City Journal

Guy Sorman
The Philanthropic Spectacle
When giving is more about show than results
Autumn 2013
Al Gore's green activism has made him wealthy while polarizing the environmental debate.
Uriko Nakao/Reuters/Corbis
Al Gore’s green activism has made him wealthy while polarizing the environmental debate.

Bill Gates is putting out a call to inventors,” the CNN story began last March, “but he’s not looking for software or the latest high-tech gadget. This time he’s in search of a better condom.” Incongruous as the story seemed, the former Microsoft titan had joined the struggle against sexually transmitted diseases. The Bill and Melinda Gates Foundation was offering a $100,000 start-up grant to anyone who could design a condom that didn’t interfere with sexual pleasure. Rachel Zimmerman, host of public radio’s CommonHealth, called the Gates Foundation’s initiative “truly inspired.” But was it? After all, the latex industry has pursued the same goal for decades and devoted many millions of dollars to the effort. What’s the point of a philanthropist trying to do what the market is already doing?

Call this philanthropy for show, a kind of celebrity giving designed for a mediatized age, based on grand gestures, big dollars, and heartwarming proclamations—but too little concern with actual results, which often prove paltry, redundant (as with the condom initiative), or even destructive. The American media often revel in controversy, so one might expect that the gap between expansive promises and disappointing outcomes would prompt intense journalistic interest. But for the most part, would-be statesmen-humanitarians—such as Bill Clinton, Gates, and Al Gore, along with entertainment- world benefactors like Oprah Winfrey and academic superstars like Columbia development economist Jeffrey Sachs, have gotten a free pass for their good philanthropic intentions. They and their cohorts deserve closer scrutiny.

Oprah Winfrey is an icon of twenty-first-century American popular culture, a prominent supporter of Barack Obama, and the richest black woman in the world, with an estimated wealth of $2.8 billion, according to Forbes. She can serve as an early exemplar of the philanthropist for show: the celebrity savior.

In 1986, Winfrey launched her nationally syndicated daytime television talk show, which soon developed a record-breaking audience and would run for a quarter-century. The program helped establish the now-ubiquitous format in which real people talk in front of a live audience about their myriad emotional problems. Winfrey would then console her guests with just the right mix of pop psychotherapy and mystical uplift. To go beyond what she could accomplish on her show and truly improve the life chances of the poorest among her fellow Chicagoans, a now-famous and fabulously wealthy Winfrey decided in the early nineties to venture into philanthropy. She became the prime mover of, and donor to, a multimillion-dollar nonprofit initiative called Families for a Better Life, whose mission was to lead 100 poor families from welfare dependency toward economic autonomy by providing job training, educational aid, and financial counseling. The program, launched in 1994, was run by the Jane Addams Hull House Association, a venerable social-services nonprofit. Winfrey’s news conference announcing the initiative made national headlines, the press portraying her as a Madonna of the ghettos; it was a public-relations bonanza.

Two years in, though, Winfrey quietly called a halt to the program. It turned out that Hull House already had spent $1.3 million (most of it Winfrey’s money) on just seven families. According to the Harvard sociologist Peter Frumkin, who made the project a case study in philanthropic failure, only five families actually finished the program of social reintegration. That worked out to about a quarter of a million dollars per family helped.

Where did all the money go? Most of it burned up in the nonprofit’s administrative and research costs. Frumkin blames Winfrey not for her lack of success—which isn’t blameworthy in itself—but for never acknowledging that the initiative was a disaster or trying to explain what went wrong. From such failures, all philanthropists could come to understand why some programs are useful and others wasteful—or worse. But there were no press conferences announcing Winfrey’s withdrawal—indeed, in one of the few articles on the program’s sputtering end, the Chicago Tribune complained that it couldn’t get her to discuss her involvement.

Winfrey has subsequently exercised much of her generosity in the distant, disadvantaged neighborhoods of South Africa, leaving this early misadventure behind her. But the pattern it exhibited—ambitious goals, fawning and extensive media coverage of the celebrity donor at the outset, program failure, and little attention paid to the lessons of that failure—regularly shows up in other instances of philanthropy for show.

