The Peter Buffett Critique Of The Charitable-Industrial Complex

Jim Lynch's picture


In a July 26th opinion piece in the New York Times, Peter Buffett, son of fabled billionaire, Warren Buffet, and chairman of the NoVo Foundation wrote about three absurdities that he has noticed in the world of philanthropy.

1. Philanthropic colonialism. That’s where a well-meaning rich person endeavors to solve a persistent and complex problem like childhood malnutrition somewhere in the world with very little knowledge or experience with the situation.

2. Conscience laundering. That’s where a well-meaning rich person “gives back to feel better about accumulating more wealth than any one person could possibly need to live on by sprinkling a little around as an act of charity.” Peter Buffett goes on to explain that conscience laundering allows “the rich sleep better at night, while others get just enough to keep the pot from boiling over. Nearly every time someone feels better by doing good, on the other side of the world (or street), someone else is further locked into a system that will not allow the true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life.”

3. Applying business logic to philanthropy like calculating the “R.O.I. (return on investment) of alleviating human suffering,” as the measure of success. He finds that this type of philanthropy ushered in by the Grameen Bank style microlending serves to integrate the very poor into our system of debt and repayment with interest.

He says that nonprofit activity is a massive enterprise with approximately $316 billion given away in 2012 in the United States alone and more than 9.4 million employed in catering to the bad habits of conscience laundering and philanthropic colonialism.

After this critique he calls for a profound rethinking of philanthropy. “Money should be spent trying out concepts that shatter current structures and systems that have turned much of the world into one vast market. Is progress really Wi-Fi on every street corner? No. It’s when no 13-year-old girl on the planet gets sold for sex. But as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine.”


As you can imagine, this has stimulated some amount of discussion, like nonprofit fundraiser, Tom Watson in Forbes Magazine, and Nonprofit Quarterly’s Ruth McCambridge’s rebuttal. She notes that this is not a new observation, citing Joan Roelofs in book, entitled “The Third Sector as a Protective Layer for Capitalism.”

Then there’s self-described ‘venture anachronist’, Zack Exley’s response in Huffington post. I couldn’t exactly tell what he’s saying, but there’s some cool observations in his piece.

My take? I have to say that I love it when someone like Peter Buffett engages in frank and painful self-examination. I’ve spent a lifetime working in the nonprofit trenches with and for people interested in addressing the most pressing problems of humanity: poverty, famine, drought, homelessness, the population explosion, disaster relief, lack of healthcare, genocide, refugees, environmental destruction, global warming, illiteracy, human trafficking, economic development, and a host of other problems. The issues we address are complex and huge. Zack Exley mentioned that addressing just global warming is massive, $100 trillion dollars to replace the world's carbon economy. Our efforts may be flawed and insufficient, but I’m proud to be among the heroic people willing to take these things on. If philanthropic colonialism and conscience laundering are the cost of improving the world, so be it. If someone reinvents the very flawed funding mechanism of humanitarian work, then I gratefully welcome your contribution as well. We’ll find a way to do the work one way or another.

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