Good Philanthropy/ Bad Philanthropy

Not all acts of philanthropy are created equal. Even with the best of intentions, if not carefully considered, a misguided attempt at philanthropy can inadvertently lead to greater dependence on charity and a loss of economic benefit. We live in a world of juxtaposed inequity and while one-off acts of philanthropy may soothe the conscience, those with the ability to give have a responsibility to do so wisely. Before engaging in an act of philanthropy, please take the time to consider the following points:

  1. Will this stimulate the local economy? Is it productive? Think about the chain of value. Will it have a multiplier effect?  A good example of bad philanthropy is World Vision’s shipping of one hundred thousand NFL shirts to rural villages in developing countries to give away as donations. The intervention did little to stimulate the local economy and may have done more harm than good as the local economy lost potential sales revenue and the multiplier effect of those purchases.
  2. Is this the best way to utilize the resource?  Is it efficient? Is it good value for money? Does it create the maximum good? For example, transporting NFL shirts to distant recipient countries is inefficient especially when locally made alternatives are available.
  3. Does it combat the cause of the problem (i.e. poverty) or does it simply treat the symptom? In the previous example, the implied “shirtlessness” of inhabitants in the developing world was not due to an insufficient supply of shirts but because the people lack the economic opportunities to be able to purchase them. Furthermore, NFL shirts are pretty low in the list of priorities for the world’s poorest.
  4. What happens after you leave? Was the distribution of resources equitable? Will it lead to greater social discord in the long run? Are you making things more difficult for those who will try to engage with the community after you leave?