Capitalist Philanthropy:
A Means of Circumventing the State?

K. Sahadevan

On March 13, 2019, Azim Premji, Chairman of Wipro Limited and the third richest man in India (according to the Hurun India Rich List[1]) made an unusual announcement. The announcement was that he would set aside Rs 53,000 crore of his wealth for philanthropy. As a signatory to “Giving Pledge,” the philanthropic project started by Bill Gates and Warren Buffet, Mr. Premji also stated that he would spend about 73% of his stocks on charity works. This would be around 1,45,000 crore rupees ($ 21bn), making it one of the largest donations to charities made by a single person in history. “Azim Premji’s generosity knows no bounds. I salute his awesome philanthropy with deep respect and admiration”[2] remarked Kiran Majumdar Shah, the owner of Biocon Enterprises, another member of the Billionaires Club of India, praised Azim Premji for his generosity. In an interview with Anil Dharkar, a leading journalist and writer, Mr. Premji says, “being rich did not thrill me”[3]. This interview gives us glimpses of Azim Premji’s character where Dharkar portrays him as someone who “owns only a second-hand Mercedes E-Class car,”“travels only in cattle class,” and “not even owning a yacht.”

Although no similar patterns can be seen in Azim Premji’s acts of charity, studies show that philanthropy is on the rise among the elite class in India. Smarnita Shetty, Founder Director, Indian Development Review, says that the number of super-rich entering philanthropic activities is increasing in India, even though it is relatively small compared to the growth in the number of super-rich in the country[4]. According to the 2018 Hurun India Philanthropy List, the number of people who have spent over Rs 10 crore on charity work is estimated to be around 39. Hurun India reveals that Shiv Nadar of HCL spent 770 crores for education, and Reliance Industries Mukesh Ambani gave away 437 crores for education and rural development and Piramal Enterprises owner Ajay Piramal spent Rs 200 crore on health and education[5]. Before we analyse the politics of philanthropic capitalism, which is spreading all over the world, we have to understand the Western models of the charity foundations started by big corporates. We see natural disasters and epidemics being used as an opportunity to implement corporate philanthropy and governments and democratic institutions relinquishing their responsibilities and relying on charitable foundations. In this context, it is essential to understand what the pitfalls behind corporate philanthropy are.

More than a decade ago, in August 2010, the global IT giant Bill Gates and American investor Warren Buffett formed the international philanthropic venture ‘Giving Pledge.’ The Giving Pledge was designed to make the richest people in the world commit to spending a large portion of their wealth on social services. According to the official website of Giving Pledge, 210 people from 23 countries have signed this project by 2020[6]. In addition to Bill-Melinda Gates and Warren Buffett, the world’s richest people include Mark Zuckerberg-Priscilla Chan, David Rockefeller, Lawrence Ellison, Michael Bloomberg, Azim Premji,  Nandan-Rohini Nilakeni and PNC Menon has also part of this pledge. The Giving Pledge covers a wide range of areas, including poverty alleviation, education, health, women’s empowerment, and environmental protection. Bill Gates, the chief organizer of the Global Philanthropic Project, explains,“It’s about building a great tradition of human love that will ultimately make the world a better place.”

The global super-rich spends their wealth on social services through various private charitable foundations. The Bill & Melinda Gates Foundation-BMGF, formed by Bill Gates, the Education Foundation of Mark Zuckerberg and Priscilla Chan, the Buffett Foundation of Warren Buffett, Bloomberg Philanthropy of Michael Bloomberg and Azim Premji Foundation of Azim Premji are a few examples of this private philanthropic foundation.