Consider America’s most in-the-news ex-president’s nonprofit work. Bill Clinton left the White House in 2001 a somewhat popular figure, despite his 1998 impeachment for obstruction of justice and lying about his infidelities with intern Monica Lewinsky. Nevertheless, the outgoing president owed $12 million to the lawyers who managed to save his presidency, and his reputation was sufficiently tarnished that his vice president, Al Gore, wanted little to do with him in his own presidential bid. Clinton’s challenge, then, was to pay his legal bills and burnish his postpresidential status. What better way to do both than through philanthropy for show?

In 2001, Clinton started the foundation bearing his name, financed by the infamous “friends of Bill.” Every September since 2005, the former president has assembled business and entertainment elites to the annual meeting of his Clinton Global Initiative, where they promise to donate generous sums to save the world. The CGI, organized on the model of the Academy Awards, has “changed the lives of 400 million people in 191 countries,” in the words of a fund-raising film. But where, exactly, and how? No one knows. This much is certain: Clinton is far more skillful at fund-raising and making promises than in administering his foundation’s enormous assets or resolving its numerous conflicting priorities, as a damning New York Times exposé reported in August—a rare and surprising example of the media holding philanthropy for show to account. The deficit-ridden foundation, the Times reported, “had become a sprawling concern . . . vulnerable to distraction and threatened by conflicts of interest,” making it difficult “to disentangle the Clintons’ charity work from Mr. Clinton’s moneymaking ventures and Mrs. Clinton’s political future.”

In January 2010, after a 7.0 magnitude earthquake decimated Haiti, hundreds of charities around the world raised $4 billion for relief. United Nations secretary-general Ban Ki-moon named Clinton to preside over a Haiti Reconstruction Commission to coordinate the relief effort and ensure that the money was well spent. The commission met three times at a luxury hotel in Port-au-Prince before disappearing without a trace. A year after the earthquake, the American Red Cross, which had received most of the donations, disclosed that it had spent only 20 percent of relief funds “for lack of satisfactory programs on site.” Last year, the organization reported that, while it had raised nearly $500 million for Haitian recovery, hundreds of millions remained unspent. The Red Cross invested these reserve funds in interest-bearing accounts, which finance its administration—a common practice in the humanitarian world.

Nearly four years after the quake, it remains impossible to sort out what philanthropic institutions have spent in Haiti and what the groups have kept for themselves. To visit Haiti today is to see how donations have evaporated. Sure, some Haitian intermediaries and certain ministers have benefited—as have numerous employees of foreign NGOs, who live comfortably in one of the world’s most impoverished nations. Yet though he was supposed to coordinate relief and guard against waste and corruption, Clinton visited Haiti only twice before returning in January this year to commemorate the catastrophe’s third anniversary, partaking in the usual photo ops. CBS News reported on that occasion that only half of all the donated money had found its way to Haiti.

Clinton’s philanthropy for show isn’t restricted to Haiti. In September 2005, the ex-president traveled to China, announcing his plans to help AIDS victims there—among his foundation’s marquee missions is AIDS research and prevention, a favored cause among celebrity philanthropists. At the time, Chinese officials continued to deny publicly the very existence of the disease in the country, despite its obvious effects on the population (see “The Empire of Lies,” Spring 2007). AIDS sufferers found themselves exiled to the impoverished Henan province, where they lived miserably in modern-day equivalents of leper colonies. At least 200,000 inhabitants had contracted the disease by selling their blood to collection companies that extracted the plasma, paid cash in return, and violated all rules of proper hygiene. After the Chinese democratic activist Hu Jia pointed out publicly that the plasma firms had close ties with local Communist Party officials, he wound up imprisoned for three years.

