Wealth has had a huge impact on society through the ages - but is it good for the wealthy to influence society?

Recorded philanthropy can be traced back to the ancient Greeks. In 347 BC, the famous philosopher Plato specified in his will that the proceeds of the family farm were to fund an academy in his name. This created the first known place where scholars could debate the mysteries of the universe and profoundly shaped Western philosophy through the ages. [1] In the 24 centuries following Plato’s donation, many other wealthy individuals and families have profoundly shaped their societies through philanthropic activity. We’ll now share some of their inspiring stories from across the world.

Case study: Selected philanthropists from around the world

Carlsberg family, Danish brewers (since late 19th century)

The family behind the world’s third-largest producers of beer are not actually called Carlsberg. A Danish brewer and industrialist, J.C. Jacobson, established the brewery in 1847 and named the enterprise after his son, Carl, and the small hill (‘berg’) where it’s based. After three decades of rapid expansion, Jacobson established the Carlsberg Foundation and effectively bequeathed his life’s work to science, scholarship, art and culture. The Foundation has dual objectives. As well as acting as the board of the Carlsberg Brewery, it generously funds and supports research within the humanities, social sciences and natural sciences.

J.C. Jacobson firmly believed we must understand the past to shape our future, and one of his first significant philanthropic gestures was establishing the Museum of National History in 1878. Carl was more focused on art, and in the following decades he funded statues across Copenhagen, made his private collections accessible to the public and inaugurated The Danish Museum of Art and Design. His vision was to make art as accessible and enjoyable to the widest audiences possible.

Today, the Carlsberg Foundation continues its commitment to quality, responsibility and civic-mindedness – the same values guiding J.C. Jacobsen when he created it. It continues to support research within the natural sciences, humanities and social sciences to raise our intelligence, address global challenges and increase growth and welfare. There is a key focus on providing universal benefits to society,

Rowntree family, British confectioners (since early 20th century)

Let’s start our review of some of history’s great philanthropists in Victorian Britain. Rowntree’s, a family confectionery business based in York, was becoming very successful and making brothers Henry and Joseph extremely wealthy. However, even as a powerful businessman, Joseph was deeply committed to improving his employees’ quality of life. While many entrepreneurs of his time were exploiting their workers, Rowntree provided his factory staff with fair wages, free education, access to healthcare, and a pension fund. This laid the foundation for a life of philanthropy, and his focus expanded from the welfare of his workers to the wider community. Rowntree significantly improved the lives of the inhabitants of York by providing affordable, decent housing and recreational facilities.

He went on to fund and actively lead many charitable causes, and in 1904, he created three trusts – all of which are still in existence today. Joseph Rowntree strongly believed the way to remedy society’s injustices was to address root causes rather than relieve their negative consequences. Two of his trusts are dedicated to social reform. And one was deliberately set up as a limited company to undertake social and political work not legally allowed by a charitable trust. Joseph’s son, Seebohm, continued his father’s pursuit of social justice and commissioned three highly influential studies of poverty that greatly shaped twentieth-century welfare reform in the UK.

Andrew Carnegie, Scottish-American industrialist (since early 20th century)

In the same year that Seebohm Rowntree first investigated poverty in York (1899), Andrew Carnegie wrote his own “Gospel” on how billionaires have a responsibility to give their wealth away. The Scottish-American industrialist went on to give away almost 90% of his vast fortunes during his lifetime. In his “The Gospel of Wealth” essay, Carnegie argued that private fortunes should be used to improve society, and he certainly practised what he preached. After making his money in steel, he dedicated his life to large-scale philanthropy. By the time of his death, Carnegie had given away around USD350m (equivalent to USD77bn in today’s terms), making him one of the most generous men who ever lived.

Andrew Carnegie is now considered by many to be the father of American philanthropy. Yes, others before him had contributed substantially to charitable causes, but he was the first to publicly declare that wealthy individuals have a moral obligation to give back to society. Carnegie was particularly interested in expanding educational opportunities. He funded approximately 3,000 community libraries worldwide as well as universities, learning institutes and museums to provide “ladders upon which the aspiring can rise”.