On December 2, 2015, Facebook founder Mark Zuckerberg announced on his Facebook page that he would set aside 99% of his company’s share for social work. The Mark-Priscilla couple donated about $ 45 billion to the charity fund. In a joint letter to their daughter Max on her birthday, they wrote: “Like all parents, we want you to grow up in a world better than ours today.”They explain by clarifying their social responsibility; “we believe all lives have equal value, and that includes the many more people who will live in future generations than alive today. Our society has an obligation to invest now to improve the lives of all those coming into this world, not just those already here”. Zuckerberg and Chan raise a number of questions that society raises in general through this letter; “ Can you learn and experience 100 times more than we do today? Can our generation cure disease so you live much longer and healthier lives? Can we connect the world, so you have access to every idea, person, and opportunity? Can we harness more clean energy so you can invent things we can’t conceive of today while protecting the environment? Can we cultivate entrepreneurship, so you can build any business and solve any challenge to grow peace and prosperity?” He finds answers to questions in his own actions; “If our generation makes the right investments, the answer to each of these questions can be yes — and hopefully within your lifetime”[7].

Like almost all wealthy philanthropists, Zuckerberg finds education as a way to “make the world a better place” and went on to name his charity ‘Education Foundation’. It can be seen that the Bill & Melinda Gates Foundation, founded by Bill Gates, the new incarnation of philanthropic capitalism, has focused more on the health sector, especially in the promotion of Vaccinations.

Historical and ideological premises of charity
The etymology of the word charity reveals that it originated in the Christian scriptures and that the concept of charity developed with the advent of private property. The word charity derived from the Latin word caritas and entered into a wide range of literary and moral discourses in the middle of the eighteenth century. It is interesting to note that the ‘European Enclosure Act (1773)’ was enacted in England around the same period. Charles Avila explains that views on private property and charity can be found in early Christian texts. Avila more accurately described the primitive logic of American ethos when he said,  “If I am my own, and my labor belongs to me, then what I make is mine”[8]. Avila concludes that this is a logic that drives anything, including land, to become private property. It shows the attitude of the proprietary class that the social distress that arise through the emergence of private property can be solved and dealt with by charitable means. This reveals the inextricable link between the concentration of private wealth and charity.

During the Industrial Revolution, big business groups proved that religious and moral consciousness could be exploited for their interests. They were always careful to hide their encroachments on public resources behind the veil of philanthropy. They spread to various parts of the world through charitable activities to establish their vested interests. As in modern times, their ever-present theme has been ‘poverty alleviation’ and ‘education.’ Ford, Rockefeller, and Carnegie were three of the most important industrial families in the 1920s who had the strongest involvement in philanthropic activities. These three institutions have invested billions of dollars in the name of charity with the world’s largest universities and policy-making/research institutions. Robert Arnov explains that there were three basic ideas behind the charitable activities of large corporations;  (1) to create public opinion in favor of liberal nationalism and strong national governments, (2)form an elite group to cultivate American interests in institutions in different countries, and (3)intervene in the nation-states for the democratic reforms needed to shape a global order and thereby spread neo-liberal reforms9. From the very beginning, they sought to strengthen the spread of ideas in line with their economic and political interests by finding education and cultural activities and securing these goals through research institutions. While pursuing such goals, they were committed to establishing a ‘hierarchical logic of organization’ (Castells, 1994) in such a way as to maintain a sustainable social order that did not question the power of the elite.

Given the breadth of activities that philanthropic foundations engage in, such as social change in support of democracy, liberal governance, and the empowerment of the oppressed, can be seen to lead people with the impression that they are making adequate interventions to lead society to a completely different world order. Charitable foundations enter without hesitation into the wide openings of democracy where the governments and political leaders are reluctant or afraid to penetrate. For this reason, they have always been able to maintain an image of ‘the Almighty to whom we pray for good luck’. Through such interventions, the invisible hands of philanthropic capitalism have been able to maintain their influence in society forever. They succeed in dealing equally with the revolutionary left, the extreme right and religious orthodoxy. At all times, the foundations, which are defined as the exercise of power by the value of wealth, social status, and duration of official positions, are silently and meticulously vigilant in defending the interests and privileges of the elite.

In the broadest sense, the charity foundations exercise its powers in support of scholarly activities — research and policy-making — that legitimize the ‘status quo. ’Its main function will be to divert attention from all discussions of the concentration of wealth and power for  systemic change. It would be nice to think about how they make it happen. The elite class is well aware that the most effective way to influence society is to gain cultural hegemony rather than the direct exercise of power. They know that cultural hegemony could be established by motivating people to ask the wrong questions and create a community that complains about symptoms without looking for the right sources of social influence. They have been successful in using this strategy most effectively at all times.

