Large Foundations: Potential for Great Good and Great Harm

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January 20, 2016; RT and The Independent

Studies recently released by Britain-based Global Justice Now (GJN), “Gated Development,” and by the Global Policy Forum (GPF), “Philanthropic Power and Development: Who shapes the agenda?”, examine the growing influence of the philanthropic efforts of the mega-rich on the world stage and raise the question of whether these efforts need to be reined in. Both reports ask if these foundations are too able to substitute their private agendas in place of those set by public bodies working within a democratic frameworks. Both raise concerns about the lack of oversight of the work of these foundations and the limited level of public accountability that they are asked to meet.

The GPF report estimates foundation-only total spending on international development ranged from about three billion dollars in the early 2000s to between seven and ten billion in 2009.

In 2012, the 1,000 largest U.S. foundations gave $5.9 billion, or about 27 percent of their grants, to international activities. The major part of their total international giving was dedicated to health ($2.2 billion) and international development/humanitarian relief ($1.2 billion). By far the largest donor has been…the Bill & Melinda Gates Foundation with $2.6 billion.

This growth, during a time of economic turmoil across the globe, has been timely. With many international organizations experiencing decreased funding, growing interest and support from the nonprofit sector has allowed many critical efforts to continue, and even expand. But there are risks that come along with the involvement of large foundations:

Philanthropic foundations have been playing a growing role in global development policy. In times of stagnating social development assistance and underfunded multilateral organizations, the increase in philanthropic giving for development seems to be urgently needed. In addition, their advocacy for global causes puts pressure on governments and sometimes the private sector, to become more actively engaged, for instance in the fight against HIV/AIDS or the support of global vaccine campaigns. However, the rapidly growing role of philanthropists and their foundations might bring a number of risks and side effects.

“Gated Development” specifically examines the impact of the growing role played by the Gates Foundation.  Acting out its commitment to global health improvement, it has become a major funder of the World Health Organization, contributing 11 percent of WHO’s 2015 budget. GJN finds that this level of support has allowed the foundation to direct the WHO’s priorities by restricting its grants to projects that it wants to fund, rather than set by the decisions of the World Health Assembly.

The influence of the BMGF in setting the health policy agenda is critical since NGOs and universities that are not recipients of its money or not aligned to its vision can become marginalized and health issues the foundation deems unimportant can be sidelined. As health expert David McCoy, of University College London, has argued, “This is relevant, because the way the health problems of the poor are defined and prioritized is crucial in framing an effective response.”

The Gates’ Foundation’s bias toward technology-based solutions, “Gated Development” believes, has moved the World Health agenda away from interventions that may be more effective. As an example, it looks at Bill Gates’s strong support for vaccinations as a key intervention strategy. This focus means that other research in areas like pneumonia, diarrhea, and maternal and child undernutrition (which account for 75 percent of child deaths) go relatively underfunded. “For these diseases, the key is not the new vaccines heavily promoted by the foundation, but effective preventive measures which are already well-known.” In the opinion of the editors of the British medical journal The Lancet, “Many scientists who have long worked in low-income settings [are concerned] that important health programmes are being distorted by large grants from the Gates Foundation.”

Global Justice Now’s study also raises the question of whether a focus on technology as an answer to major world problems ignores more important systematic ills.

The preference for technological solutions over those that address systemic social, economic or political issues favours corporations (since they tend to deliver the technology) and can let governments and donors off the hook, by allowing them to downplay corruption, human rights abuses and social inequality as causes of human suffering. A technological approach tends to regard development as a depoliticised process, as though there are few choices over which policies to implement—there are simply technological solutions. Yet there is a big debate between neo-liberal and alternative paradigms, and development policy needs to move away from corporate-led globalization towards development policies that strengthen social and economic justice.

Another strategy spotlighted by these reports is the building of public-private partnerships that may blur the line between for-profit and philanthropic purposes.

While in its first years of operation, the Gates Foundation cooperated only indirectly with corporations, for instance by providing grants to public-private partnerships, in 2009, it started to invest directly in companies that could help to advance its goals, primarily in the areas of health and agriculture as well as banking for the poor. Its so-called Programme Related Investments (PRIs) (to date, 1.5 billion) are used as “high impact tools to stimulate private-sector driven innovation, encourage market-driven efficiencies and attract external capital to priority initiatives.”

The Gates Foundation has challenged GJN’s assessment; the Foundation issued a statement in response to the report, which says the report “misrepresents the foundation, our work and our partnerships.”

The foundation’s mission is to improve quality of life for the world’s poorest people. This is a complex challenge, and solving it will require a range of approaches as well as the collaboration of governments, NGOs, academic institutions, for-profit companies and philanthropic organizations. Governments are uniquely positioned to provide the leadership and resources necessary to address structural inequalities and ensure that the right solutions reach those most in need. The private sector has access to innovations—for example, in science, medicine and technology—that can save lives. And we believe that the role of philanthropy is to take risks where others can’t or won’t.

Beyond debating merits and downsides of specific strategies, the growing influence of a small number of very large foundations should cause us to consider if their work is sufficiently transparent and accountable.—Martin Levine