Alerted by alarming reports on the crisis in the New York Times, the Wall Street Journal, and France’s Libération, Clinton proclaimed that he would himself deliver several tons of medication, donated by his foundation, to Henan. Local authorities gave him a warm welcome in the provincial capital, Zhengzhou, but they convinced him that visiting the contaminated villages would require a long and dangerous journey. Chinese bureaucrats were convinced that the HIV virus could transmit through the air, which is partly why they confined the sick to villages, to which they banned visits. The villages were in reality only an hour from Zhengzhou, accessible by serviceable roads. Deferring to his hosts on the travel issue, however, Clinton let himself be photographed in front of a Zhengzhou dispensary, constructed especially for his visit. In the photo, published widely in the Chinese press, Clinton is surrounded by eight supposedly AIDS-afflicted children, all beaming in radiant health; provincial leaders told him that the children were “responding well to treatment.” Clinton triumphantly returned to the United States; the medicine reportedly never made it to the Henan victims.

A precedent for Clinton’s China fiasco comes to mind: in 1944, U.S. vice president Henry Wallace visited Magadan, the “capital” of the Soviet gulag. Seeing nothing there that troubled him, Wallace declared that the “labor camps” were just a legend. In 1952, though, Wallace acknowledged that he had been duped by Stalinist propaganda. Can we expect a similar admission someday from Bill Clinton?

After losing the 2000 presidential election, former vice president Al Gore was at a low point. Like his former boss, Gore would find a new life in philanthropy for show. He returned to an old cause—environmentalism, especially global warming, which at the time had not fully captured public awareness. In 2005, Gore founded the Climate Reality Project, a nonprofit dedicated to fighting global warming. The next year, with the support of the former eBay president and billionaire Jeff Skoll, Gore and filmmaker Davis Guggenheim produced an extravagant “documentary,” An Inconvenient Truth, to promote his philanthropic vision. Aided by high-quality special effects, the film warns of the impending destruction of civilization from climate change, barring an immediate return to the age of windmills. The film, distributed worldwide, won several major prizes, including an Academy Award for best documentary. Al Gore became a philanthropist-prophet.

Using uncorroborated and misleading data, An Inconvenient Truth gets much wrong, as numerous critics have noted. Gore assumed an average global temperature increase of 18 degrees Fahrenheit by 2100, for example, even though the International Panel on Climate Change, directed by Rajendra Pachauri (corecipient, with Gore, of the 2007 Nobel Peace Prize), predicts an average increase of seven degrees under a worst-case scenario. Gore predicted a ten-foot rise in sea level over the same period, which the film dramatizes with a scene showing New York City inundated by 50-foot waves. This was rip-roaring entertainment, to be sure, but Gore was claiming the mantle of scientific authority. His exaggerations, given legitimacy by the Nobel Committee, only damaged the cause he claims to defend. If man-made global warming exists, Gore’s sensationalism has contributed to taking the discussion of potential solutions out of the realm of science and into that of ideology. Thanks largely to Gore and his acolytes, the climate-change debate no longer takes place among knowledgeable people who might disagree about its extent and its causes; instead, enemy camps of believers and disbelievers square off, forever irreconcilable.

Gore’s green evangelism has apparently afforded him a comfortable lifestyle. More than one observer has noted the contradiction between Gore’s prophetic status and his 10,000-square-foot, air-conditioned Nashville home. The Gore residence consumes 20 times the energy of an average American house, according to Tennessee’s Center for Political Research. The group recommended that Gore receive an Oscar for hypocrisy rather than for best documentary. “I only consume green energy,” Gore said in his defense, though his home connects to the urban electricity grid. Gore’s hypocrisy became even more flagrant when he earned $100 million (pretax) from the sale of Current TV, the modest cable network he started in 2005, to Al Jazeera, the Qatar-based television station financed by Arab oil sheikhs.

Perhaps the twenty-first century’s most conspicuous practitioner of philanthropy for show, however, has been Bill Gates. Until 2000, the Microsoft founder was the richest entrepreneur in the United States and the second-richest man in the world; after 2000, he became the most generous philanthropist in history. In June 2007, Gates received an honorary doctorate from Harvard, where he had dropped out 32 years earlier. Responding to a student’s question, Gates observed that it was “as hard to spend a billion dollars a year as to earn it.” It’s worth asking, though, which Gates has done the greater service to mankind—the canny businessman who built a $90 billion personal fortune by making the personal computer accessible to everyone, or the man who, at 52, stepped down from his Microsoft perch to work full-time at the Bill and Melinda Gates Foundation.

