In the first of a series that seeks to inform the charitable and non-profit sector’s collective imagination, contributor Gloria Novovic traces the evolution of Western philanthropic models – and charts a new path toward a “just transition.”
Caught in a perfect storm of a climate emergency, a global pandemic, and widening inequality, Canadians are realizing that many social contracts on which our societies rely have been broken. The pandemic has highlighted the importance of collective action but also exposed how existing systems nourish politics of exclusion in which people are treated as disposable. In this broader ecosystem of societal transformation, Canadian philanthropy is on a path toward a “just transition” that requires more deliberate efforts to abandon false hierarchies, modernize charitable legislative and regulatory frameworks, and co-construct new visions for anti-racist, justice-oriented, and solidarity-based agendas.
To nurture this agenda, The Philanthropist Journal is launching Rethinking Philanthropy, a series of articles that will seek to inform our collective imagination and pathways of change. As an introduction to this series, the following article traces the evolution of Western philanthropic models, which have been employed to legitimize, accompany, and most recently transform social contracts of wealth distribution.
Philanthropy as the backbone of the ‘moral hierarchy of wealth’
The traditional paradigm of philanthropy is built on what Dean Spade, a trans activist and professor of law at Seattle University, calls the “moral hierarchy of wealth” in his book Mutual Aid: Building Solidarity During This Crisis and the Next. Philanthropy emerged as a solution to capitalist accumulation of wealth (which is condemned by all major religious texts and the humanist moral philosophy) by offering a model of corrective action: giving back. Giving back to community (through funding of social programs such as food banks, safe houses, animal shelters) or investing in public projects (libraries, university departments, museums) has offered religious absolution and societal prestige to wealthy benefactors in the West since the 19th century.
This traditional model, outlined in Scottish-American industrialist/philanthropist Andrew Carnegie’s 1889 “Gospel of Wealth,” was, however, largely redefined in the 20th century to challenge policies of economic redistribution (such as taxes). The Margaret Thatchers and Ronald Reagans of the world lowered taxes and de-legitimized public spending, depicting it as cost-ineffective. Fiscal conservatism awarded greater legitimacy to the private sector, shifting the model of a quintessential philanthropist away from people like Carnegie and toward moguls like Bill Gates, who espouses a more prescriptive approach to philanthropic spending in which funders not only part from their money but also outline specific criteria on how it is to be spent. This new model, however, conflates success in capitalist markets with the ability to drive lasting social change. Enter private foundations’ tools for measuring efficiency and effectiveness of charitable actors, after-action reviews, evaluations, corporate strategic planning, and quarterly reports.
Marketized philanthropy
As Angela Eikenberry, a US scholar specializing in philanthropy critique, explains, “marketized philanthropy” is a model that no longer works to counter inequality created in the private sector but, on the contrary, legitimizes private-sector focus on consumption over well-being. Non-profit and charitable organizations cannot be critiquing private companies and their practices because they are busy applying for the grants issued by those companies’ foundations. Challenged to adopt private-sector institutional models, non-profit organizations now operate on growth-oriented models in which raising and spending funding is a mark of success and the old ideal of solving societal problems has emerged as an imprudent objective of running the organization out of business.
Marketized philanthropy turns the accountability upside down, making organizations responsive to funders and not the communities they are mandated to support.
This marketized philanthropy model has been translated to global and national paradigms of philanthropy, as international and national charities, non-governmental organizations, and even United Nations agencies adopted investment-based organizational models, rushing to show their cost-effectiveness and improve donor reporting. This model of philanthropy, extended to broader global development models, strongly prioritizes interventions that could lead to quantifiable outcomes and that, as a result, alleviate the symptoms, without addressing the root causes, of societal problems.
Marketized philanthropy turns the accountability upside down, making organizations responsive to funders and not the communities they are mandated to support. This results in a vicious cycle: the more organizations focus on appeasing donors, the less effective they are at achieving their institutional mandates, which then leaves them more at the mercy of their market-oriented funders. Throughout this cycle, grassroots and community-engaged activists, social workers, and public servants see their expertise undermined by a new class of philanthropic investors, project managers, and armies of consultants.
As this model became normalized, funding community-engaged organizations proved difficult. For example, the current “direction and control” regulations of the Canada Revenue Agency (CRA) require charities to fund those without formal charitable status only as “intermediaries,” therefore undermining the agency and expertise of community-led, grassroots, and non-profit groups.