Koç family, Turkish industrialists (since mid-20th century)

The concept of giving back to society is by no means limited to Western cultures. Turkey has significantly benefitted from the generosity of wealthy citizens including Vehbi Koç, who is credited with creating modern philanthropy in Turkey. After opening his first grocery store as a 16-year-old in the early twentieth century, Koç went on to become one of his country’s wealthiest self-made people.

In 1969, he established the Vehbi Koç Foundation to promote advancements in education, health and culture. The foundation funded a world-class university, many schools and over 190,000 educational scholarships.  In addition to being the largest non-profit healthcare operation in Turkey, it also created the country’s first private museum. In fact, Koç’s commitment changed the law to allow individuals to open museums. Furthermore, he encouraged others to establish charitable foundations in Turkey, and his selfless dedication to the well-being of his compatriots inspired a new wave of philanthropists in his country.

Safra family, Brazilian-Lebanese bankers (since mid-20th century)

Until his death in 2020, Lebanon-born Joseph Safra was the world’s richest banker and the wealthiest person in Brazil. But throughout his meteoric rise to the top of the wealth charts, he complemented his business achievements with charitable giving. Joseph’s banking empire was multinational, yet he remained loyal to his ethnic roots. He was deeply involved in Jewish community affairs, spending a great deal of his time and fortune supporting health and education projects and funding the construction of synagogues and community centres. His surviving wife heads the Vicky and Joseph Safra Philanthropic Foundation that continues to back causes that were close to Joseph’s heart.

Meanwhile, Joseph’s brother, Edmund, was also an extraordinary philanthropist throughout his separate successful banking career. Just like Joseph, Edmund was committed to his religious faith, and funded the construction and renovation of synagogues and pilgrimage sites all around the world. He also donated millions of dollars to provide treatment for the sick, and hospitals across the globe benefitted from his generosity.

Additionally, medical research has benefitted greatly from Edmund’s philanthropy. One area he focused on was Parkinson’s disease, which unfortunately claimed the life of his brother, Moise – who was also widely admired for his philanthropy. Edmund Safra received worldwide recognition for his philanthropy, including being named as Chevalier de la Légion d’Honneur by the French government and Commandeur de l’Ordre de Rio Branco by the government of Brazil.

Edmund’s widow, Lily, inherited his fortune and reputation as a philanthropist. She chairs the foundation set up in her husband’s name, and her altruism often makes media headlines. On at least two occasions, she auctioned personal collections of furniture, art and jewellery, and then donated the considerable proceeds to charity. Lily’s many beneficiaries include brain disease and children’s charities. In 2019, she was in the news again after pledging EUR10m towards the restoration of Notre-Dame de Paris following the devasting fire.

Aliko Dangote, Nigerian cement and sugar industrialist (since late 20th century)

Philanthropy in Africa has also risen significantly in the last decade, and the continent’s richest man, Aliko Dangote, also appears to be the most generous “giver”. The Nigerian cement and sugar baron established his private charitable foundation in 1994, and it’s now endowed with USD1.25bn. Over the last three decades, it’s provided tens of millions of dollars to health and educational causes, but it’s also heavily committed to empowerment and humanitarian relief.

In 2011, he launched a ground-breaking micro-grant programme aimed at supporting vulnerable women across Nigeria. Recipients receive a one-off, unconditional cash grant to meet immediate financial needs, training to develop their potential to generate future income and mobile phones. Other notable philanthropic acts by Dangote include donating cars to the Nigeria Police Force, housing units to victims of terrorism and over USD1m to fighting the spread of Ebola and COVID-19. Elsewhere in Africa, at least four wealthy individuals have promised to give a minimum of half their net worth away as philanthropic activity increases across the continent.

Bill and Melinda Gates, information technology entrepreneurs (since late 20th century)

We couldn’t complete our review of famous philanthropists without discussing Bill Gates – the co-founder of Microsoft and currently the world’s fourth richest man. You’ll recall we quoted him earlier saying, “I believe that with great wealth comes great responsibility”. He went on to specify that it is “a responsibility to give back to society and a responsibility to see that those resources are put to work in the best possible way to help those most in need”.

