Ruben G. Apressyan
The Efficacy of Philanthropy: ethical and pragmatic Criteria
Research project sponsored by the Research Support Scheme, Open Society Institute (Soros Foundation – Budapest), 1996–1997.
The research was oriented to selection and investigation the criteria of successful and just philanthropic activity and the ways it serves public good. Following the discussions on philanthropy in the 1950s-90s, generalizing and specifying the main statements and arguments, basic criteria of rational, legitimate and efficient philanthropy were suggested. These criteria are considered as the prescriptive implementation of the main features of philanthropy reflected in its definition as an activity called to voluntary redistribution of private resources by their owners for the sake of indigenous people, promotion common good, and improvement the conditions of social life.
At the course of the research three types of criticism in the history of ideas - nihilistic (Lafarg, Nitsche), utilitarian (Hegel, J.S.Mill) and ethical (Dostoyevsky, Tolstoy) - were identified, explored, and rationalized. The increase of the social scale of philanthropy (since 19th century) have actualized the pragmatic criteria of philanthropy. Any foundation should obviously: meet general ad trivial requirements imposed to any non-government and non-profit organization. More detailed and specific requirements are formulated in respect of the main purposes and proper content of philanthropy.
1.B.a. Objections proposed and how far they were achieved according to the submitted project description.
The objections of the project were to select and investigate the criteria of successful and just philanthropic activity and the ways it serves public good. Specifically, the project was initiated to investigate: (a) correlation between virtues of love-caritas and philanthropy-charity in moral thinking; (b) the rationality of moralizing, utilitarian, and ethical criticism of philanthropy; (c) the decision-making procedures in different spheres of philanthropy and the criteria of evaluation the results philanthropic programs and actions.
Following the works by F.E. Andrews, R.H. Bremner, D.F. Burlingame, H. Mac-Donald, J.S. Mill, J.W. Nason, W.A. Nielsen, F. Ostrower, S.C. Wheatley, R. Wythnow, e.o., generalizing and specifying their statements and arguments I put forward seven basic criteria of legitimate and successful philanthropy. These criteria are considered as prescriptive implementation of the main features of philanthropy reflected in its definition. Philanthropy is understood as an activity called to voluntary redistribution of private resources by their owners for the sake of impecunious (in the broad sense of the word) people, promotion common good, and improvement the conditions of social life. - The concept of private resources includes financial and material means as well as human skills and energy.
The Western tradition of philanthropy has two sources: (a) Christian ethics of charity and (b) known since Ancient times practice of patronage exercised by wealthy towards indigenous people. So, philanthropy-charity as social virtue was actually rooted in the moral virtue of caritas, or active merciful love. In real social actions and practices charity is often appeared in variously displayed phenomena of ostensible beneficence as distortion of ethically sublime caritas. Still, it is a peculiar pattern of direct application of high moral principles in social relations. In the history of ideas philanthropy as a moral concept and ethical practice was often criticized from different philosophical and practical positions.
At the course of the research three types of criticism in the history of ideas - nihilistic, utilitarian and ethical - were identified, explored, and rationalized.
The decision making procedures in their particular forms have not been investigated for two reasons. First, I understood, that they were completely practical issues and their general foundations are the same as the criteria of philanthropy. Second, the officers of private foundation I visited were not open, when asked the question of the decision making procedures. Even at the philanthropic organizations, based mainly on state funds (like IREX) officers were not predisposed to discuss such questions.
1.B.b. Description of the main research findings for the entire period of the project.
1) Philanthropy has not been conceptualized in the current Russian thought as an actual social and ethical virtue. It is considered mainly as the means of political and economic influence or fun for the new people of wealth. So far most of the charity foundations in Russia (mainly affiliations of Western ones) are concerned of the same issues which the state took care of in the Soviet past, they are considered by many people as suspicious if not selfish, cheating, or profitseeking. It is so, for in many cases there is no idea of the foundations' intentions, priorities, programs in public opinion.