Fall in philanthropic spending as a breach of the social contract of wealth
As marketized philanthropy, over four decades of unachieved social and environmental objectives, gradually has proved itself a limited model, non-profits are consistently accused of poor resource management and used as scapegoats for a violation of the social contract in which those accumulating wealth eventually give back. The wealthy are accumulating more wealth than ever while proportionately giving less. The CEO-to-worker pay gap has grown exponentially, from approximately 20:1 in 1965 to 58:1 in 1989 and well over 200:1 in 2018, but philanthropic funding has not followed suit. Amidst growing debates on wealth accumulation and with a billion-dollar funding gap between charitable needs and expenditures, Canada seems poised to increase its disbursement quotas for philanthropic organizations, with their $85 billion in frozen portfolios.
Similar trends are recorded on a global scale. As economic anthropologist Jason Hickel outlines, for every dollar that low- and middle-income countries receive in international assistance, they lose $24 in “net outflows” through repayments on loan interests and multinational organizations not paying their fair share in taxes.
From charity to social justice
Charities, non-profits, and multilateral agencies are asked to do more with less while obeying long-disproven models of effectiveness. Incremental fixes are not going to work. With targets barely visible in the distance, philanthropic organizations are asked to stretch their dollars further, run a little faster, work a little harder. After decades of running, however, charities are questioning the entire concept of constant marathons that leave staff drained and social issues they seek to solve largely intact. The solution many philanthropic leaders propose is to stop running and start building.
The call for philanthropy to reinvent its mandates, practices, and partnerships has been amplified by the social mobilization for anti-racist and social justice transformation.
The call for philanthropy to reinvent its mandates, practices, and partnerships has been amplified by the social mobilization for anti-racist and, more broadly, social justice transformation. These agendas, however, question the very fabric of philanthropy’s moral hierarchy of wealth. One attempt at such a transformation is titled “a just transition” to evoke the long-term and fundamental overhaul comparable to that required of the energy sector (a decades-long, forward-looking shift toward a different model of the sector as a whole) but with a strong focus on power. This means acknowledging questions of access to resources, decision-making, and agency to change, as well as historical conditions that have led to and perpetuate current inequities.
Understanding the core difference between charity and social justice
A shift from charity to social justice requires a shift in the definition of success. For example, to address homelessness, a charity model involves a donation to a homeless shelter and focus on short-term outcomes such as the number of beneficiaries. Social-justice-oriented models, on the other hand, prioritize lasting change and address root causes and other pertinent issues. As such, they focus on influencing action plans for affordable housing, intervening at municipal, provincial, and federal levels to advocate for not only lasting investments but also more strategic solutions such as employment and mental health support.
Social justice models require strategies that are long-term and seek systematic change at legislative, institutional, and social-norms levels. These strategies, however, require years of campaigning, lobbying, research, and cross-sectoral collaboration, none of which are consistent with project-based funding models. They also contradict private-sector models of growth, as they would see the funding to homeless shelters and housing charities decrease over the years. Growth-oriented private-sector models, then, cannot be uncritically used as the foundation of non-profits’ organizational models.
A social justice model of philanthropy replaces investment in projects with investment in communities and organizations affected by the very social challenges they are working to solve.
Instead, philanthropic leaders would need to acknowledge decades of research across disciplines such as human rights law, public policy, medicine, education, and social work and recognize the lived and professional experience of activists and practitioners who have dedicated their lives to enacting lasting change. Additional themes emerging here are, therefore, trust and the recognition of lived experience and social science expertise as resources of social change.
A social justice model of philanthropy replaces investment in projects with investment in communities and non-profit and community organizations affected by the very social challenges they are working to solve. This means investing in organizations, not outcomes, because, as the pandemic has taught us, when all the alarms start ringing at the same time and politicians retreat to their cottages, it is people from disproportionately affected communities and social charities that remain on the front lines.
Toward models of solidarity
Just transition is about dismantling false hierarchies and engaging in equality. By supporting organizations as equal partners, foundations are leaving space for genuine long-term relationships between them and their trustees, enabling innovation and creating coalitions based on solidarity. In this way, solidarity emerges not as a point of departure but as continuously co-constructed through coalition-building, as feminist scholarship suggests.
