Can Philanthropy Ever Truly Be Democratized? Here Are Three Things Standing in the Way

Editor’s Note: This article was originally published on June 1, 2023.

Can we ever meaningfully democratize philanthropy ? Opinions vary — and have a lot to do with how you define both “democratize” and “philanthropy” — but the idea has gained some traction recently. That’s no mean feat in a sector long associated with the top-down prerogatives of the rich.

During the pandemic in particular, buzz grew around practices like participatory giving and mutual aid, and more funders than ever before seemed responsive to calls to open up their wallets and provide more unrestricted support. But that seems to be subsiding as the sector settles into a post-COVID status quo. Meanwhile, philanthropy’s critics are as vocal as ever. For some, the hope that the sector might be evolving in a more responsive, egalitarian direction was sadly misplaced.

One of the critics’ refrains has been that, far from being a key part of the tapestry of democracy (as others have controversially argued), philanthropy is simply incompatible with an inclusive democracy. Organized philanthropy, in other words, can never be meaningfully democratized.

I don’t necessarily subscribe to that, and we can look to Rob Reich’s 2018 book “Just Giving” as one compelling argument that philanthropy is not currently, but could become compatible with democracy. But we should also ask whether talk of democratization, or even encouraging individual acts, add up to anything like a meaningful trend in that direction. As philanthropy scholar Lucy Bernholz put it last year, “We have suckered ourselves into thinking we’re in this great moment of democratization when that is absolutely not what’s going on.”

As praiseworthy as individual participatory grant programs or voluntary acts of shifting power may be, the hard truth is that deep structural barriers stand in the way of broader philanthropic democratization, and they’re unlikely to go away anytime soon.

Here are three of the biggest factors standing in the way of a more democratic philanthrosphere.

1. Top-heavy giving

It seems obvious to say, but rampant wealth inequality and a concentration of resources at the top doesn’t lend itself to a very democratic social sector. A boatload of billionaires, whose fortunes have ballooned after decades of trickle-up economic policies, are currently remaking philanthropy in their preferred image. On the flip side, small donor giving has long trended down, obliging grantseekers to cater ever more obsequiously to the big fish in the pond.

Even if billionaires come with the best of intentions, seeking perhaps to yield unrestricted money and the spotlight to their recipients, no true structural democratization is taking place, really. There’s still the giver and the receiver, the owner of the assets and the grantseeker hoping to get a piece. And even when funders experiment with participatory programs, they’re doing so voluntarily. Since it’s their money, they still get the final sign-off on where it goes, not the people they temporarily call upon to help them make that decision.

That’s not to say participatory grantmaking programs should be abandoned. Rather, as long as private ownership of capital is the norm, any truly “democratic” social sector must rely primarily on voluntary contributions from regular folks, with occasional bigger gifts as mere icing on the cake. That’s the polar opposite of where we stand right now.

2. Impoverished civic infrastructure

In addition to wealth stratification, there’s another longstanding trend holding democratization back: the deadening of traditional forms of civic association. As political scientist Robert D. Putnam was already arguing over two decades ago, the ways Americans once publicly gathered and organized have suffered a slow bleed over time. With them have gone powerful local engines for small-scale giving, volunteerism and civic participation.

A major part of that has been a long-term decline in religious affiliation, impacting the ability of churches and other congregations to channel everyday charity. Other traditional civic hubs, like clubs and other voluntary organizations, haven’t fared much better.

That doesn’t mean we’re all living in splendid isolation. We have plenty of in-person opportunities to engage with people who share our interests via concerts, conventions, sporting events, you name it — as well as a still-growing array of online gathering spaces. The problem when it comes to philanthropy is the fact that most of those activities, and nearly all of the online ones, are operated by and through the private sector, meaning that any giving or organizing occurring there must also pass through that less-than-democratic lens.

These newer spaces aren’t devoid of charitable giving — take, for instance, online crowdfunding — but again, participants typically interact with the platforms involved as customers or users, not as members or citizens. As a result, they lack any formal democratic say over what goes on, and any informal sway they might have in smaller, personal gatherings tends to get lost when a gathering reaches any sort of scale.

3. Too many middlemen

Philanthropy staffers come with no shortage of good intentions, but as a whole, the sector’s workforce is not a strong force for democratization. Part of it has to do with what my colleague Mike Scutari has called a “guarded self-interest.” Practices like participatory grantmaking and unrestricted support have their proponents, but they also raise uncomfortable questions about what all these highly educated, pedigreed personnel actually bring to the table. How far can democracy and bureaucracy coexist in the philanthrosphere?

There are, of course, good arguments for why philanthropy staffers are a useful and necessary part of the social sector (I dug into some of them here). The fact remains, however, that they’re on the payroll, and lacking unions, have no formal power to sway those higher in the organizational food chain. This also applies, by the way, to the growing army of philanthropic consultants. For instance, I have no doubt that MacKenzie Scott values the input and expertise of her consultants. I also have no doubt that few, if any, would risk doing anything that might be construed as biting the hand that feeds them.

I’m sure philanthropy sector folks are being sincere when they talk about wanting to channel community voices and trust those on the ground. But the cold truth is that they’re still operating in an environment that incentivizes listening to their bosses, not to the average person on the street.

These aren’t set in stone

With all that in mind, it’s not clear philanthropy as we know it can meaningfully democratize at scale anytime soon. But that doesn’t mean attempts at participatory and trust-based giving shouldn’t happen — in fact, there’s a growing body of evidence that letting the “donor guardrails” come down makes grantees more effective, not less.

In addition, keep in mind that these structural constraints aren’t set in stone. You could imagine a future in which broad-based prosperity and a resurgence of voluntary civic association brings down some of these barriers. But getting there will require more economic equality and less privatization of civic spaces. Philanthropy can and should pitch in by upping its support for economic justice policy and for power-building to get those policies enacted. Funders can also back nonprofit civic engagement and infrastructure directly — and that doesn’t have to involve overtly “political” work.

Doing so won’t, by itself, democratize philanthropy. But it might set the stage for a resurgence in small donor activity and nonprofit-led civic association, and that could set the stage for meaningful democratization at scale.

Featured