Would More Philanthropic Giving Actually Make the World a Better Place?

This is a deceptively complicated question. And it’s a lot more controversial than you might think.

It’s complicated because because it opens up broad issues of what interventions work to solve problems and the challenge of scaling those interventions—even when you do have the resources. And it’s controversial because it raises sticky moral issues regarding how foundations and donor-advised funds warehouse hundreds of billions of dollars even as millions die of preventable diseases, sea levels rise, and on and on. 

Is the current endowment model of husbanding resources for a rainy day downright criminal given that it’s pouring down right now? Or is it wise stewardship, since opening the spigots probably wouldn’t make much of a difference?

These same questions, by the way, apply to wealth holders writ large. The Forbes 400 is sitting on $2.3 trillion in assets—in a world filled with suffering and facing threats that could hobble civilization as we know it. Even most top billionaire philanthropists are only tapping a sliver of their wealth to solve urgent problems they publicly decry. Meanwhile, plenty of less wealthy people have enough spare cash to give more—and might, if they were 100 percent sure it would make a difference.

Roughly speaking, the debate over the efficacy of more giving tends to split between optimists and pessimists. 

The optimists argue that, of coursemore spending would make a difference. They point to various interventions that are scalable and bring proven returns, like vaccinations, more malaria bed nets and the like. GiveWell, a group that researches and spotlights charities that they believe are having an impact, is a leading voice in the optimist camp. You tell those folks how much extra money you have handy, they’ll tell you how many lives you can save in poor countries or how many children you can prevent from growing up stunted by nutritional deficiencies.

Many effective altruists, most famously Peter Singer, dismiss skepticism that more spending can make a difference, characterizing it as mere excuses for inaction. It’s comforting for people in wealthy countries to tell ourselves that more giving wouldn’t really save human lives right now or stop sea levels from rising, because otherwise how could we justify the way we live? For foundations, meanwhile, such skepticism is essential to their permanent institutional survival. If they really did agree that much higher grantmaking would actually solve the problems they’re addressing, they’d have to put themselves out of business.  

Those foundations that have spent down, or plan to, tend to reflect donors who combine optimism with a strong sense of moral urgency. The Gill Foundation, which works to advance LGBT rights and plans eventually to close, is a good example. Tim Gill told me: “If you’re talking about social change, your objective should be to improve the lives of people as dramatically and as soon as possible.” Gill also believes that a higher tempo of giving can and will make a difference. “As long as you have a smart strategy, it makes sense to spend money more quickly.”

Related: No OneLeftBehind: Tim Gill and the New Quest for Full LGBT Equality

Lately, the Bridgespan Group, a consulting firm, has joined the optimists’ camp with a research effort that offers up detailed arguments for how stepped-up giving could make a big difference in certain areas. In effect, Bridgespan is offering up the kinds of smart strategies that Gill says you need—and which donors supposedly hunger for—to justify greater spending.

This research follows the release of a study last year by Bridgespan reporting that many major donors were frustrated by their inability to identify shovel-ready opportunities for big philanthropic investments.

Related: Is Making "Big Bets" for Social Change Really So Hard?

Offering some hard answers to these concerns, Bridgespan released a report in May outlining a bunch of big “bets” that could boost social mobility and life chances for low-income Americans with $1 billion investments. Now, it is releasing more detailed follow-up papers that look at specific areas of investment.

Earlier this month, as we reported, Bridgespan offered a compelling case for how greater investments in early childhood development could increase the life chances of numerous low-income children and yield big returns for society overall.

Related: Hey, Billionaires: Here's a Shovel-Ready Plan for Changing Kids' Lives

Next month, Bridgespan will release another paper, “Billion Dollar Bets: Reducing Unintended Pregnancies,” which puts forth seven investments totaling $1 billion that could greatly reduce the number of unintended pregnancies in the U.S. — with a $6.4 billion return to society.

“Change is absolutely within our grasp,” says Bridgespan Partner Debby Bielak, who co-authored the forthcoming study. “Great gains have been made in the past two decades to reduce the rate of teenage pregnancy, and philanthropy is uniquely positioned to work around the politics of the issue to accelerate this progress.”

Bielak’s comment nicely sums up the mindset of the “spend more now” optimists. If we know how to solve a problem, let’s open the checkbook and get going already. 

As for the skeptics of greater philanthropic spending, they make a strong case of their own. They say sure, more spending could make a difference on some challenges – say, like reducing malaria deaths or curbing tobacco deaths. But there are plenty of other challenges where more money won’t easily yield big results because we still haven’t identified scalable solutions, much less the people and institutions who can scale them. 

You’ll hear this line of argument around climate change. Close readers of Inside Philanthropy know that we’ve repeatedly called for foundations and individual philanthropists alike to drastically raise their giving on climate change—even if means spending down endowments—given the unique and time-urgent nature of this challenge. The clock is ticking on a threat that could literally put some foundations underwater within a century or two. If ever there were a case for front-loading giving, this is it.

Related:

Or so it would seem. But the pessimists push back by arguing that it’s not so clear how billions more in giving would move the needle on climate change. Many top environmental groups have already greatly expanded and are going at full-throttle, only to bump into political roadblocks that greater giving can’t easily remove.

I think the pessimists are wrong, here, and we’ve outlined a range of ways that more philanthropic capital could be deployed to make a difference on climate change. Still, they make some good points, and they’re not just being callous or self-serving.

Maybe the best case for skepticism around more giving can be found by looking at the mixed results of Bill and Melinda Gates, who address big problems with their philanthropy.

Publicly, Bill Gates not a pessimist, but he acts like one. Most of his wealth is locked up in private investments, and only a fraction of it has yet been deployed to philanthropy. Why is that, when he and Melinda constantly talk about the urgent need for more giving?

Related: Bill and Melinda Gates Have a Big Vision. So Why Aren't They Writing BiggerChecks?

The top explanation is likely that the Gateses are still not sure how or if extra money can really make a difference on the specific problems they're attacking. And you can see why. Their foundation has been repeatedly frustrated on K-12 education—maybe because of its misguided strategies, as critics suggest, or maybe because this is just a super-hard set of problems, where philanthropy has limited traction. Remember, we’re talking about a highly decentralized $600 billion system, with student outcomes greatly shaped by larger social and economic conditions in society. Good luck with that one.  

The foundation has done better on global health and development, but any number of stubborn obstacles to progress exist in these areas, too. Gates has poured tens of millions into vaccination research projects that have come up empty-handed. And elsewhere, it’s come up with interventions that do work, but are hard to deliver to people living in remote areas of the world or who embrace cultural beliefs at odds with such interventions.

In short, you can kind of see why Bill and Melinda Gates are keeping so much money on the sidelines. They don’t want to waste it on stuff that doesn’t work.

So what’s the ultimate answer in the grand debate over whether more philanthropic giving can make the world a better place?

I hate to say these words, but: It depends.

It depends on what challenges you’re talking about. Some areas are clearly ripe for greater investment right now, while others aren’t. But I will say this: With an explosion of knowledge regarding how to solve problems, and many examples of things that work, the case for husbanding piles of philanthropic money for a rainy day is becoming increasingly weaker. The perpetuity model is becoming harder to defend, and all the more so given the vast new wealth slated to enter philanthropy in coming decades.

Increasingly, we know how to spend philanthropic dollars well—and we also know that there’s a lot more money where that came from. So funders: Pick up the pace!