The art of profitable giving - PhilanthroCapitalism

G Sampath in The Hindu




Not too long ago, public opinion was against philanthropy. A new book explains how attitudes have changed, and why we must scrutinise them.




Once upon a time there was charity. The haves gave some to the have-nots, and that was that. Sometimes the giving impulse was religious, sometimes guilt-induced. But charity was more about the soul of the giver than the welfare or rights or dignity of the receiver. This is why there can be no charity between equals. Or between friends. For all these reasons, charity had for long remained an activity rooted in the personal-private, quasi-religious sphere.

Then came philanthropy. Jeremy Beer, in his The Philanthropic Revolution: An Alternative History of American Charity, argues that the displacement of charity by philanthropy was “the result of a reconceptualisation of voluntary giving as primarily a tool for social change.” It also marks, according to Beer, a shift from a theological to a secular framework for giving, bringing with it all the baggage that secularisation entails – blind faith in the technological mastery of the social world, centralisation, and the bureaucratization of personal relations.”

And today we have ‘philanthrocapitalism’. The term gained currency after The Economist carried a report in 2006 on ‘The birth of philanthrocapitalism’. Noting that “the need for philanthropy to become more like the for-profit capital markets is a common theme among the new philanthropists,” the article explains why philanthropists “need to behave more like investors.”

Two years later came the book that today’s biggest philanthropists swear by: Philanthrocapitalism: How the Rich can Save the World by Matthew Bishop (a senior business editor from The Economist) and Michael Green. The title is not intended to be ironic. It is an earnest argument: in a world of rich men and poor states, who better to save the poor than the rich themselves?

The advent of philanthrocapitalism may have finally brought to the fore what is tacitly understood but rarely made explicit -- the symbiotic relationship between capitalist excess and philanthropic redress.



When philanthropy was shunned



It is no accident that the first great philanthropists were also the greatest capitalists of their age. Nor is it a coincidence that many of these men, remembered today by their philanthropic legacies – John D Rockefeller, Andrew Carnegie, Andrew Mellon, Leland Stanford, James Buchanan Duke – also figure in Wikipedia’s list of “businessmen who were labelled robber barons”.

If one is to make sense of the recent surge in the quantum of philanthropic funds sloshing around looking for worthy causes – the Bain & Co. Indian Philanthropy Report 2015 notes that foreign philanthropic funding in India more than doubled from 2004 to 2009, jumping from $0.8 billion in FY‘04 to $1.9 billion in FY’09 – then one needs to go beyond the numbers and look at the economic underpinnings of corporate philanthropic initiatives. This is precisely what sociologist Linsey McGoey sets out to do in No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy, which released last month.

No Such Thing… kicks off with a quick reminder of the shady origins of philanthropy. How many of us know, for instance, that not too long ago public opinion (and government opinion) was against philanthropy in general, and corporate philanthropy in particular?

In the early 20th century, philanthropic foundations were “viewed as mere outposts of profit-seeking empires, only cosmetically different from the corporations that had spawned them, a convenient way for business magnates to extend their reach over domestic and foreign populaces.” McGoey quotes US Attorney General George Wickersham, who had observed that they were “a scheme for perpetuating vast wealth” and “entirely inconsistent with the public interest.”

Yet what was common sense in 1910 would sound blasphemous in 2015. While no self-respecting economist today can deny the obscene economic inequality that characterises our age, not many would willingly acknowledge the connection between concentration of wealth and philanthropy. That is to say, an equitable society would suffer neither a club of the super-rich that seeks self-expression through philanthropy, nor a class of the super-poor that is dependant on philanthropic charity for survival. McGoey makes this point simply with a quote from the economic historian RH Tawney: “What thoughtful rich people call the problem of poverty, thoughtful poor people call with equal justice the problem of riches.”

If philanthropy is thriving in this age of extreme inequality, it is because it serves a dual purpose: one, to make inequality more acceptable ideologically and morally; and two, to define poverty as a problem of scarcity rather than of inequality. Hence the ultimate argument in favour of philanthropy, deployed when all else fails, is the one based on scarcity: ‘something (from a foundation) is better than nothing (from the government)’.