Certainly, the second Gates has won more esteem than the first did. Unlike his old rival Steve Jobs, Gates was never that popular as a businessman. When he presided over Microsoft, the U.S. and European media portrayed him as a rapacious capitalist who succeeded largely by appropriating the ideas of more clever inventors, buying up businesses more innovative than his own, and abusing his power and position. Like John D. Rockefeller, Andrew Carnegie, and other “robber barons” of the late nineteenth century, Gates often took to the newspapers to defend himself and his company against charges of anticompetitive behavior. It’s probably no coincidence that Gates’s first major philanthropic donation, in 2000, came amid the U.S. Justice Department’s antitrust suit against Microsoft.

Gates’s transformation into a philanthropic benefactor has dramatically elevated his public status. A 2010 USA Today/Gallup poll found that Americans admired Gates the philanthropist more than they did the Dalai Lama or the pope. Whether acquiring Leonardo da Vinci’s Codex for $30 million—thus establishing himself as a great art collector alongside Henry Clay Frick and John Paul Getty—or using his foundation to distribute mosquito nets to children in Malawi, Gates has attained the status of a great international statesman without ever holding office. Gates the business executive had to answer to stockholders, board members, regulators, and, of course, the marketplace; Gates the philanthropist, with a foundation ten times wealthier than Rockefeller’s, essentially answers only to his conscience. He seems happier for it.

Still, as Harvard economist Robert Barro bluntly tells me, “Gates the boss did more for humanity than has Gates the philanthropist.” Barro’s argument, laid out in a 2007 Wall Street Journal op-ed, distinguishes between the considerable financial benefit that Microsoft brings to its stockholders and the even greater “social benefit” that accrues to the billion users of the firm’s software. The software’s social value, he explains, is equal to the value added from the product—the increased productivity that it brings to the businesses and homes that use it—minus the purchase price. “A conservative estimate, in a model where software serves as a new variety of productive input, is that the social benefit of Microsoft’s software is at least the $44 billion Microsoft pulls in each year,” Barro writes. “When capitalized with the same ratio (22) that the market applies to earnings, this flow corresponds to a valuation of $970 billion.” That is, Microsoft’s future operations would create a benefit to society of nearly $1 trillion—ten times the projected total of the Gates Foundation’s gifts over the next century.

Barro suggests that spending $1 billion may not be as difficult as Gates makes it out to be—he could, say, distribute it directly to some needy Americans. Doing this, though, would deprive Gates of a job and probably any media interest. Nor would it do much to reduce world poverty, a key Gates Foundation goal. But after 12 years of operation, has the foundation come any closer to realizing this grand ambition?

The Gates Foundation's African development efforts have spent billions but achieved little.
Andy Rain/epa/Corbis
The Gates Foundation’s African development efforts have spent billions but achieved little.

Not in Africa, anyway. Looking to unleash a “Green Revolution” in East Africa similar to India’s—which the Rockefeller Foundation funded to great effect during the 1960s, eventually helping to make the vast country agriculturally self-sufficient—the Gates Foundation has spent about $700 million annually since 2007. But the foundation’s funding strategy is precisely the opposite of what worked in India decades ago. To improve Indian wheat-seed yields, Rockefeller operated its own research labs in Mexico under the direction of American agronomist Norman Borlaug, who would win the Nobel Prize for his work in 1970. The Gates Foundation’s African food project, by contrast, funds seed research overseen by Kenya’s corrupt government. In other words, the foundation conducts itself in the region as if it were a state donor or the World Bank, offering foreign aid to a government recipient.

Significant agricultural breakthroughs haven’t materialized. One problem may be that Kenya’s best agronomists have moved to the United States, where they can work more freely and remuneratively. But the deeper issue is that this kind of aid has never been effective, agriculturally or economically. Over the past three decades, only nations that renounced authoritarian economic policies in favor of greater private entrepreneurship and commerce have reduced mass poverty: India, Brazil, China, Ghana, Mauritius—countries with extraordinarily diverse cultures—all made enormous economic progress after freeing up their markets. Foreign aid, the evidence shows, is useful mostly just to its immediate beneficiaries: larcenous heads of state, bureaucrats administering the aid, and, perhaps, the occasional impoverished peasant put on display to prime the philanthropic pump. Worse, such aid props up kleptocracies and thus prevents development. If the Indian government in the 1980s had brought in aid comparable with what the Gates Foundation is spending today in Africa, India may never have started down the path to growing prosperity.