2) Though the positive role of philanthropy in helping indigent people is evident, one can easily find out that in all the times it has been a matter of skepticism and criticism. The analysis of different approaches to philanthropy allows to discriminate three main attitudes towards philanthropy. First, a nihilistic attitude, mainly developed by radical thinkers and ideologists, like P.A.D. Holbach or K. Marx and his followers. They considered philanthropy as means of power and exploitation as a way of fulfilling one's private interests. The Essay on Philanthropy, by French Socialist-Marxist Paul Lafarg is the most representative of this kind. The methodological error made by radical critics consists in confusion of goals, means and agents of philanthropy. Speaking and making conclusions about philanthropy in general, radical critics in fact analyzed the incentives of certain philanthropists and the means they used. They were right: many times in history philanthropy has been used as another way of consolidation personal or corporate power and social paternalism; there have been various facts of profit making under the mask of almsgiving. However, such facts and observations cannot undermine the social value of philanthropy as such; though they point to the social responsibility of philanthropists and the necessity for society to keep philanthropy over control.
Second, another kind of arguments against philanthropy were determined by understanding, that organized charity had failed to solve the real problems of poverty. Thus, Leo Tolstoy in his treatise, What Should We do Then, like many other socially oriented writers and essayists, argued that the money coming through charity actually could do nothing to improve the living conditions of the poor, that the mutual aid between indigent people was much more sufficient comparatively with charity foundations. The real help, to Tolstoy, could come on the basis of personal understanding the problems of indigent people and co-participation in their solution of those problems. Again, in the case of such criticism we face against methodological error: insufficiency of particular charity programs was interpreted as insufficiency of philanthropy as a whole. Charity, especially private one, should not be considered as the unique method of increasing social wealth; philanthropists should be morally responsible citizens. However, philanthropy, if it is not the matter of intellectual speculation and moralization, is to be understood in its proper, i.e. limited, social function, namely social aid through voluntarily redistribution of goods. The problem is how to make this redistribution just and efficient.
3) Third, utilitarian criticism of charity seems to be the most adequate to the specific goals and tasks of charity. This kind of criticism was provided by B. Mandeville, Hegel, J.S. Mill and others. As such different thinkers argued, philanthropy should not be wasteful and vain. Besides the cases of emergency, the main consideration in charity, as A. Carnegie put in his famous The Gospel of Wealth, "should be to help those who will help themselves" . Utilitarian reunderstanding of charity was determined by two factors: a) thinkers like Hegel or J.S. Mill were concerned of adopting the idea and practice of charity to the social and economic principles of growing civil society how it appeared in the 19th century lesser fair capitalism, b) practitioners of the late 19th - early 20th centuries, like A. Carnegie and H. Ford, were concerned of effective solution of the problem of rich and poor and by opposing the growing influence of Communism as well. At that time of great philanthropic projects and establishing charity foundations philanthropy was reinterpreted in terms of constructive planning, social engineering, and regulation. Philanthropy was associated with social technique which, like democracy, should improve the quality of social life in general. Owing to utilitarian criticism philanthropy was required to become pragmatically responsible.
4) Since the end of 19th century philanthropy owing to the efforts of the founders of three greatest foundations has been transformed into an important form of social activity which often has remote impacts, including political ones. Today sharp conservative criticism of liberal foundation politics (for instance by H. MacDonald) signifies implicit social and political controversies in philanthropic activity. The standards of philanthropy (like the one formulated by a famous writer in the field of philanthropic foundations, F.E. Andrews) should also include the articles limiting the political influence of philanthropy. A task of social theory is to understand philanthropy as an institution of civil society and a mechanism of relaxation social tensions.
5) The understanding of pragmatic aspects of philanthropy rises an important theoretical issue of the ethical context of philanthropy. First, from moral point of view, philanthropy is a kind of "application" of merciful love and one of the manifestations of active love and, hence, good will and virtuous intention. However, the above arguments against charity, although sometimes unjust and misunderstanding, displayed the limits of charity based exclusively on good will and not converted into wise, provident, and technically secured practice.
6) It is clear, that the increase of the social scale of philanthropy makes the pragmatic criteria of philanthropy more important. The contribution of above authors allows to render the criteria of rationality, legitimacy, and correctness in organized philanthropic activity. Thus, any foundation should obviously: a) meet the requirements of the law, b) not commit itself to the targets irrelevant to the philanthropic purposes, c) keep clear of too close relations and opaque connections with particular business agents, d) minimize administrative costs, e) be accountable to the government institutions and transparent to public. Such are the most general and trivial requirements to the foundations' activity. They are like the requirements imposed to any non-government and non-profit organization. More detailed requirements are specified regarding the main purposes and proper content of philanthropy. It is important for a foundation as a social institution to function sufficiently. (W. Nielsen speaks about "the maximum feasible function" ). However, the criteria of efficacy refers to a foundation as a philanthropic rather than just a social institution. Hence, it is more correct to speak about the efficacy of philanthropic programs, taking into consideration their practical contribution to the public good.