These are his driving sentiments behind the Bill and Melinda Gates Foundation he established with his wife in 2000. It focuses primarily on public health, education and climate change, and by 2018 the couple is reported to have pumped more than USD36bn of their own money into the foundation. Among many other causes, the Gates Foundation is renowned for providing aid to fight transmissible diseases, especially in the developing world and has supported widespread vaccine programmes. The foundation also established a water, sanitation and hygiene project to provide sustainable sanitation services in poorer countries. Another key focus is family planning, and the foundation aims to provide 120 million women and girls living in the poorest regions. Its recent grants have included some USD1.75bn to vaccine initiatives and research during the COVID-19 pandemic.

Gates apparently studied the work of Andrew Carnegie and has credited the generosity of David Rockefeller, another prominent twenty-first-century philanthropist, as a guiding influence. In 2010, Melinda Gates was inspired by the book: The Power of Half: One Family’s Decision to Stop Taking and Start Giving Back. It tells the story of the authors’ decision to sell their home so they could donate half the proceeds to charity – and led to the birth of an extraordinary commitment from some of the world’s wealthiest individuals.

But is it good for the wealthy to influence society? 

 

We have just summarised some vignettes that act as positive case studies of the impact that wealthy families have had on society. Whilst the wealthy can deliver very significant positive change, it would be remiss of us not to share some of the counter perspectives. Whilst your wealth is your own, to deploy as you wish, we believe that by explaining this opposing narrative we can help you to optimise your approach for leading in your society. You will see that even celebrated names have suffered criticism and have, occasionally, made some errors of judgement. We gently lay down some challenges to you:

Challenge 1: Will you really help the neediest?

There is an argument that philanthropy and inequality go hand in hand. Studies in the US show that less than 10% of charitable donations actually have broad public societal benefit. There is a huge skew towards support for the cultural sector – such as galleries, museums, theatres and opera houses, the funding of elite educational institutions and the propagation of religion, rather than the alleviation of poverty or reduction of socioeconomic inequity.

Even recognising this skew – and considering, specifically, the generous funding of the cultural sector – the US National Committee for Responsive Philanthropy found that 55% of grants go to organisations with budgets of greater than USD5m per annum These represent less than 2% of the 100,000 arts and culture non-profits in the country and are arguably the institutions that need the funding the least. There is criticism that – within the US – charitable donors are largely white and in the upper income brackets, supporting pursuits of interest to themselves, rather than facilitating broader change in society. In line with this, as the legendary businessman, Carlos Slim asserted, “wealth is like an orchard, you have to share the fruit not the trees”. In other words, it is up to the philanthropist which trees to choose, and the fruit is therefore determined by them!

The Gates Foundation has come in for such criticism, when London-based public health expert, Professor David McCoy, investigated the nature of their grant-giving. He found that of their 659 grants relating to global health, 560 were to high income countries. And, of the 231 grants to universities only 12 were in the global south. He surmised that whilst their mission was clear, their actions did not live up to it in practice. [2] Therefore, we urge you to think about who you are really benefitting when you support causes. If you want to support the neediest, this will take some intentionality to achieve.

Challenge 2: Will you exert undue influence, beyond your expertise or mandate?

There are many examples of wealthy individuals or corporations giving with “strings attached”, attempting to retain decision-making rights outside their experience, or stifle academic, artistic or editorial freedom. Jim Balsillie, the technology entrepreneur, decided to make a generous USD30m donation to York University in Toronto to establish a new Centre for International Governance in its Law School. This was matched by a USD30m governmental contribution. In spite of the absence of any experience in international law, Balsillie desired input into faculty hires, vetoes over faculty hires and a voice into curriculum development.

The eminent psychiatrist, Professor David Healy, was appointed Clinical Director for the University of Toronto Centre for Addiction and Mental Health. Giving a lecture ahead of starting the role, he discussed the limitations of clinical trials using Eli Lilly’s Prozac drug as an example. At the time, Prozac represented one-third of Eli Lilly’s annual revenues, and as donors providing half of the funding for the centre that Healy was about to lead, they successfully demanded the withdrawal of his offer. Healy asserted his academic freedom of speech, was later vindicated for his criticisms of Eli Lilly, thus leading to a financial settlement and his appointment as a visiting professor.

We challenge you to recognise where you genuinely and appropriately can use your influence, and to know where the boundaries require you to rely on the expertise of others.

Challenge 3: Will you apply your business experience inappropriately to very different organisational settings?