John D. Rockefeller Sr., the world’s greatest philanthropist, answers the question of ‘Why not create a system where workers receive their share directly?’, “I will be glad to see that the workers are gradually becoming the owners of the same company you are referring to. I am happy to dedicate my assets, in whole or in part, to enter and maintain contact with workers in industrial enterprises”[10]. We have to remember that this conversation took place almost a century ago. The fact is that not a single stake in Rockefeller’s company has been made available to its employees to date. Rockefeller set up a large charity, thereby distributing his assets and his successors are still pursuing it. Even though big corporates and religious institutions spend billions on charitable activities, they do not allow the people who deserve their help to come in even in the shadow of their power structure.

A careful analysis of the research activities in the universities and the topics they deal with exposes the spread of cultural hegemony in society. It diverts or isolates everything that challenges elite privileges and its power structure. By supporting the mild criticisms that do not touch the roots of the system, this ‘compassionate forms’ of capitalism can act the guardians of democracy and eliminate the challenges posed by the inequitable social structure.

One of the greatest explorations of capitalism ever was on producing new ideas in a way that would not harm their economic interests. They achieved this by training young people to look at the various social strata that exist in society as natural and by diverting young people to research activities that promote innovative thinking. Mason Gaffney discusses  this in his book The Corruption of Economics as follows, “Look at the funding methods in the field of sociological research in various universities around the world at the end of the 19th century. The programs at the universities were designed to prevent any thought that would criticize industrial capitalism, especially in the field of economics” (Gaffney, 1994)[11].

The Elite class recognized that higher educational institutions and the cultural capital held by the intelligentsia associated with them were the best means of achieving cultural hegemony. Leading sociologist Indrajith Parmar points out that, all foundations act as intermediaries between economic capital and the cultural capital produced by the intelligentsia[12].

David Schwartz explains the strategic influence of philanthropic foundations on the construction of cultural capital: “the power to establish a new discipline and methodology is not a simple contribution to scientific progress, but always a political ploy to establish, restore, strengthen, protect, or reverse the structure of determining hegemony[13].

New economic powers, with distinct structures of the large industrial corporations that grew up in the late 19th and early 20th centuries, especially the powerful IT-based enterprises after the 1980s, can see identifying themselves as the new forms of philanthropic capitalism. Various sources reveal that Microsoft founder Bill Gates, hailed as the personification of philanthropic capitalism, has spent about $ 46.8 billion on charity through his ‘Bill and Melinda Gates Foundation’ since its inception (2000). Gates, one of the main organizers of the philanthropic venture Giving Pledge, has reportedly distributed billions of dollars worth of shares of his own firm.  The new generation of philanthropists, including Gates and Zuckerberg, consider charity to be the best tool for social change and spend billions on poverty alleviation, disease eradication, education and the empowerment of the downtrodden. They are committed not to violate the basic rules of philanthropy, even when using foundations to divert their wealth to the community through actions that seem most effective and rational. It can be seen throughout these actions that they do not encourage anything that challenges their elite status or power structure.

The strong influence of the elite ideology behind these activities at the individual level can be clearly seen. While these ‘IT overloads’ are cited as good examples of simple lives, they continue to push things in a way that does not detract from their power structure. Paul Schervish, an American sociologist, describes the philanthropic culture and their class character of the super-rich as ‘HyperAgency.’Schervish defines hyperagency “as the array of dispositions and capacities that enable individuals to relatively single-handedly produce the social outcomes they desire, as well as the conditions within which they and others exercise their agency”[14]. One can see that the hyperagency attitude deeply rooted in new high-tech philanthropists. The best example of this is the pledge given by the donors to the ‘Giving Pledge’ formed by Gates and Buffett. Every pledge is one that takes pride in the charitable work they are doing -education, public health, poverty alleviation, child labor eradication, etc.- and rejoices in the opportunity for such services!