Philanthropy is the palliative that makes the pain of capitalism bearable for those fated to endure it. Philanthrocapitalism, on the other hand, is about transcending this palliative function to represent capitalism itself as a philanthropic enterprise.

In Bishop and Green’s formulation, such a philanthropic capitalism – also known as ‘venture philanthropy’, ‘social entrepreneurship’, ‘impact investing’ – would drive innovation in a way that “tends to benefit everyone, sooner or later, through new products, higher quality and lower prices.”

As McGoey reveals in her book (and Bishop and Green attest in theirs), no one does philanthrocapitalism better, or bigger, than Bill Gates, who helms the world’s largest philanthropic foundation, the Bill and Melinda Gates Foundation (henceforth Gates Foundation), with an endowment of $42.3 billion. For this very reason, the Gates Foundation is an ideal case study for understanding the social impact of philanthropic foundations.



Problems with philanthrocapitalism



McGoey enumerates three obvious problems with philanthrocapitalism, illustrating each with reference to the Gates Foundation.

First is the lack of accountability and transparency. McGoey points out that the Gates Foundation is the single largest donor to the World Health Organisation (WHO), donating more than even the US government. While the WHO is accountable to the member governments, the Gates Foundation is accountable only to its three trustees – Bill, Melinda, and Warren Buffet. It is not unreasonable to wonder if the WHO’s independence would not be compromised when 10% of its funding comes from a single private entity “with the power to stipulate exactly where and how the UN institution spends its money.”

Secondly, “philanthropy, by channelling private funds towards public services, erodes support for governmental spending on health and education.” With governments everywhere slashing their budgets for public goods such as education and healthcare, the resultant funding gap is sought to be filled by philanthropic money channelled through NGOs. But with one crucial difference: while the citizen has a rights-based claim on government-funded social security, she can do nothing if a philanthropic donor decides to stop funding a given welfare project – as has happened time and again in many parts of the world.

At the same time, even as it facilitates government withdrawal from provision of social goods, philanthropy paves the way for entry of private players into the same space. McGoey details how the Gates Foundation orchestrated this brilliantly in the American education sector, where it helped create a whole new market for private investment: secondary and primary schools run on a for-profit basis.

Third, the same businessmen who made their money through unhealthy practices that worsened economic inequalities are now, in their philanthropic avatar, purporting to remedy the very inequalities they helped create. In the case of the Gates Foundation, Microsoft’s illegal business practices are well documented in the US Department of Justice anti-trust case against the company. As McGoey puts it, the fortune now being administered through the Gates Foundation “was accumulated in some measure through ill-gotten means.”

Of course, none of this should detract from the undeniably good work that philanthropic bodies have done. The Gates Foundation has saved countless lives, especially in Africa, through its funding of immunisation programmes and outreach projects. Its several achievements, therefore, have been deservedly celebrated. Nonetheless, critical scrutiny lags far behind the lavish accolades.

Even the three issues discussed above barely scratch the surface. McGoey goes on to raise several more.

She asks, for instance, asks how the Gates Foundation’s interventions in global health tally with Bill Gates’ violent opposition to any dilution of the patent regime. The Gates Foundation was the largest private donor to the Global Fund to Fight AIDS, Tuberculosis and Malaria. At the same time, it “has continually lobbied against price reductions of HIV drugs and other medicines”, infuriating activists who “want a more equitable global patent regime” and “do not want charity handouts.”

She examines the Gates Foundation’s partnerships with Coca-Cola, not exactly popular among those who value public health. In the context of the Foundation’s work to help combat global hunger, she reveals how its financial ties with Monsanto and investments in Goldman Sachs “may be compounding food insecurity rather than mitigating it”.

She interrogates its skewed research portfolio. Of the 659 grants made by the Gates Foundation in the field of global health, 560 went to organisations in high-income countries, even though the problems being targeted were in low-income countries. How does excluding local scientists and programme managers who are best placed to understand the problems help the cause, asks McGoey.

