Does Billionaire Philanthropy Work? Examining the Different Sides to the Debate

What is Billionaire Philanthropy and why it is in the News?

Most of you would have read the news item this week about Indian IT (Information Technology) Tycoon, Azim Premji of Wipro, pledging 34% of his shares in the company to his Philanthropic arm, APPI or Azim Premji Philanthropic Initiative which has already have a corpus nearly a Lakh Crore.

Indeed, with the latest contribution from Premji, the corpus has reached a staggering 1.45 Lakh Crore which is no mean sum by any stretch of imagination. Predictably, this news made headlines in most of the Indian Media outlets which fawned over him and his magnanimous spirit.

Further, some foreign media outlets were quick to draw comparisons with the American Billionaires Warren Buffet, Bill Gates, Mark Zuckerberg, and others who had pledged all their wealth to charity.

Indeed, in each of these cases, the sums that they have promised are humungous and are more than the GDP or the Gross Domestic Product of many nations in the world.

So, in the midst of this all this, one must ask whether Billionaire Philanthropy works and what such contributions mean to the larger scheme of things as far as charity and CSR or Corporate Social Responsibility is concerned.

The Arguments for Billionaire Philanthropy

To start with, the world is sorely in need of monies to help the poor and the underprivileged. This is an indisputable and undeniable fact that needs no elaboration. Further, the other hard fact is that the Governments of the world can certainly do with help from wealthy donors to supplement and complement their welfare schemes.

Third, in an age of viral news and breakneck pace of events, such charitable giving has a Multiplier Effect wherein it leads to more rich people coming forward and donating and pledging their wealth to charity.

Thus, by all accounts, Billionaire Philanthropy is a Force for Good and must be encouraged and their contributions lauded.

After all, why should we not celebrate such giving by Conscientious individuals who are literally and figuratively giving it all to charity?

Moreover, with their well oiled foundations and initiatives, Billionaires who are charitable are often more effective than governments and other entities in making good use of the money that they give to charity.

In addition, the rise of the NGOs or the Non Governmental Organizations since the 1990s has precisely been helped by the inability as well as the realization from Governments worldwide that they would necessarily have to involve and engage the Private Sector in both Commercial and Charitable activities.

Thus, as can be seen from the arguments in this section, there is a strong case for Billionaire Philanthropy and enough evidence that it works.

The Arguments against Billionaire Philanthropy

Having said that, there are also some criticisms of Billionaire Philanthropy in the sense that some accuse them of using their charitable initiatives as Tax Saving and Tax Dodging fronts.

They argue that with so many exemptions for charitable giving, especially in the West, the rich can merely transfer their wealth to their Philanthropic arms and live off the Tax Breaks that they get in the process.

Moreover, many activists often point to the meagre budgets for CSR or Corporate Social Responsibility in the firms of such people which are a clear case of Double Standards. In addition, they also point to the Photo Ops mode of Charity wherein celebrities and the rich (often interchangeable) indulge in Philanthropy more for the publicity than anything else.

In other criticisms that are more procedural and process oriented, activists claim that the Foundations and Philanthropic arms do not address the real issue and instead, fund what are known as “Acceptable Causes” or in other words, causes such as Education and Health that are fashionable and not as controversial as say, Transgender Rights and other such causes.

How the Foundations of the Rich Can Be Made More Effective

On the other hand, it also needs to be mentioned that Billionaire Philanthropy can be made to work provided some structural and systemic aspects are addressed. For instance, having their Foundations work like their firms, though a Double Edged Sword, can ensure Accountability and Transparency, which are much needed attributes as far as NGOs and Social Causes are concerned.

Moreover, Billionaire contributions that are large can actualize Economies of Scale that other NGOs and Charities can never achieve.

In addition, collaborating with Governmental and other Entities can create Synergies which when coupled with Scale can make the whole process Efficient.

Another key way in which such charity can make a difference is the Visibility Factor wherein such giving by virtue of being media friendly can focus attention on Social Causes which with some persuasion can be made more wider in scope and inclusive in orientation.

Indeed, the Foundations of the Rich if they can channelize their monies and energies can prove to more or if not, as effective as the NGOs and the Governments as well.

Power to Them

Last but not the least, more often than not, it is the case that the Billionaires themselves get personally involved in their Foundations and this means that they bring to the table their Vision, Mission, and their Wide Experience which is certainly a Huge Plus.

With the ever increasing problems of the world, any effort is welcome and as we have argued here, Billionaire Giving when done with purpose and missionary zeal can help and heal the world.

To conclude, more power to such individuals who are driving change, both macro and micro, and hopefully to a Better World for All.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


Corporate Social Responsibility