Governments and Philanthropic Foundations
A look at the history of philanthropic foundations reveals that the first generation of large philanthropic ventures devised global action plans to protect their class interests and exerted influence in various national governments. The Ford Foundation, one of the earliest trinities of global philanthropic ventures, had become a decisive force in global politics in the middle of the twentieth century. The influence of the Ford Foundation’s interventions during the Cold War was evident. They later revealed that they had spent a significant share of their resources to meet communist challenges and helping democratic institutions.

Theoretical and cultural capital construction, which is conducive to industrial development and market growth, was carried out in the most planned manner. As political regimes operated through the avenues of power, intimidation, and military force and often expelled themselves from history, the philanthropic foundations further strengthened their influence through the use of the ‘soft power,’ of ‘knowledge’ and ‘charity.’ When political parties were swept away by the voters for their wrong social interventions and decisions, no one could stop the philanthropic foundations from using their wealth to make social changes as they please. This is because philanthropist foundations do not become visible forms of power and they exclude themselves from their obligations to answer to society or democratic systems. Yet we see the invisible hands of philanthropic capitalism gripping society more tightly.

One of the most important recipes in the liberalization reforms was the call for the withdrawal of national governments from the social welfare sphere and the cessation of various subsidies. With the new millennium, governments have been making drastic cuts to welfare programs in the areas of women and child welfare, poverty alleviation, education and public health. It has become common seen today that the philanthropic capitalism vigorously entered in the welfare sector, which is neglected by national governments. 

National governments are also making efforts to completely abdicate their responsibilities by adopting the legislative measures necessary for philanthropic capitalism to operate in the social welfare sector.  On April 1, 2014, India became the first country to legally mandate corporate social responsibility. The new rules in Section 135 of India’s Companies Act make it mandatory for companies of a certain turnover and profitability to spend two percent of their average net profit for the past three years on CSR. But another recent piece of legislation has not been widely discussed.  It is pertinent to recall that in the budget session of 2016-17, the then Finance Minister Arun Jaitley repealed the Wealth Tax Act of 1957 and exempted the affluent from tax on wealth.

On the one hand, government spending in the social welfare sector is declining, while on the other, figures show that there is an increase in the use of private funds in the social sector under corporate social responsibility. This is stated in the Annual Report of the Sustainable Development Goals 2030. The Sustainable Development Goals are 17 goals ranging from poverty alleviation, health, gender equality, access to clean water and environmental protection. The India Philanthropy Report 2019 indicates that the private funding for this increased by 15% from 2014 to 2018, while the increase in public funding was only 10 %[15]. (In terms of the amount spent, the government itself is still the largest player, however, it is expected that private entrepreneurs will overcome this in the near future.)

It would be better to look at local examples to understand how the ideologies emanated by philanthropic foundations operating by the corporates are gaining public acceptance and how they extend to the grassroots of society. Plachimada is an excellent example of the uncontrolled exploitation of natural resources that should benefit the entire population of an area and its future generations. The Coca-Cola Company, which had to close down due to the legendary struggle of the local people, is being welcomed back to Plachimada in the name of corporate social responsibility. There is another example of corporates penetration in democratic platforms and implement parallel governance with the backing of CSR. The Kizhakambalam panchayat in Ernakulam district has become the first corporate governing town in India shows the apolitical nature of Kerala society. This is the result of the degeneration of mainstream political parties, which have lost ideological convictions and political tools, into mere executors of corporate ideology. There are numerous examples around us, of NGOs, charities and religious institutions easily entering into areas where political movements and the state are reluctant to enter and strengthen their influence.