In the current context of exponential technological innovation, we are witnessing rapid shifts in socio-political, economic, and environmental landscapes. Solidarity, then, emerges as more than a romantic ideal of grassroots activists: it offers tools for economies of scale and adaptability. Solidarity enables a systems-level approach, needed to enact change within overlapping and mutually reinforcing systems of exclusion within and among global, national, and local contexts. As Audre Lorde – a seminal anti-racist, queer, feminist activist and poet – put it, “there is no such thing as a single-issue struggle because we do not live single-issue lives.” If we adopt a justice lens to societal challenges and understand that any form of injustice erodes all social agendas, then a just transition of philanthropy urgently requires an anti-racist transformation.
Anti-racist turn of Canada’s philanthropy
In 2020, anti-racist uprisings across Canada prompted solidarity statements across the philanthropic sector. Soon thereafter, however, data revealed that the sector itself has a long way to go in advancing racial justice. A 2021 Statistics Canada survey revealed the overwhelming representation of white people on the boards of charitable organizations. Similarly, analyses of Canada’s charitable funding showed that only 1% of Canada’s charitable funding was allocated to Indigenous charities in 2018. In the same year, Canada’s philanthropic foundations allocated only 0.07% of funding to Black-led organizations and 0.7% to Black-serving organizations.
Increasing the level of funding allocated to organizations led by and working with equity-seeking communities is imperative. The government is recognizing this, judging by the latest Speech from the Throne and Budget 2021 increases in allocations toward criminal justice reform, investments in a Black-Led Philanthropic Endowment Fund and Social Finance Fund more broadly, and services for Indigenous communities.
By giving up the power to judge strategies of survival for which they rarely, if ever, had to fight, philanthropic leaders would send a sign of a genuine commitment to construct collective avenues for social change.
Moreover, more than 70 organizations across Canada have co-constructed a binding sector-wide Anti-Racism Framework for Canada’s International Cooperation Sector and committed to annual reporting on progress, with the baseline report issued in June 2021. Most recently, the Canadian Race Relations Foundation issued a $3-million fund to support the sector’s anti-racism efforts.
Foundations must join this whole-of-society approach to fundamentally transform Canada’s social justice ecosystem by investing in organizations led by Black, Indigenous, and other racialized men, women, and gender-diverse groups (including youth). This should include leaders and organizations whose tone, strategies, and approaches may differ from those the sector has traditionally employed. By giving up the power to judge strategies of survival for which they rarely, if ever, had to fight, philanthropic leaders would send a sign of a genuine commitment to construct collective avenues for social change.
Abandoning saviour narratives of philanthropy
A transformation of Canada’s philanthropy is urgent in light of the eroding paradigms of the moral hierarchy of wealth. To enable a genuine shift toward social justice approaches, philanthropic leaders will need to address the colonial legacy of the sector and its repercussions on existing racial and class divides and the ongoing oppression of Indigenous Peoples across the country and around the world. To do so, past forms of saviourism, in which historically disadvantaged countries and communities are seen as helpless actors waiting to be saved, will need to be dismantled. The shift in mindset is from saving “the other” (whomever that other might be) and, instead, recognizing the responsibility to contribute to a more equitable and sustainable society. This is the thesis Frédéric Gros outlines in his book Disobey, insisting on a “non-delegable responsibility” of engaging in a collective care for the world. As Gros argues, abandoning this reponsibility would be the ultimate self-abandonment.
For a truly “just transition” of philanthropy, saviourist models must be supplanted by horizontal coalitions committed to continuously nurturing cross-sectoral and international solidarity. By recognizing social justice as a collective project we all have personal responsibility to advance, solidarity emerges as a tool for our collective agenda in which it is only rational to invest. It also emerges as a project that could not reasonably be understood as short-term. Instead, we should embrace the worthy project of never-ending struggle for a better world.
If there was ever a time for philanthropy to fuel such a responsibility, it is now. The Rethinking Philanthropy series will encompass diverse voices on dimensions of this sector transformation, proposing reflections on racial justice and new interpretations of feminist practice, reconciliation with Indigenous Peoples, emerging models of leadership, community ownership and self-determination, and legislative and regulatory foundations that support our collective agendas.