It is important to determine the subject matter in principal. The allocation of resources as such is beneficent and philanthropic support (through grants, awards or sponsorship activities) may be appreciated as good itself. However, a program in its execution should be adequate to the philanthropic purposes too. The granted project should commensurate with the criteria of philanthropy (see the above definition of philanthropy) or to its intrinsic criterion, specifically in case, when a project itself is not philanthropic, but educational, cultural, research, or communal one. The efficacy of a particular project can be evaluated according to its fulfillment and the price of the fulfillment. At a project level the question is whether the project results are adequate to the stated goals and tasks of the project and the conditions of granting. At a program level the question is whether the project results commensurate with a program or foundation priorities. However, speaking about the efficacy of philanthropy as a type of social activity, one should turn the question to the following: whether the project accomplishment promotes the public good. In other words, philanthropic activity should meet a criteria of another sort, irreducible to particular professional or objective issues.
7) To finger a provisional standard of foundation perfect function it is expedient to distin-guish two aspects - "external" and "internal". The former regards the sort of foundation administration and function; the latter regards the sort of its manifestation in a society.
Thus, (a) a foundation should focus its efforts on the goals, which by their scale and character are congruent to its resources and potential.
(b) Determining the priorities and directions of activity each foundation should take into account the agendas of other private foundations and philanthropic agencies to avoid duplication of programs, from one hand, and curtailment of supporting the solution of actual social problems, from the other. These problems are the most hard and difficult to solve and, thus, they are the least attractive, if to assume that foundations may sometimes be aspired to easy success and broad publicity.
(c) Active and responsible general administration of a foundation should be presided by a board of trustees functioning without reimbursement. The foundation governance should keep efficacious administrative and financial control over working groups and programs based on regular, detailed, and classified evaluation of proposed expenditures - both material and human - on accepted programs. A foundation should ensure complete annual reports of its activities, prepared by independent public assignees or trust companies (audit firms) and presenting in due order and in details all received and allocated (distributed) funds.
(d) Foundation staff and experts competence should be comparable to the level of the best institutions in the field. They should be motivated to initiate new actual programs, rather than just to evaluate and select appropriate projects. Professionals, specialists from particular fields of social practice, representatives of different communities, organizations and institutions surely better know the situation in the field. However, the foundation staff and independent experts associated with foundations should have broader scope and differentiate more general needs and tendencies beyond particular problems.
(e) A foundation should be open, enable to communication and collaboration with other private institutions (either other foundations, or non-profit organizations), whichby the type meet its priorities and programs.
(f) A foundation should be well informed about governmental policies and programs in its fields of interest. It should consult appropriate government institutions and public organizations operating at national, regional and local levels and coordinate its programs according to them. It is important for a foundation to consider the government efforts and budget in the fields of its interest.
(g) A foundation should keep to ethical (correct) methods of appealing (stipulating) do-nors and fund raising. The fund-raisers are better not be paid for their efforts. The whole ex-penditures for philanthropic performances (or dinners, shows) should not be higher than 30-40% of the expected gate.
(h) In current Russia philanthropy, either in the aspect of charity campaigns undertaken by private initiatives, or in the aspect of foundations' priorities and grant policies has not become a matter of public opinion and, specifically, mass media. Meanwhile, the concern towards philanthropy from the side of governmental and legislative bodies, its support by constitution and law, favored taxation would not only increase the social status of philanthropy, but also allow to invite significant private capitals (usually "washed" in shadow sector of economy or legally and illegally exported abroad) for solution actual and sharp social problems (for instance, re-education and professional re-orientation of adults, youth occupation, prophylactics of drug- and alcohol-addiction), as well as the problems of undergraduate and graduate education, preservation and development of sciences and culture, support of innovative ideas and original initiatives. The turn of the Russian state to philanthropy would signify one more step on its thorny way of extermination authoritarianism and etatism, towards developed and actively functioning civil society.
