Philanthrocapitalism and the Heart Strings

“Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment… And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befall himself would occasion a more real disturbance.”

Those words, written by the great British economist Adam Smith, seem strikingly wide of the mark at the moment, as millions of people around the world respond with generosity to the terrible misfortune that has befallen the people of Haiti. Twitter and Facebook are churning with tips on how to give and to whom to give.  Governments, businesses and individuals the world over are all opening their wallets to help.

Although sometimes caricatured as a champion of selfishness for extolling the power of the ‘invisible hand’ of the market, Smith’s quote comes from his lesser-known work, The Theory of Moral Sentiments, in which he argued that it is our sympathy for others that motivates our good deeds. In the world without telephones and televisions that existed when he was writing, catastrophes on the other side of the world were abstract stories; today, we can see the suffering of others and do something about it. For that reason, Smith would not have been surprised by the way the public has responded to this latest crisis, and would have celebrated this as progress for humankind.

Smith would also have noted with pleasure that a massive earthquake in China in 2008 led to a dramatic change in attitudes to giving there, where the government had previously been hostile to philanthropy. Yet he might also have worried that the economy’s invisible heart led to philanthropic funds being misallocated by the surge of sympathy after high profile disasters, which often attract more money and in-kind gifts than can be used effectively on the ground, at the expense of less compelling but more effective uses of the donations.

In general, we are all better at responding to human suffering caused by dramatic, telegenic emergencies than to the much greater loss of life from ongoing hunger, disease and conflict. Charity fundraisers know that they need to grab the public’s heart with powerful images, so they tend to exploit these emergencies to raise more money. This raises a difficult question: does how our natural human sympathy works in this modern, multi-media age skew our moral compass?

There is a real danger of images of suffering becoming a sort of “poverty porn”, argues Ethiopia-based aid blogger Owen Barder in a recent post. His immediate target was child sponsorship, a particularly popular form of fundraising to help kids in developing countries. “Why should children be forced to write letters describing their lives in return for money to eat or have an education?” he demanded. Asking poor children to write letters to sponsors is, in Owen’s view, one of many examples of poverty porn, which demeans the beneficiaries and distracts donors from what really matters.

While Owen’s indignation is understandable, we think it is misplaced in its other-worldliness.  Rejecting emotional appeals for sympathy would probably mean less giving, rather than better giving. The real question for philanthrocapitalists – even at heartbreaking moments like today, as the pictures from Haiti move us to give – is how to ensure that appeals to the heart do good and don’t do harm.

At least in Haiti there is no question that the shocking images are real. In Victorian Britain there was great controversy when the child welfare pioneer Thomas Barnardo was forced to admit that his highly successful marketing images of children ‘before’ and ‘after’ they had entered his care were faked. We tell Barnardo’s story in the new chapter of the paperback edition of the book (which comes out in Britain this week) in our discussion of the mass philanthrocapitalism of online giving sites. The online microfinance site has recently been under attack, in the same way as Barnardo was, for misleading its donors. This has largely been a storm in a teacup although it has helpfully forced Kiva to explain better what it does. Yet even with these changes, do Kiva and other online giving sites that connect donors to individual recipients cross the line into philanthroporn?

Kiva’s defence is probably the most straightforward. Even the most successful corporations in the rich world have to pitch for financing from banks, the bond market or the stock market. Kiva’s clients may be poor businesspeople in poor countries but they are businesspeople and pitching for money is part of business, so it is hard to see any abuse here.

Donorschoose is a more difficult case, since the beneficiaries of these online donations to classroom projects are American schoolchildren. In this case, however, feedback to the donor is required from the teacher who has bid for the money, not the pupils. True, donorschoose does have a facility for the children themselves to post messages to the donors and it is just about conceiveable that an unscrupulous teacher could force his pupils to produce degrading or obsequious messages. If that were the case, however, it is pretty likely that one of the kids or their parents would blow the whistle – that is the power of the internet.

Giving to development causes may be different because poor African children don’t have the same options to speak up for themselves as poor American children. Though this is starting to change. One of the leaders in mass philanthrocapitalism,, has started to experiment with handing out phones with cameras to the communities that benefit from their projects. We are not there yet, but the truly exciting potential of online giving is the possibility of harnessing the spread of mobile phones in the developing world to allow the beneficiaries of charity to finally make themselves heard and start a conversation with donors about what works.

Effective giving needs the head and the heart. As all our hearts go out to the people of Haiti, we offer three thoughts about how to give. First, give money. This may sound obvious, but aid agencies are swamped at this time with offers of food, clothing and other goods. Even when these goods are needed, it is far more cost effective for charities to buy and ship exactly what they need than sorting out gifts in kind. Second, give it to an organisation with a track record of effective action. Thanks to the internet, it has never been easier to find out who those organisations are. Third, why not match fund what you have given to Haiti with a gift through kiva or globalgiving to someone suffering just as much, but less dramatically, elsewhere in the world?