While it is generally taken for granted that a philanthropic foundation would make grants only to non-profits, McGoey draws attention to the Gates Foundation’s non-repayable grant of $4.8 million to Vodacom, a subsidiary of Vodafone. In 2014, the Gates Foundation also announced a grant of $11 million to Mastercard for a “financial inclusion” project in Nairobi. Interesting how philanthropy has evolved to such an extent that in a world wracked by hunger, disease, war, and malnutrition, two entities found to be most in need include a multinational credit card network and a multinational mobile service provider.
Finally, not to be forgotten are the tax breaks that philanthropic foundations enjoy. Critics have pointed out that nearly half of the billions of dollars in funds that philanthropic foundations hold actually belong to the public, as it is money foregone by the state through tax exemptions. History has shown that progressive taxation is the most efficacious route to redistribution. But a strong case for philanthropy is another way of making a strong case for lower taxation of the rich – after all, it’ll leave them with more money to spend on uplifting the poor. Small wonder then that philanthropy’s biggest enthusiasts are political conservatives.

The Economist report on philanthrocapitalism cited above also quotes a young Indian philanthropist, Uday Khemka, who predicts that “philanthropy will increasingly come to resemble the capitalist economy.” That was in 2006. Nine years later, the publication of McGoey’s No Such Thing As a Free Gift marks the first systematic attempt to document this phenomenon.







sampath.g@thehindu.co.in

Reclassifying ketamine is more fiddling while the crack pipe burns

Why can't we have an honest conversation about drugs?

 

• 
• • Suzanne Moore
  • The Guardian, Wednesday 11 December 2013 20.00 GMT

Why can't we talk about our history of intoxication? Photograph: guardian.co.uk

Tis the season to be off your head, legally and in a ladylike manner. At the moment there is a lot of focus on the harm that us people (ie, women) do to ourselves with our: "Yay, it's wine o'clock." Or, as the Sun explains: "So many mums open the wine once the kids are in bed. The cork rarely goes back in the bottle."

One might ask why women's lives are so stressful that self-medication is needed, and why alcohol is such an astonishingly cheap way to get wasted. Legally.

I stress legal because the news that government advisers want ketamine reclassified from a class C to B drug is more fiddling while the crack pipe burns. The drug wasn't banned until 2006, but someone who gets caught with it will now face up to five years in prison instead of two. A heavy price, one feels, for the person who wants to anaesthetise themselves of an evening. Send them to prison where drugs are the currency? It's almost as if government advisers don't live in the real world.

Sure, the long-term effects of ketamine (bladder damage) are not nice and I have never doubted that it is dangerous. When I was 16, two boys I knew broke into a veterinary surgery and injected it. The dose was for horses, not humans. They both died stupid, stupid deaths.

Reclassifying it might mean a few students may now think twice. But those who will be thinking really hard are the manufacturers who will design a legal substance that guarantees the effects of ketamine and can be sold online. For this is how prohibition works hand in hand with capitalism and organised crime. Recently, we have all experienced contact highs – cooking up meth (Breaking Bad), cheering on Nigella (coke), Paul Flowers (a vile cocktail of everything and ill- considered banking). We watch Russell Brand's abstinence monologues that do indeed break the barriers of space and time.

There is no joined-up drugs policy. It is rare that I say a good word about George Osborne but, as I have said in the past, I don't care if he took cocaine. Because I don't. And to be fair to Nick Clegg – maybe I really am out of my mind – he admits that in the war on drugs, drugs won, acknowledging that many senior police officers want decriminalisation. Addiction, Clegg declared recently, is a health issue, not a criminal justice one.

Facts remain a dangerous substance in this debate, as Professor David Nutt knows. In 2009, he said that illegal drugs should be classified according to the harm, both social and individual, they cause. Alcohol would certainly have a high classification. Booze and tobacco, he said, were more harmful than LSD, cannabis and ecstasy. So he had to be got rid of, as few politicians ever seem to be able to expand their minds enough to consider actual evidenced-based policy-making.

