More and more billionaires are pledging their money to philanthropy. But are charities the best place for our money to go?
Larry Page is one billionaire who might feel differently.
At last week's TED conference, the co-founder and CEO of Google followed up on an earlier statement that he might give his money to Elon Musk, founder of Tesla and SpaceX.
"He [Elon Musk] wants to go to Mars ... That's a worthy goal ... We have a lot of employees at Google who've become pretty wealthy," said Page. "You're working because you want to change the world, you want to make it better. Why isn't the company that you work for worthy not just of your time, but your money as well?"
Philanthropy has long been associated with non-profits, but the indelible mark private companies have made on the world should make us wonder where our donations really have the most impact.
Those sympathetic to Page's view point out that private companies have strong incentives to invest money where it yields the best results, while many charities are often less efficient at allocating resources. Money could get tied up in administration, perpetuating the charity at the expense of the solution. And many private companies are able to attract strong talent -- talent that would know how to put your money to good use.
In any event, Google has undoubtedly shaped our world, and that, I'm sure, is why Page is thinking about keeping some of his money in the private sector.
But the fact remains that there are terrific, smart, hard-working charities out there that rely on private donations. Some say Page's argument elides the excellent work being done by those organizations while overstating the philanthropic promise of private companies. As Kevin Roose points out in The New Yorker, "Elon Musk may want to improve humanity's lot with his space exploration, but ... the goal of making the world a better place will always be secondary to the business motive. It has to be..."
In other words, donating your money to a private company will serve shareholders first and the world second. And if you do keep your money in the private sector, funds could get locked up in corporate interests instead of reaching the people who need it most.
But those who celebrate "philanthrocapitalism" (itself a vague and shifting concept in the profit-friendly do-goodery of today's world) insist that many companies, including Google, are intent on changing the world. (Whether that is for better or worse is a separate discussion.) They've developed compelling business models beneath that philanthropic impulse, which survives on the revenue they generate. On that view, the ROI on charity might be higher in private companies. Commercial interests, then, are an incentive and a mechanism for investing money in the right goals. What makes a goal "right," of course, is where Page's critics have the most ammunition.
Wherever these billions of dollars go, companies and charities are starting to look more and more similar -- private companies adopting purpose-driven goals, charities running more like competitive enterprises, and both "doing well by doing good." The question is: Which deserves your philanthropy the most?
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