A romantic attitude about small farmers also undermines the Gates Foundation’s African agricultural efforts. India’s remarkable Green Revolution remains suspect on the left because it concentrated land among a limited number of agricultural entrepreneurs, sending countless displaced peasants to seek their future in the nation’s teeming cities. Such consolidation, though, remains a necessary condition for boosting agricultural productivity—paving the way for industrialization and economic development. To put Borlaug’s seeds to work in India required breaking with the inefficient fertilization and irrigation practices of small peasant landholders, who fiercely resisted changing their traditional ways, and the same would be true in East Africa. Unfortunately, the Gates Foundation promises that its African Green Revolution, by increasing crop yields, will actually help the small peasant cling to his ancestral plot, which might delight visiting Western celebrities but will do little to advance African development.

When asked how spending $700 million yearly on agriculture has improved the lives of Africans, Geoff Lamb, the Gates Foundation’s director, struggled to provide an answer. It’s an inherently difficult enterprise, he conceded, adding: “There is no simple solution. At the Gates Foundation, we first thought that a miracle seed was the solution, but then it became clear that the distribution infrastructures were lacking, and that the necessary markets did not exist.” Six years and billions of dollars later, the Gates Foundation seems to be discovering what development economists already know: what Africa lacks is the rule of law and a political system that supports free enterprise. To apply again Barro’s provocative idea: Wouldn’t it be better simply to distribute the $700 million to African peasants directly each year? Surely, they would know better what to do with it than Kenyan government officials would. Lamb demurs: “The money belongs to Bill and Melinda. They can do what they want with it, right?”

And that they do—and not just in Africa. Between 2000 and 2005, to take just one of its myriad projects, the foundation spent $1 billion constructing small schools in the United States. Gates believed that American public schools were mediocre because classes were too large. Student academic achievement did not improve, though, and the foundation eventually abandoned the project after its director conceded failure and resigned. Unlike Winfrey, Gates admitted his mistake, for which he deserves credit. But the presumed virtue of small schools was based solely on his own intuition; it had no basis in science. Will Gates similarly recognize and reverse his foundation’s African folly?

In the fight against malaria in Africa, Gates has also been more philanthropist for show than an effective donor. Without question, treating and preventing malaria in sub-Saharan Africa is a vital cause. Of the 655,000 deaths that the disease caused worldwide in 2010, the World Health Organization reports, 90 percent were in Africa. But the Gates Foundation, exhibiting a suspicion of capitalism similar in spirit to its agricultural romanticism, decided to give East African villagers, particularly in Malawi, mosquito nets treated with insecticide, instead of selling them the nets. After all, isn’t it nobler to give the nets away and not take money from poor Africans? Wouldn’t Gates be accused of profiting at their expense? Yet studies show the relative effectiveness of selling such goods to the poor, even at a merely symbolic price: the buyer of a net will tend to understand its importance and make better use of it than someone who receives a net as a charitable gift. (One of the only studies vaguely favorable to the free-mosquito-nets approach was written by Esther Duflo, an MIT economist close to the Gates Foundation.)

The Gates Foundation has also ignored the political and cultural context of its work, placing too much emphasis on finding a silver-bullet scientific solution to the malarial plague. Gates is an engineer with a much-noted passion for solving technical problems, so it’s understandable that his foundation has invested considerable sums in the search for a malaria vaccine. But the stubborn fact remains: malaria is most prevalent in the poorest countries. In the United States and in Europe, malaria was commonplace until economic development, improvements in public health, and DDT essentially wiped it out. Malaria would be brought under control much faster in Africa through more honest and effective governance than through pursuit of a vaccine, but the Gates Foundation’s toleration of unsavory government partners makes it an unlikely critic. Gates would do better to heed the example of the African-born British philanthropist Mo Ibrahim. After earning a fortune in the mobile-phone business, Ibrahim created a foundation that offered a $5 million prize—plus an annual lifetime income of $200,000—to any African head of state who had governed his country honestly and then voluntarily given up power. Needless to say, the prize isn’t awarded every year.