Growth of Philanthropic Capitalism and Social Inequalities
It can be seen that the main areas in which they have been involved since the birth of philanthropic capitalism are ‘poverty alleviation’ and ‘reduction of social inequality.’ The amount spent on poverty alleviation and other welfare sectors is staggering. But it is not hard to see that there is an inextricable link between the growth of philanthropic organizations and the growth of social inequality around the world. In India itself, for example, social inequality is on the rise at a time when the number of the super-rich is on the rise. It is undeniable that as the concentration of wealth becomes stronger on the one hand, so does the level of inequality on the other. Statistics show that this phenomenon is exacerbated in ‘emerging economies’ such as Brazil, India and China. According to economist Thomas Piketty, “people are increasingly aware that the influence of billionaires has grown to proportions that are worrisome for democratic institutions, which are also threatened by the rise of inequality and “populism” (Piketty, 715, 2020). But in the name of the charity they are doing, Piketty asserts, “all criticism is forgotten: their quasi-monopolistic behavior is ignored as are the legal and tax breaks they are granted and the public resources they appropriate”16. Throughout history, we have seen many examples of philanthropic foundations avoiding democratic systems and leading to their bankruptcy in poor countries.

The situation today is that policy decisions open up the possibility of plundering public resources and amassing wealth for big companies and forcing people to accept the charities of the same companies. Governments are actually subsidizing the charity work  by announcing freebies and tax holidays for the super-rich at  the expense of the poor. Political leaders are encouraging people to applaud philanthropic capitalism by hiding this reality. It is important to understand that changes within political leadership are the main reasons for this. An examination of the economic and social relations of the people’s representatives in India reveals that the political leadership has become an elite group with no understanding of the basic problems of the people or the extent of social inequality. According to a report released by the Association for Democratic Reforms on May 28, 2019, 90% of the elected representatives in the Indian Parliament are millionaires. The report indicates that 265 out of 301 representatives of the Bharatiya Janata Party, 43 out of 51 members of the Congress and a large percentage of members of other parties are millionaires. These figures give an answer as to why elite interests are protected in policy-making and legislation.

We can see that, from large corporate entities to small businesses and individuals becoming powerful tools for maintaining status-quo. They are the executors of elite morality and supremacy and divert or trivialize all questions that arise against the system and cultural hegemony. It should also be remembered that these patriarchal dramas are celebrated in the very democratic arenas established by the people through long struggles and sufferings. The stagnation of democracy, it faces today, cannot be overcome without defending the reactionary patronage of the elite and the cultural and intellectual values they espouse.

1. Hurun Rich List India,
2. Kiran Mazumdar Shaw on Azim Premji,
3. Interview Azim/Anil/Open magazine,
4. Growing philanthropy in India/IDR,
5. Hurun India Philanthropy List,
6. The Giving Pledge Official Website,
7. Mark Zuckerberg & Priscilla Chan, a Letter to Our Daughter
8. Avila, Charles (1983); Ownership: Early Christian Teaching, quoted in IndiayileAadivasiCorridorilsambhavikkunnathu, by K.Sahadevan, vidyarthi Publication, 2016
9. Arnove, Robert (1980)ed.; Philanthropy and Cultural Imperialism: The Foundations at Home and Abroad,
10. Conversation with John D Rockefeller;
Howe 1980,  quoted in “Revisiting the ‘Big Three’ Foundations” by Robert Arnove& Nadine Pinede, Critical Sociology 33, 2007    
11. Gaffney, Thomas (1994); The Corruption of economics: Neoclassical Economics as stratagem against Henry George, University of California.
12. Parmar, Indrajeet (2015); The Big 3 Foundations and American Global Power, American Journal of Economics and Sociology, Vol. 74, No. 4.   DOI: 10.1111/ajes.12115.
13. Swarts, David (1997); Culture & Power, The Sociology of Pierre Bourdieu, The University of Chicago Press, Chicago.
14. Schervish, Paul.G (2003); Hyperagency and high-tech donors: A new theory of the new philanthropists, Boston College University Libraries.
15.India Philanthropy Report 2019, Bain & Company,
16. Picketty, Thomas (2020); Capital & Ideology, The Belknap Press of Harvard University

K.Sahadevan is an environmentalist from Kerala. He has been writing on Energy, Economics and Environment past few decades. He has authored half a dozen books on these topics and a regular contributor of Various Journals and Newspapers.

Aug 8, 2020

Sahadevan K

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