Many philanthropists have attempted to drive improvement in public school systems. Whilst this is certainly a laudable objective, an educational environment can be very different to a commercial one. The levers to achieve success will not always be the same. For example, a notable philanthropist introduced performance-related pay for teachers based on student examination results. This was a very unusual concept for teachers and led to some undesirable behaviours. A physician in a relatively poor part of the country was surprised to see that local school examination results for his area were suddenly above the national average. At the same time, he was aware of the widespread illiteracy amongst his patients, the parents of the school children producing these supposedly outstanding results. This caused him to investigate, and he was extremely surprised to find above-average results across the whole region. Now shocked, he investigated further, and found above-average examination results across the entire country – a complete statistical impossibility! In seeking an explanation, his further research uncovered false reporting of data and the likely cause of this was the inappropriate incentivisation of teachers.

We prompt you to consider the contexts that you are trying to influence and how these compare to your core professional experience – and how different levers or interventions may be required to suit the context.

Challenge 4: Will you consider if philanthropy is the best means to achieve the change you desire?

Whilst successful entrepreneurs such as the Rockefellers and Carnegie turned to become generous philanthropists, Henry Ford resolutely resisted. Instead, he believed that he could achieve greater change in society generally through the generous treatment of his workers. In 1914, he stunned fellow industrialists by introducing a wage of USD5 for an eight-hour day, when the prevailing average was USD2.50 for ten hours of work. He firmly believed that better pay and a shorter working day would lead to happier and more productive workers, and that their increased spending would positively benefit the economy. He later, in 1936, founded the Ford Foundation but – until then – the welfare of his workers was his predominant focus for leading change. Therefore, we encourage you to think broadly and strategically about how you can best achieve the objectives that you seek.

Challenge 5: Will you avoid a “messiah complex” and maintain cultural appropriateness?

The release of a new version in 2014 of the charity music track, “Do they know it’s Christmas?” – originally recorded in 1984 by Bob Geldof and Bono – infuriated many Africans. The Christian population of Nigeria alone – before considering the rest of the continent – numbered three times the number of Christians in the UK and, as a result, there were very strong feelings that they didn’t need a group of B-list music artists to tell them when Christmas was! The single was widely criticised for representing a White-Western “messiah complex” that was out of touch with modern forward-looking Africa

More recently, the space race between billionaires Richard Branson, Jeff Bezos and Elon Musk, has attracted considerable public attention, commercialising space travel by the development of their own space vehicles. This is in sharp contrast to previous eras, where the state – for example, NASA for US, ESA for Europe, Roskosmos for Russia, CNSA for China – was the primary funder and driver of space exploration. Whilst the backing of these billionaires will likely lead to positive advancements for the human race and science, some consider that their primary motivation is actually their own egos. Thus, we challenge you to think about how your actions and interventions may be perceived, and their cultural appropriateness.

Challenge 6: Are you truly philosophically aligned to the interventions you are encouraging?

Peter Thiel – the German-American billionaire entrepreneur and venture capitalist, and co-founder of PayPal – is known for his huge talents but is the product of quite a conventional academic education. He studied philosophy at Stanford University where he co-founded The Stanford Review. He was influenced deeply by those who taught him, and the peers around him, and credits them in his development. He went on to Stanford Law School to earn his Juris Doctor degree before clerking for a US Court of Appeals judge and becoming a speechwriter for the US Secretary of Education. Despite these very formative experiences, he has been accused of doublemindedness by offering to pay USD100,000 to Thiel Fellows who drop out of college – or forgo attending in the first place – to pursue entrepreneurial ventures! So, we encourage you to think about whether you are truly aligned with the interventions that you support and advocate.

We hope that you have found these challenges thought-provoking. It is by exploring these criticisms of philanthropy that we hope you can optimise your own approach, avoiding as many of them as possible.

[1] Power, Edward J. 1991. A Legacy of Learning: A History of Western Education. SUNY Series, the Philosophy of Education. Albany, N.Y: State University of New York Press, pg. 29.

[2] McCoy, D. and McGoey, L., 2011. Global health and the Gates Foundation—in perspective. In Partnerships and foundations in global health governance (pp. 143-163). Palgrave Macmillan, London.