A Philanthropist, by dictionary-definition, is a person who seeks to promote the welfare of others by the generous donation of money to good causes. It is an evolution of the term charity, which is the voluntary giving to those in need.
From eradicating hunger to eliminating inequality and everything in-between, philanthropists are driven by improving public good and have made a huge impact, year-after-year since the mid-5th century where charity first began.
The changes achieved by philanthropic initiatives over the last 12 months alone has been monumental, which might make it difficult to sympathise with an anti-philanthropist. However, they do exist and in our opinion, their argument is entirely valid.
There is a movement of next-gens against philanthropy and it is gaining pace. These are not the monsters you might be picturing or remotely opposed to change. In fact, they strive to make the greatest of change in the most strategic, efficient and effective way possible and they do so through the means of Impact Investing. Investments made in place of donations that generate both a social and financial return.
On the spectrum of making change, Philanthropy sits at one end and Impact Investments on the other. Despite their different approaches, both methods of making change have the ability to make tremendous impact across the globe but only one can make a financial return which in turn can fund more change and make more impact. Over and over again.
With the latter having the ability to make arguably greater change while financially making a return, it appears that our anti-philanthropists or more appropriately called, Impact Investors might be onto something. It is something 59% of Family Offices agree with too.
Despite being passionately pragmatic in trying to make change, the world we live in seems to work within the one metric of Philanthropy and it is preventing change. Here is a key example:
Headline: “World’s richest man fails to donate to any cause this year.”
How it could have been written: “World’s richest man continues to reinvest profits back into the business that made going green possible.”
By now you might have guessed that the man we refer to is Elon Musk. Forbes recently reported that the extraordinarily wealthy Tesla Owner donated less than 1% of his total net worth in 2020, ranking him a 1 out of 5 on their Philanthropy Index. What the index failed to mention however is the fact that he created or at least, accelerated, the global awakening to ‘go electric’.
In Europe, the volume of electric and hybrid registrations increased by 147% from 575,000 units to 1.42m, in parts of Scandinavia 8 out of 10 cars are now electric while in the UK, sales were up 185.9% year on year from 2019 to 2020. The move to electric has single-handedly contributed to impressive change in reducing our carbon footprint, one of 17 United Nations Sustainable Development Goals*. It isn’t hard to see why either when just one electric car on the road can save an average of 1.5 million grams of CO2 every single year – the equivalent of four return flights from London to Barcelona.
Musk, like many leaders today, are not anti-change. They are anti-corruption and pro-impact. Just last year Musk announced that he would give more than $6BN to the United Nations if they could transparently demonstrate in the public domain how it would contribute to ending world hunger. This is not about terms and conditions or control, it is simply about ensuring resources are used effectively to generate the best return possible both financially and socially.
An anti-philanthropist in our opinion just wants to ensure a sustainable form of giving to ensure maximum impact. While some may shame an anti-philanthropist, they are actually achieving an incredible amount of change. Elon Musk isn’t the only one to be shamed despite doing good.
During the Covid-19 pandemic, the UK’s youngest billionaire, Hugh Grosvenor who is the Duke of Westminster, donated £12.5M to the National Health Service (NHS). Despite this, he was tarnished in the British press for donating less than 0.1% of his total wealth of an estimated £10BN. This is an act that should have been celebrated but instead, he was shamed and the same is happening every day for those who chose to make change.
Electing for return along with impact over donating as a single act is not driven by selfishness but rather, motivated by excellence. Why make one change with a pool of resources when you can continue to make impact, time and again while making a return?
Impact Investing is the gift that keeps on giving. Is it time to stop shaming those who opt to paint a bigger picture? Join the conversation and download our How To Change The World Report To Find Out More.
*The 17 UN Sustainable Development Goals can be accessed at https://sdgs.un.org/goals