Philanthropy is Great: But Should We Have to Rely on It?

There was a time when philanthropy was an essential element in our society, in the days when the government and the landed gentry (generally) cared not a jot for the poor and underprivileged, and were not interested in making any provision for their welfare.

But there have always been men willing to do ‘good works’. This originally goes back to the selfishness of rich nobility, especially Kings, who wanted to make sure that their time in purgatory was minimised by setting up religious houses and educational establishments that would spend some time praying for their souls after death. The worse the earthly behaviour of the King, the more such good works. King Henry VI, for example, founded a charity school to provide free education to 70 poor boys who would then go on to King's College, Cambridge, founded by the same King in 1441.

The problem is that over the years, the original charitable objectives of this institution have got rather lost; and nowadays Eton College – for that is its name – is almost entirely devoted to rich boys, whose parents can afford the annual £30,000 fees.

There are any such instances of historical charitable giving, which - over time – end up losing its charitable objectives. There are many middle-class families living in what were originally alms-houses, for example.

The nobility, or some of it, continued this tradition throughout the ages, we can think of examples like Lord Wilberforce and Lord Shaftesbury in the 19th Century. These men were driven by largely Christian sentiment which exercised their desire to make poorer people’s lives easier.

The industrial revolution was a great period for extending philanthropy outside of the nobility, often because the self-made millionaire who got lucky realised that he could level the playing field for others of his background, or just to make his workers lives, or others, more comfortable: men such as Cadbury, Peabody and Guinness come to mind.

In the speedily expanding economy of the United States, we have even more examples of such men in Carnegie, Rockefeller, Cornell and Ford. Many of the Ivy League colleges in the US were founded as charitable institutions to train Ministers; they are now some of the richest - and expensive - education establishments in the world.

As I have stated, there was a time when the poor, weak, sick and defenceless had be assisted by philanthropists because governments did not think it was their business. Well, we now know better – or do we?

The standard mechanism for distributing a nations resources from abundance to under-supply is taxation. Local and national governments use various forms of taxation to raise money to spend on what are considered to be necessary amenities and services, such as roads, education, self-defence, health care etc – as well as in subsidising those unable to provide for themselves economically, such as unemployment benefit, social services and funded housing.

This works tolerably well in the enlightened western democracies of Europe, Scandinavia, Australasia and Canada – and markedly less so in places like Africa, South America, China and the United States.

However, wherever you are, to a lesser or greater extent, we are still reliant as a society on new generation philanthropists and institutions that have managed to amass a phenomenal share of the global wealth: the names Bill Gates, Paul Allen, Warren Buffet, Elon Musk, Richard Branson, James Dyson, Elton John spring to mind.

So, what the hell are you complaining about then? I hear you cry.

Well, what I am complaining about is this – the largesse of these new generation philanthropists is being deployed according to their whim – not as the result of the combined thought processes and prioritisation of the democratic representatives of our society.

This is wrong. Individual philanthropists are no less weird and odd as the rest of us as individuals – often more so - and they tend to get fixated on one thing at the expense of another, sometimes literally. For example, let us take Bill Gates, a sensible and very philanthropic guy who – for years – had a monomania about malaria. His foundation has spent years and billions in a heroic effort to stamp out malaria in Africa – a continent that currently cannot support sustain or even feed properly its existing population. I am not suggesting that curtailing or stamping out malaria is not a good thing, but surely common sense dictates that there should have been a measured parallel policy of birth control so that when the death rate goes down, population growth does not result in even worse problems. Maybe free condoms with every mosquito net would have been a good idea.

We need better thought out policies than the reliance on the idiosyncratic impulses and notions of eccentric rich people. Now more than ever, as the scale of the inequality of wealth that modern Internet-based commercial activity has produced is now greater than at any time in history.

Let’s just take the UK to start with – currently, half of England is owned by less than 1% of the population. More than a fifth of the UK population live on incomes below the poverty line after housing costs are taken into account, even though most of these households are in work. Nearly one in three children live in poverty and the use of food banks is rising.

There is a six-fold difference between the income of the top 20% of households and those of the bottom 20%. Wealth inequality is much worse, with 44% of the UK’s wealth owned by just 10% of the population, five times the total wealth held by the poorest half.

And we are doing pretty well, overall. The global wealth inequality index is the GINI coefficient, which measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution.

The UK is currently at 116th out of 159 countries – in other words, there are 115 countries with a greater inequality of wealth, and ‘only’ 43 with a greater equality of wealth.

Meanwhile, more and more of the world’s wealth is tied up in a very small, and dwindling, group of people and institutions. We learn, just from reading The Times today, that:

· Christ Church college Oxford has cash reserves of £587m

· Bill Gates is worth £75b

· Billy Joel earned $35m in 2017

· Jeff Bezos, the world’s richest man, is worth $160b (despite a $38b divorce), and has pledged $10b to fight climate change

· Amazon (worth $1 trillion in 2018) pays virtually no federal tax in the US, and paid British tax of £220m in 2018 against UK revenues of £10.9b.

We also know that, for years, Apple, Alphabet/Google, Facebook and many other hi-tech/Internet businesses also manage to avoid paying their fair share of corporate taxes. We further know that very rich individuals can ‘arrange their affairs’ in order to pay astonishingly low rates of income and wealth taxes.

Now, it appears that the development of the vaccines that may be required to save the human race from destruction, or decimation, are to be accelerated by funding from philanthropists, such as Bill Gates.

Through the Bill and Melinda Gates Foundation, he plans to help fund factories for seven promising vaccines, even before seeing conclusive data. That's despite the fact that two of the programs—at most—will make it through to final development and deployment.

Why? As Bill says, “The world can't wait for traditional vaccine deployment timelines, so the foundation aims to help scale up manufacturing during testing, instead of after. Our early money can accelerate things”. So the foundation is picking the seven “most promising” vaccine constructs and will help fund factories for all seven, he added, “even though we’ll end up picking at most two” to actually deploy.

“To get to the best case” of vaccine deployment in about 18 months, he says, “we need to do safety and efficacy and build manufacturing" simultaneously. He acknowledged the plan will result in the loss of “a few billion dollars” on projects that don’t pan out. Still, considering the situation the world is in, “a few billion ... is worth it.” He said the effort can save critical months to making a vaccine available, and thus restart economies sooner.

This is wonderful of him – but we should never have got ourselves into the position where we need to rely on the spontaneous ‘goodness’ of individuals for the potential conservation of the species.

Such husbanding and investment of these massive amounts of money is rightly the province and burden that government should, and must, shoulder.

Bill Gates and Warren Buffet can only be praised for instituting the Giving Pledge, by which they (and an increasing number of other member philanthropists) have vowed to give way half their fortune in their lifetime. To date, at least $500 billion of giving has been pledged by 204 individuals or couples, with a combined 2017 net worth of $1 trillion.

This is also excellent news, but it is not nearly good enough – as the disposition of that fortune is still subject to the caprice of the individual benefactors and not democratically determined.

We need to institute reasonable and fair levels of corporate and personal income and wealth taxation, and we need to collect it. Then our governments, imperfect though they are, should invest and spend all this wealth wisely in order to benefit those who need it, and prepare much, much better for the next inevitable plague.