Decriminalising certain drugs would inevitably mean misuse. But the unsayable thing is that many of us use drugs, legal and illegal, at certain stages in our lives. And enjoy them.

Instead, however, we hand over the trade to organised crime, which is why Mexico is in the state it is now, upping its poppy production massively. We have spent 10 years trying to bomb or bribe away the only cash crop the Afghans can grow (the opium poppy). What do we want them to sell? Cabbages? This year is a record one for the crop, produced mainly in Helmand, so that has really worked.

You may be the sort of person who does not want to drink or take drugs. You may not wish to expand your mind, or lose it. You may not want to connect the handing-out of mood-altering SSRIs (selective serotonin reuptake inhibitors) with kids smoking skunk and mums' little wine clubs. You may think it's no longer cool to neck any pills other than statins. You may want to move to Uruguay, which has just legalised marijuana, though I can't think of anything worse than being in Montevideo with a load of gap yahs. It's not my drug of choice, as I like things that make you want to talk.

I would like the real drug conversation, not the gurning, coked-up, aren't-we-amazing one. Not the one where Tulisa is a threat to civilisation. Why can't we talk about our history of intoxication, personal and political? Those who make the laws that would make me a criminal are not coherent in their logic. They are cowards, afraid of a media that is neither clean nor sober. Drugs, legal and illegal, are a fact of life. Even life-enhancing. There will be casualties of drugs but there are casualties of not facing reality. Both need to be managed. Honestly, I really cannot snort another line of this hypocrisy.

From coffee shops to airlines, the trend to 'personalise' products only serves to underline how impersonal services have become

OK, this mug's got my name on it – but that doesn't mean Starbucks cares

• 
• • John Harris
  • The Guardian, Monday 27 May 2013

‘Somewhere between Margaret Thatcher and the fall of Lehman Brothers, there were signs of half-decent customer service.' Illustration by Andrzej Krauze

'A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking," said Andy Warhol. "All the Cokes are the same and all the Cokes are good."

Such was the capitalism that was embodied not just by Coca-Cola, but the Ford Motor Company – and named, towards the end of its dominance, "Fordism". Now, though, we are said to like our transactions personalised and touchy feely. Ergo a summer-long promotion titled "Share a Coke", whereby the usual logo has been replaced by 150 first names – from Aaron to Zoe, via Faisal, Josh, Lauren and Saima. That all this rather cuts across the imperious yet egalitarian brand that Warhol so loved does not seem to have occurred to anyone; nor, apparently, has the whole idea's air of awful tweeness (while writing this, I bought my obligatory "John" bottle from Marks & Spencer, and remained unmoved).

At Starbucks, meanwhile, they now insist that your hot caffeine also comes emblazoned with your name – written on a sticker, to be hollered by a barista. This scheme arrived in early 2012, in a similar flurry of faux-enlightened PR: "Have you noticed how everything seems a little impersonal nowadays?" ran the promotional text.

Unlike the Coke wheeze, though, it was also a see-through attempt at damage limitation: six months later, the company's byzantine tax arrangements would be under intense scrutiny. But in the ordinary world, Starbucks was already becoming a byword for sloppiness and mess, not to mention coffee that tastes like the hot milk my nan used to make me circa 1973. As a former 'Bucks addict, my own epiphany came in their branch in Birmingham's Bullring Centre, where the tables were piled high with dirty cups and plates, only two staff seemed to be on duty – and if the place had been an independent business, you would have taken one look and assumed it was rightly headed for the knacker's yard.

