washington

Wednesday was a big day for philanthrocapitalism in Washington DC. Bill Gates delivered an impassioned speech, highlighting the growing success of his foundation in driving change in America’s schools and improving global public health. He urged politicians to do all they can to build on this success, including by working even more effectively in partnership with philanthropists, and by increasing government spending. In particular, President Obama should honour his commitment to double America’s foreign aid by the end of his first term – a pledge he has lately seemed wobbly about. Ever the optimist, Gates told his audience at George Washington University that “In a crisis, there is always a risk that you take your eyes off the future and you sacrifice long-term investments for short-term gains. You have to seek both.”

Meanwhile, several foundations have grouped together to launch a new Washington-based lobbying group, The Philanthropic Collaborative. Members fear that economic pressures at the federal level might prompt new tax or other policies that could directly or inadvertently limit the ability of private and community foundations to provide much-needed resources to America’s charities. Echoing Gates, Mayor David Cicilline, President of the National Conference of Democratic Mayors and a founding member of TPC, said that “In difficult times, we have to resist the temptation of short-term thinking. It will cost us much more tomorrow if we undercut our investments in the foundations that support our communities today.”

To prove the point, TPC published a new study of the economic impact of philanthropy, by Robert Shapiro, a Clinton administration veteran. He concluded that, “for every $1 a foundation gives to a charity, there is – on average – more than an $8 return to the economy. That’s a tremendous rate of return.”

No doubt there is room to quibble over the exact numbers – and we will take a closer look at the study – but they seem broadly plausible. And whilst we sympathise with the view that the last thing DC needs is another lobbying organisation, and it is certainly possible to have bad philanthropic lobbying, we think this is an important message. Here’s hoping President-elect Obama is listening.