Philanthropy

There are a lot of reasons to donate money to a cause: tax write-offs, guilt, religious beliefs, security, and compassion are just the first the come to mind. Some reasons are self-serving and others are not. Here is a case of what looks like the self-serving kind.

It appears that Bill Clinton traveled to Kazakhstan with a mining executive, met with Kazakhstan’s authoritarian president, said really nice things about him, got the mining executive a hugely profitable uranium mining contract, and then received a $131 million  donation for the Clinton Foundation.

It’s tough to know the details, Clinton has been to Kazakhstan before to discuss cooperation on HIV, so his relationship with President Nazarbayev is based on more than just politics. But the whole thing looks pretty skeezy.

Most NGOs don’t have the political muscle to do something like this, but the ethics of how far you go to please private and public donors is one that everyone faces. This is pretty clearly over the line. The Clinton Foundation should be trying to stand for something, and not just rest on the personal connections and charisma of its founder.

At the same time, I don’t know how much harm was done. All Clinton said was that he supports Kazakhstan’s bid to be president of the Organization for Security and Cooperation in Europe (OSCE). He doesn’t make that decision. As far as I know he has no direct influence on that decision. He might have given Nazarbayev some domestic credibility, but he’s got Kazakhstan so tied down I don’t think that makes much difference.

There are a lot of interesting things to hear in this Forbes.com Video interview with Robert and Lucia Duvall. They are talking about the Latin American microfinance institution Pro Mujer. As their name suggests, Pro Mujer is specifically aimed at providing loans to women entrepreneurs. They also provide business training and healthcare. Neither of those things is unique, but Pro Mujer is known for doing a particularly good job with its assistance activities.

The Duvalls are donors to Pro Mujer, and are also using Robert’s fame to get the word out about the organization. I’m interested in the way Robert described Pro Mujer as “not really a charity”. This is a common way of looking at microfinance - it isn’t charity because people have to pay you back. You are really just helping them help themselves. Why do we feel the need to differentiate? What is wrong with charity? These are central questions in the field of philanthropy, as charity is one of the principal reason for philanthropy to exist.

The questions are also extremely complex, and I’m not going to be able to do them justice in just one post, but I hope to come back to the subject over the next few months, because we don’t confront it enough.

Today I just want to understand why Robert Duvall doesn’t want us to think that Pro Mujer is a charity. To start, my assumption is that he doesn’t have a problem with us believing him to charitable.

I think he doesn’t want us to picture Pro Mujer’s clients as the recipients of charity - as beggars. The perception, I believe, is that those who receive charity are wretched, or somehow culpable in their poverty. Also, they are powerless and dependent on philanthropists for their salvation. They are not active participants in their development process.

To just give someone money under these circumstances is almost oppressive. It puts them in a position of weakness. But I don’t think it has to, because the perceptions I just wrote about are completely ridiculous. I see nothing wrong with accepting help from those who have much when the same luck of birth gave you so little. There are some traditional charities that infantilize their beneficiaries, but the good ones do not. At least, that is what I would like to believe.

I will leave the question, “Is microfinance ‘not really a charity’?” for another time.

The New York Times commented yesterday (registration required) on the problem that humanitarian NGOs such as the Red Cross are having with earmarked donations. When too many donors say that 100% of their money has to go to a specific cause, NGOs aren’t able to react to sudden issues or less-publicized crises. They also have trouble paying their non-emergency bills - like headquarters salaries. Like anyone whose every worked with an NGO, I have experienced this debate, and it isn’t just private citizens who do it. Governments can be just as bad about forbidding institutional spending.

It is understandable to want our money to go to those in need, not NGO staff. Also there some NGOs that charge unconscionable indirect costs to their projects. But some indirect costs have to exist and provide value to activities. As just one example, any analysis of a failed humanitarian effort will tell you that a key problem was lack of sufficient planning. Unfortunately, most emergencies happen fast enough that planning is seen as a luxury. Indirect costs from projects help fund positions in headquarters and field offices to monitor potential crises, allowing them to plan ahead and put a quality project on the ground.

Choosing where to give a charitable donation is a tough choice. Like choosing a stock you need a lot of information, and then just use your gut. like to use Charity Navigator to learn about NGOs before I give. It doesn’t tell the whole story on the NGO, but it is a great start.