Yet Starbucks is still here, making handsome worldwide profits. Yes, after a major reputational wobble, it has nobly offered to throw £20m over two years at Her Majesty's Revenue & Customs. Hosanna! They now shout your name when they hand you your cup of warm milk and a plywood panini. But going to any of its outlets remains a dependably joyless experience, suggestive of something remarkable: the company is not so much too big to fail, as too big to really care. Once enough competitors are out of the way, it seems, modern branding can work magic: providing you avoid killing anyone, that enough people will carry on trudging through your doors, whatever happens

My own recent experience of sclerotic, unresponsive, mind-bogglingly awful treatment runs from Virgin Media (hours waiting on "helplines", which reached an acme of annoyance when I was offered a choice of what music would be played down the phone – by genre), through the train giant First Great Western (frequently late, insane ticket prices) and on to such behemoths as McDonald's (vast queues) and PC World (don't get me started). When it comes to the ubiquitous Amazon, there are once again lines to be drawn from its tax arrangements, through standards of service – I have long given up on its "next day" delivery option – to its predatory behaviour, last seen when it hiked up its fees to independent "marketplace" sellers by up to 70%.

Running through a lot of this, I would imagine, is much the same business model: workforces hacked down to the bare minimum and poorly paid, the apparent belief that if you track your customer's buys via data accumulation and give them what you think they want, more quaint ideas of customer service can be dumped, fast.

To all this, there is an obvious enough response: hasn't a mixture of flimsy "personalisation" and arrogant business–as-usual always been the capitalist way? Perhaps. But somewhere between the arrival of Margaret Thatcher and the fall of Lehman Brothers, there were at least fleeting signs of an embrace of half-decent customer service – as proved by plenty of businesses, not least the big British supermarkets.

Bear with me, please. Though I cannot quite date them, I have clear memories of visiting Tesco, Asda and Sainsbury's, and realising that though they were strangling independent competitors, squeezing producers and offering an illusion of choice under which lay a remarkably Fordist way of operating, their customer service was actually very good. You may recall the dedicated bag-packers, or the staff's breezy openness to being sent to scour the aisles when you reached the checkout and realised you'd forgotten the broccoli .

More often than not, my own supermarket shopping now ends with an exasperated glimpse of gridlocked checkouts, and the usual trudge through the self-service terminals sometimes known as "the fast lane": a con trick that would have caused Marx and Engels to hoot with mirth, whereby the customer now doubles as the worker. I contacted Sainsbury's, Asda and Tesco to ask how many were now in operation, and what the increasing dominance of fast lanes meant. Their replies were uniformly evasive, and the one from Tesco was particularly grim: "We believe in giving our customers choice. Over a third of shoppers choose to use self-service tills, not least because they find them quicker and more convenient. For customers who need assistance, there is always a member of staff on hand." Somewhere in those words is the same arrogance you can taste in your average grande skinny cappuccino and granola bar.

There is, then, a new model of business, which rather puts me in mind of words uttered not by Andy Warhol but the market traders of the West Midlands. "Never make a mug of your punter," they used to say. But that is what modern business does. And strangest of all, contrary to all that stuff about consumer sovereignty, it seems to be not just getting away with it, but prospering.

Coke may need to carry a cancer warning

Drinks firm forced to change recipe in California after ingredient classed as health hazard

Rob Hastingsin The Independent

Saturday, 10 March 2012

Nightmares about the backlash they suffered the last time they dared to change the secret recipe for their drink still most likely haunt Coca-Cola executives.

But 27 years after the ill-fated launch of New Coke, the threat of having a cancer warning placed on their famous red bottles is forcing them to revise the closely guarded ingredients again.

With its arch rival Pepsi, Coca-Cola is altering its drink in the US after the state of California declared one of its flavourings a carcinogen – though it will continue to sell the old form of the drink in Britain and the rest of Europe, with no cautionary labelling.

The two drinks have been made to include less of the chemical 4-methylimidazole, a caramel flavouring known as 4-MEI, which the National Institute of Environmental Health Sciences in the US has linked it to cancer in mice and leukaemia in rats. It can be formed during the process of cooking certain ingredients and consequently may be found in minor amounts in many foods. Under Californian law, drinks containing a certain level of carcinogens must have a cancer-warning label on their packaging.

But the two companies – which, combined, make up 90 per cent of the soft-drink market in the US – insist the ingredient is not a health risk.

Coca-Cola said yesterday the cancer warning is: "scientifically unfounded", while also maintaining that the company has been able to make the changes through a "manufacturing process modification" rather than a full change of formula.

