The Charitable-Industrial Complex

In his last speech as president of the United States, General Dwight Eisenhower, warned in 1961 that “we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex”.

Reformulating this famous alarm, last July 26 Peter Buffett wrote an opinion piece in The New York Times, where, under the title of “The Charitable-Industrial Complex" he explains how "inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left”.

"Ike" Eisenhower was a Second World War hero and the only general to live at the White House in the twentieth century. He knew what he was talking about. Peter Buffett is an Emmy-award winning composer that ended up sitting in those meetings, as he explains in his column, "because of who my father is”.

Peter is the son of Warren Buffet, one of the three richest men in the world, along with Carlos Slim and Bill Gates. In 2006 Buffet father decided to "give back to society" much of his fortune. He generously endowed the three foundations that he had created for each of his children to have their own philanthropic tool and deposited several billion dollars in the coffers of the Gates Foundation.

“Early on in our philanthropic journey”, writes Peter, “my wife and I became aware of something I started to call Philanthropic Colonialism: (…) People (including me) who had very little knowledge of a particular place would think that they could solve a local problem. Whether it involved farming methods, education practices, job training or business development, over and over I would hear people discuss transplanting what worked in one setting directly into another with little regard for culture, geography or societal norms.”

Peter Buffet son notices that "inequality is continually rising” and, “at the same time” the number of nonprofits is growing faster than both the business and government sectors. “It’s a massive business, with approximately $316 billion given away in 2012 in the United States alone and more than 9.4 million employed.”

In Europe and North America, there are 176 000 foundations, according to the figures provided by Michael Edwards, a former executive of the Ford Foundation. The biggest one is the Gates Foundation. In the health sector alone, Gates donates $ 800 million a year, a sum equivalent to the total budget of the World Health Organization, an United Nations agency with 193 member countries.

In a paper written for the Rockefeller Foundation, Edwards wrote "Unfortunately foundations are not strong on accountability and their increasing size and reach are beginning to raise some questions about the undue influence of private wealth over public policy concerns.”

Belinda Gates (wife of Bill Gates and one of the four board members of the Gates Foundation, together in addition to her husband, her father-in-law and Warren Buffett) was the only speaker representing "civil society" during the 2010 UN summit on the Millennium Development Goals. The Gates Foundation sponsors the section on "Global Development" on the website of the Guardian of London, which has become the main forum for public discussion on the new UN agenda. Amina Mohammed, the chief planner at the United Nations Secretariat on this new programme that should replace the MDGs from 2015 on, reached this position, funded by private foundations, after having been an advisor on the same subject for the Gates Foundation.

The traditional balance between society, the market and the state, symbolized by the equal representation of employers, workers and governments in the International Labour Organization, seems now broken. In preparing the report to be raised by UN secretary general Ban Ki-moon to the General Assembly in the coming weeks, Amina Mohammed has on her desk four officially legitimized inputs: a report by a High Level Panel of eminent persons, commissioned by Ban, a joint report of the 60 UN agencies dealing with development, an academic sector analysis, written by economist Jeffrey Sachs, and a report of the Global Compact, the UN branch that promotes voluntary codes of business conduct, which reflects the opinion of business people from around the world. The opinion of workers or of people living in poverty is not acknowledged at the same level.

Peter Buffet observes that “as more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to 'give back'.” But this 'conscience laundering'  " just keeps the existing structure of inequality in place”. The philanthropist-composer acknowledges that "my wife and I know that we don't have the answers," but they believe that "money should be spent trying out concepts that shatter current structures and systems that have turned much of the world into one vast market”, since, as Albert Einstein said, you can not solve a problem with the same mindset that created it.

A comment by Roberto Bissio.