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Philanthropy does more harm than good



Why now?

Oscar Wilde lived in an age of very visible social injustice, and in an age of very visible philanthropy. Yet his judgement was brutal: “charity degrades and demoralises...in the present state of things in England, the people who do most harm are the people who try to do most good.”

Bill Gates revolutionised our lives with PCs, which made him rich. He now wants to revolutionise the lives of billionaires by getting them to pledge to give away the majority of their wealth to philanthropy. He, his bridge partner Warren Buffett, and 40 of America’s wealthiest other families have already taken The Giving Pledge.

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The US currently gives $300 billion to charitable causes every year; about 1.7% of its GDP. That is more than twice as generous as the next most charitable countries, the UK and Canada, who give about half a pence for every pound earned. However, American generosity has to be seen in the context of lower taxes, a much less cossetting welfare state and less generous overseas development aid.

In the UK, David Cameron’s “Big Society” program hopes that American-style philanthropy can pick up many aspects of welfare provision that he hopes to take out of State hands. The funds may or may not materialise. But even if the rich in the UK do step up to their proposed responsibilities, there is a long-running argument that philanthropy cannot solve the underlying problems of poverty.

Europe has tended to substitute private giving for social-democratic tax and welfare models, and to view philanthropy as a symptom of 19th century social inequity. The new philanthropists, Bill Gates at their head, think that business thinking, technology and entrepreneurialism can solve problems that have been too tough for welfare states to crack.

If, led by the hard taskmaster of austerity, we are now invited in Europe to become more American in our giving, should we reject Oscar Wilde’s judgement?

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