"The caramel colour in all of our products has been, is and always will be safe," a spokesperson said.
"The changes will not affect the colour or taste of Coca-Cola. Over the years, we have updated our manufacturing processes from time to time, but never altered our secret formula. Caramel is a perfectly safe ingredient and this has been recognised by all European food-safety authorities.

"The European Food Safety Authority (EFSA) reaffirmed the safety of caramel colouring as recently as March 2011 and stated that the presence of 4-MEI in caramel colouring is not a health concern. In fact, 4-MEI is found in many foods including baked goods, coffee, bread, molasses, soy sauce, gravies and some beers."

The American Beverage Association, the drinks industry's trade body in the US, also said that there is no evidence that the ingredient poses a risk to humans. And the US Food and Drug Administration said someone would have to drink 1,000 cans of Pepsi or Coke per day to ingest the same dosage of the chemical given to the laboratory mice.

The secret recipe: 'Merchandise 7X'

Is a great deal of self-propagated myth surrounding the Coca-Cola recipe and its "Merchandise 7X" combination of flavourings, which is apparently privy to just two executives who are not allowed to fly in the same plane in case the secret goes down with them. Last year an American radio presenter tracked down a 1979 article in an Atlanta newspaper which revealed nutmeg, neroli and even coriander were ingredients.

The original recipe from 1886 has been changed several times. Cocaine was replaced by caffeine in 1904. But the most controversial change was in 1985, when the company introduced New Coke with a sweeter taste. The product bombed, lasting just three months before the original was reinstated.

Liam O'Brien

You are a Brand

Are you a Coke or a Pepsi?
Presenting yourself as a 'brand' may help you secure a job interview.

Remember the Pepsi Challenge? Take a group of punters, two cans of cola, cover up the labels, and get them to taste. Pepsi always wins; more people like the taste of Pepsi than Coke.

But walk into a supermarket and something weird happens. Coke outsells Pepsi. For quite a lot of us, the rational bit of our brain, which tells us Pepsi is nicer, gets overridden. An irrational, emotional bit, the bit that likes the sexy shape of the old Coke bottle, or that would like to teach the world to sing, takes control, and we buy Coke.

That’s the power of a brand, and people have them just like companies. And recruiting someone is like walking down that supermarket aisle. Loads of people apply, with roughly the same experience, skills and qualifications. Rationally, there’s not much to choose between them – candidates are a hundred cans of cola on a shelf. So how do employers pick who to interview?

They pick irrationally. Emotionally. On the basis of what they pick up about your personal brand. And most of that will come from the way you write your CV and cover letter. Not just getting your apostrophes in the right place (though that’s a good start), but your 'tone of voice’.

So for any decent job, an identikit CV means death. Start with 'I am a hard-working team player ...’ and, even if it’s true, you’ll sink back into the vat of candidate cola that’s slopping around. And avoid buzzwords. If you trained a load of people, say that; don’t say you 'upskilled a functional unit of direct reports’.

If I’m the employer, wading through them, I want someone who makes me take notice. Who sounds funny. Or brave. Or good company. Or caring. Someone who takes the risk of standing out from the crowd. If your hobby is the conservation of rare toads, drop that in. If you think the way your industry works is completely unsustainable, say so. Anything that will intrigue your reader into conversation will pay dividends. Because the aim of most job applications isn’t to get you a job, it’s to get an interview. Once you’re in the room you can show what a hard-working team player you are. By then you’ve got me hooked.

That’s why, for many big brands and smaller companies, how you reply to a job advert is the first filter.

They might have spent thousands on a recruitment campaign.

So if you don’t pick up on the tone of that ad, and send a generic CV, like most people do, it says you probably won’t pick up on the culture if you end up working there. It says you’re the wrong person.

You must put a bit more of yourself into your writing. Decide if you want to sound like a Coke, or a supermarket’s own brand.

If it’s the right place, and the right job for you, it will work.

And then you won’t kick yourself for being like Pepsi – competent, but unloved.

Neil Taylor is creative director of brand language consultancy The Writer (thewriter.com) and author of Brilliant Business Writing.