
45
Economics
, - sector faces stern
challenges as it tries to weather the economic
tsunami generated by the financial crisis. Yet,
not so long ago the sector was positively ebul-
lient, as it warmed to the growing incorpora-
tion of commercial ideas and practices into the
field. Philanthrocapitalism, the most contro-
versial of these concepts, was, and is, at the
heart of this new, market influenced thrust,
with some hailing it as the one stop shop for
squaring laissez-faire economics with democ-
racy. But how has the ensuing financial cri-
sis impacted on this supposed revolutionary
model for wealth redistribution?
In their book Philanthrocapitalism, Mi-
chael Bishop and Michael Green argue enthu-
siastically in favour of the concept’s transfor-
mative power. They argue that placing the rich
at the helm of wealth redistribution, princi-
pally through a more business-like approach
to philanthropic giving, was the new and im-
proved way to reorganize economic surplus.
However, the changing realities of the world
raise serious doubts over this belief.
Where two years ago a financial crisis was
having to break a fifty to pay for your tuna-
melt bagel and Australian goat milk cappucci-
no, now the preponderance of personal wealth
in western economies has been severely di-
minished, and with it, the capacity of philan-
throcapitalism to affect deep and sustainable
change. For instance, Forbes’ rich list
noted a % reduction [IN THE] the wealth
of the world’s richest people. In other words,
the social echelon on which the financial onus
of philanthropy rests, has been dramatically
impacted by the financial crisis.
In this respect Ireland has been a notable
casualty with % of the richest people in
the country suffering a decline in their wealth.
This is without doubt an untimely blow to phil-
anthropic activity in Ireland which has been
somewhat sluggish in taking hold, even in the
“boom” years. Now, with a reported €bn
written off household wealth last year, Phi-
lanthropy Ireland has indicated that it ex-
pects new wealth individuals in Ireland to
retreat from philanthropic [UNSELFISH/BE-
NEVOLENT/BENIFICENT? REPETITIVE] en-
deavours. A similar trend can be observed in
Britain at the moment where a PWC report es-
timated that philanthropic giving is expected
to decrease by % in the coming year. On top
of this, philanthropically endowed funds, like
normal portfolios, have experienced % to
% falls in value.
All in all, this makes glum reading for Irish
charities which are facing an uneasy future
with regards to their funding. A recent survey
carried out by Trinity College’s Centre for Non
Profit Management found that % of organi-
sations questioned anticipated a decrease in
their earnings for , while a further be-
lieved .% believed that private funding and
corporate sponsorship would decrease in the
coming year. Although most organisations
are planning a major step up in fundraising
activities in the hope of [mitigating against
AVOIDING] potential losses, there can be no
doubt that services will suffer with SUAS es-
timating that financial shortfalls will place
, children currently being helped by the
organisation out of reach.
In what is sure to be an arduous year for
the sector, there seems reason to question the
durability of philanthrocapitalism as a mech-
anism for redistribution. In his book The Em-
peror’s New Clothes – the Case for Philanth-
rocapitalism Michael Edwards posited what
was to be a prescient argument against the
concept’s wholesale boasts. The problem, Ed-
wards argued, was philanthrocapitalism’s de-
pendence on the centralization of wealth, and
in turn, the inequities created by the market
economy. For Edwards, real social change is
affected not merely through business models
but through cooperation between all of soci-
ety’s stakeholders: government, non-profits
and private enterprises alike. If the financial
crisis has thought [TAUGHT]t us anything it’s
that a nation is at its most healthy when it in-
vites input from all levels of society, not just
from the privileged few at the top.
“Where two years ago a financial crisis
was having to break a fifty to pay for your
tuna-melt bagel and Australian goat milk
cappuccino, now the preponderance of
personal wealth in western economies has
been severely diminished”
Can the rich really save us?
m o r g a n a l l e n