The Gates Foundation’s politically naive, science-first approach to fighting malaria has its critics among medical experts in Africa, but they mostly make their complaints privately and off the record, perhaps because of the influence of Gates’s money. (In Malawi, it’s worth noting, 85 percent of the local doctors left their local practices in order to join research centers funded by the foundation.) If Gates’s approach to philanthropy were truly scientific in spirit, he would recognize these problems and correct course. But other critics, especially in diplomatic circles, believe that Gates is motivated more by the desire to be received as an unelected head of state—a super-philanthropist at home among the world’s power brokers—than by any deep, humanitarian passion to do what’s really best to improve the lot of Africans.

Gates’s support for Columbia University economist Jeffrey Sachs’s Millennium Villages in Malawi does little to dispel that harsh, and admittedly unproven, charge. Something of a rock star in the development world, Sachs argues that the only reason billions of dollars in international aid have failed to spur development so far is that rich countries haven’t given enough. To prove his case, Sachs—with the support of, among others, U2 lead singer Bono as well as the Gates Foundation—has poured massive sums of money into a single impoverished area of Malawi, a cluster of villages with about 20,000 inhabitants. Certainly, those 20,000 people in Sachs’s Millennium Villages live more prosperous lives than before. But Bunker Roy, an Indian activist in the Gandhian tradition, remarked after visiting Sachs’s development that the money spent there to date could have fed 200,000 people over the same period. The Millennium Villages’ centralized, top-down direction ensures that whatever prosperity they create does not extend beyond their boundaries. Outside these contemporary Potemkin villages, Malawi remains a ravaged nation—as do others in Africa where Sachs has brought his Millennium approach.

Journalist Nina Munk, author of a new book about Sachs, The Idealist, spent years traveling back and forth to his Millennium Villages, especially those in Dertu, Kenya, and Ruhiira, Uganda. Everything Sachs’s staff tried in Dertu flopped, and the Millennium Village was abandoned there; Ruhiira proved more successful, and the Sachs organization regards the Ugandan project as a triumph for its approach. “There is no question the lives of people in Ruhiira have been improved,” Munk told New York Times columnist Joe Nocera. But like Roy, she is skeptical that any grand theories have been vindicated here—beyond the simple premise that pouring millions into a small, impoverished village is bound to help some people. More sophisticated assessments have not been possible because Sachs doesn’t allow outside evaluation of his work: Give Well, a respected philanthropic watchdog organization, has not obtained a single piece of quantitative data from him.

Malawi seems to be a hotbed of philanthropy for show. Madonna adopted a boy in 2006 and a girl three years later in the country, not far from where Sachs has set up shop. The birth parents of both children received undisclosed compensation for giving them up to the singer. Madonna also “lent” $11 million of her own money to build a school for girls in the area; it was never built, her donation going up in smoke. Malawi is also where Brad Pitt and Angelina Jolie go to collect orphans. The writer Paul Theroux, who taught in the country, draws an analogy between the compassionate imperialism that Rudyard Kipling praised in “The White Man’s Burden” and the exhibitionist philanthropy of Gates, Jolie, Sachs, and their ilk: he calls the updated version “The Burden of Rock Stars.” A century after Kipling, philanthropy for show casts the African again in the role of the hopeless savage, who can’t get ahead on his own.

Ego has often been the fuel for efforts that delivered great advances for humanity—improved medicines, new technologies, profound works of art. Philanthropy for show, however, has frequently served as an ego gratifier, without much in the way of compensating benefits. Often undertaken from a distance, too easily escaping evaluation and criticism, it tends to deliver wonderful photo ops but improve few lives. Those who genuinely wish to alleviate suffering in the world should look past its dazzling presentations to more proven, if less glamorous, remedies.

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