The system of work has been composed of three methods:
(1) reading and analysis of literature related to the subject (philanthropy, the arguments pro and contra, motivation towards it, practices, social impact, etc.);
(2) interview with people, engaged in philanthropic activities, mainly from philanthropic foundations;
(3) reflection of my own past and present experience as an expert of Russian Foundation for Fundamental Researches, Russian Foundation for Humanities Research, Open Society Institute (Moscow).
Usually I use periodicals in my applied studies . However, regarding the subject of this project, I failed to collect any appropriate data from Russian mass media, because most of pub-lications in this field have been either historical, or purely narrative.
1.B.d. Importance of findings with particular reference to novelty:
In the field. Though there is indeed broad bibliography in the history of Russian philanthropy, there have been almost no publications in the new (post-Soviet) Russian literature regarding the general philosophical, social, normative issues of philanthropy. Two articles, published already, and another one, pending publication (see p. 3).
One of the main research result was a discovery of an approach towards philanthropy as social engineering, very important one in the context of usual understanding philanthropy as an extended in scale almsgiving. This determined the title of my last paper: "Philanthropy: Almsgiving or Social Engineering?", pending publication in Spring 1998. The significance of this approach becomes evident in the study of foundation philanthropy. The efficacy of the latter should be evaluated by the criteria different than criteria of charity as almsgiving. Meantime, so far the efficacy of philanthropy deals with particular projects and actions, from one side, and with philanthropic enterprises as a whole, from another, one should differentiate the criteria of efficacy: technical (engineering) criteria for projects and actions and ethical criteria for philanthopy as such. The latter indicates the deep connection between philanthropy in modern sense of the word and charity as initial Christian virtue and makes possible the congruency between the views of Carnegie and Ford or Andrews and Nielsen as "constructionists" and Dostoyevsky and Tolstoy as moralists.
In an article "Dilemmas of Philanthropy" (Obschestvennye Nauki i Sovremennost, 1997, No. 6) I made an attempt to indicate the field of reflective continuum which includes the above writers as meeting in a common discourse.
"For society". The topic of philanthropy has been presented for the public (narrow community of readers, yet) as a controversial problem and actual social issue. Philanthropy is discussed as a field of public interest and a matter of necessary public control. Polemically to the arguments proposed during the spontaneous Parliament hearings in this country regarding Soros Foundation in January-March 1994 I tried to justify the plausibility of considering foundation philanthropy as agenda based social activity - oriented to the public good.
Philanthropy has also been presented to academics as a matter of serious scholar discussions.
Owing to the research I could establish contacts with a few research centers in the West (see p. 2.a.); with some of them I exchange materials and papers.
1.B.e. Difficulties and what have been learned from them.
As to collecting data from the leading American charity foundations (Ford, Rockefeller, Carnegie), it's appeared that most of their officers were not very much concern about the issues central for my research and had a little to tell me as a conclusion from their foundations' experiences. Or may be the questions I put were not correctly oriented and stipulative for the seeking answers.
As mentioned above, I was going to collect empirical data from periodicals and interviews. However, Russian mass media is not really resourceful in respect to philanthropy. Today empirical data could probably be collected only through sociological polls. (Because of my background and lack of experience I was not ready to fulfill this part of the project).
1.B.f. Intended use of the findings and how they will be publicized.
The main findings of the research have been and are going to be publicized in academic publications. Partly they are reflected in a chapter of a text-book, Ethics (to be published by May 1998 in 20,000 copies).
1.B.g. Aspects for further development.
In the close future I'm going to revise the papers on philanthropy and civil society for my book under a title "Philanthropy in Civil Society".
Carnegie A. The Gospel of Wealth. Indiana University Center of Philanthropy, 1990, p. 9.
Nielsen W.A. The Golden Donors: A New Anatomy of the Great Foundations. NY: Truman Tallers Books: E.P.Dutton, 1985. ?. 427-430.
Comp. with my recent articles: "Democracy and Citizenship". In. Voprosy Filosofii, Moscow, 1996, No. 7, pp. 3-16; "Business Ethics in Russia". In. J. of Business Ethics, 1997, October, Vol. 16, No. 14, pp.1561-1570.
Two articles, "Civil Society" and "Civil Society: Responsibility and Participation", published in my collection Civil Participation: Responsibility, Community, Power (Moscow: Aslan, 1997).