ten - Social justice, liberalism and philanthropy: the tensions and limitations of British foundations

Summary

Introduction

This chapter examines the nature of British social justice philanthropy, which can be described as a loose social movement of charitable and community foundations and grantmakers that seeks social change by tackling the root causes of social inequalities and problems. In exploring how charitable and community foundations understand the values and beliefs that shape their grant-making portfolios, the aim is to offer a critical insight into the limitations of foundations and grantmakers to achieve social change, and to examine the normative dimensions of their activities. The chapter will argue that financialised foundations are inherently problematic, partly because their income is unearned and undeserving.

Within philanthropy studies, we make an intervention in two debates. The first debate is whether foundations are a public good. Some scholars (such as Rabinowitz, 1990; Craig, 2005; Leat, 2007; Cohen, 2008) argue that foundations are a force for public good, supporting a thriving civil society, giving voice to disadvantaged and vulnerable groups, upholding basic liberties, tackling discrimination and ensuring fair opportunities. In addition, they provide goods that the state and the market cannot or will not offer. But critics (including Prewitt et al, 2004; Illingworth et al, 2011) argue that foundations and grantmakers face serious questions of legitimacy and accountability, namely, what is the legitimacy of private money to shape public policy, and what regulatory mechanisms ensure that foundations’ activities benefit the public? They also suggest that the net impact of foundations can be negative, taking into account the effects of the loss of tax revenues to subsidise charities and the harm arising from the speculative and non-ethical nature of their endowment. We will suggest that foundations are defensive on questions of public interests, legitimacy and accountability, drawing attention to how legal guidelines and regulatory controls provide public safeguards.

The second debate involves scholars in critical philanthropy (Raddon, 2008; Eikenberry, 2009; Nickel and Eikenberry, 2009), who criticise forms of philanthropy that affirm existing power relations and structures, arguing instead for a transformative model of philanthropy (see Edwards in Chapter 2). In addition to traditional philanthropy, ‘new’ or entrepreneurial philanthropy, which entrenches markets and business as a way to address global problems, has also faced criticisms.