Wall Street Journal on Philanthrocapitalism

We were honoured to see that the former Mayor of Los Angeles Richard J. Riordan reviewed Philanthrocapitalism in the Wall Street Journal.  He rightly asks why more billionaires aren’t giving and muses that it’s not greed but that “…they don’t know how to get started”.  He suggests that they might “…take a look at this book’s enlightening analysis of how they might do the most good.” 

Let’s hope. As we have argued on this blog, now is the time when the rich need to expand their philanthropy rather than cut back. And even if it’s peer pressure, a desire to avoid criticism or some other less than noble motive that inspires them to give, as Riordan says: “We can always judge them by how “well” they give.”
Riordan is up front that he works with Bill Gates, Eli Broad and other philanthropists on the issue of school reform in the US and is chairman of a group of 10 charter schools in Los Angeles.  While he trumpets the achievements of charter schools, he is also realistic that the philanthrocapitalists’ investment in education has resulted in “…relatively little systemic change.”  Riordan does, however, see hope in the fusion of politics and philanthropy in New York but rues that “… there are few politicians like Mr. Bloomberg, whose personal wealth gives him a special kind of independence.”
Riordan sees Gates and Broad as ‘entrepreneur’ philanthropists, who are more effective than ‘passive givers’ like George Soros and Ted Turner: “In a kind of “Hail Mary” money toss, they have given billions of dollars to the United Nations and foreign governments …for the most part, they have seen their money fly away on the wings of bureaucrats.”  While we would put both Soros and Turner in the category of big bet, high stakes philanthrocapitalists, Riordan mischaracterises their giving: Soros has largely given to civil society organisations rather than governments – take for example his support for the ‘colour revolutions’ in Serbia, Georgia and Ukraine – and, while Turner admits that he has no metrics by which to judge the success of his grand pledge of a billion dollars, he points out that he was giving to UN causes, rather than UN itself.

Philanthrocapitalism has practitioners across the political spectrum. Some right wing givers are regarded with suspicion on the left, just as Soros is disliked by the right – yet some new left-leaning givers are taking inspiration from the past success of rightwing philanthropists (like John M. Olin) in funding much of the intellectual spine of the Thatcherite and Reaganite revolutions, as we discuss in the book. Now leftish philanthropists regard the right wing methods of shaping politics as a model worthy of imitation, as evidenced by Andrew Rich’s 2005 article in the Stanford Social Innovation Review.