When Mark Zuckerberg, the C.E.O. of Facebook, announced that he would be donating ninety-nine per cent of his Facebook stock to a new nonprofit organization, he got his share of positive headlines. But the move was also dismissed as a tax-avoidance scheme, a public-relations gambit, a way to boost Facebook’s profits under the guise of doing good, and the latest expression of the “white savior industrial complex.” The economist Thomas Piketty, the author of “Capital,” said simply that the donation “looks like a big joke.”
The backlash is no surprise. The sheer size of Zuckerberg’s grant, currently valued at forty-five billion dollars, shows just how concentrated wealth has become, and the earnest rhetoric of his mission statement, couched as a public letter to his baby daughter, reinforced a sense of Silicon Valley’s overweening confidence in its ability to fix the world. Hostility toward philanthropy is nothing new; when John D. Rockefeller established his eponymous foundation, he was attacked for reasserting “the old reign of aristocracy under the new names of philanthropy and science.” And Zuckerberg’s move comes at a time of anxiety about the rise of so-called philanthrocapitalism. Foundations have great influence over social policy but are independent of democratic control. Why should unelected billionaires get to exercise their neo-missionary impulses across the globe?
In an ideal world, big foundations might be superfluous. But in the real world they are vital, because they are adept at targeting problems that both the private sector and the government often neglect. The classic mission of nonprofits is investing in what economists call public goods—things that have benefits for everyone, even people who haven’t paid for them. Public health is a prime example: we would all benefit from the eradication of malaria and tuberculosis (diseases that Bill Gates’s foundation has spent billions fighting). But, since the benefits of public goods are widely enjoyed, it’s hard to get anyone in particular to foot the bill.
Corporations almost invariably underinvest in public goods, because they can capture only a small fraction of the rewards. That’s especially evident when the main beneficiaries are poor: out of more than fifteen hundred drugs that were approved for sale between 1975 and 2004, just twenty-one targeted tropical diseases or tuberculosis. Governments do better at providing public goods (defense, say, or education), but private agendas often derail the public interest, and governments are far less effective at tackling global problems. As the economist William Nordhaus has written, there is “no mechanism by which global citizens can make binding collective decisions.” Coöperation is always fragile and vulnerable to free riding. Think of how hard it’s been for countries to reach agreement on reducing carbon emissions.
Projects like eradicating malaria or providing universal Internet access (one of Zuckerberg’s ambitions) also require investment that may not produce results for decades to come. Politicians have to worry about being reëlected every few years. And global problems are inherently distant from the life of the average voter. The U.S. government spends less on aid to the world’s poor every year than Americans spend on candy. Even when the U.S. clearly bears much responsibility for a global problem, like climate change, it’s hard to get Congress to pay up.
Philanthropies, by contrast, have far-reaching time horizons and almost no one they have to please. This can lead them to pour money into controversial causes, as Zuckerberg has with education reform. But it also enables them to make big bets on global public goods. There is a long history of this: the Rockefeller Foundation funded the research that produced a vaccine for yellow fever. The Gates Foundation, since its founding, in 2000, has put billions of dollars into global health programs, and now spends more on health issues than the W.H.O.
It’s been suggested that if we just taxed billionaires more there’d be more money for promoting social projects globally. But it’s far likelier that those projects would just go underfunded. Though in the past decade the U.S. sharply increased spending on fighting infectious diseases like malaria, it did so only after the Gates Foundation put them back on the global public-health agenda. All public-goods spending is precarious, especially foreign aid, and never more so than with Republicans in charge of Congress. In inflation-adjusted terms, the budget for the National Institutes of Health is lower now than it was a decade ago, and late last year Senator Lindsey Graham warned that budget pressures could put anti-malaria funding “at risk.”
Yet philanthropic investment in global projects continues to increase. Anne Petersen, the president of the Global Philanthropy Alliance, told me, “American philanthropy used to be all about giving locally. But there’s been a dramatic trend toward international giving, and that’s only going to continue.” It’s reasonable to lament the fact that a small number of billionaires have so much power over which problems get dealt with and which do not. But they have that power precisely because they are spending so much of their money to solve global problems. We, as a country, are not. ♦
