Is US-style philanthropy really the best option?

What the Government is advocating is in many ways anathema to the European social model

Last week the Government launched its campaign to encourage philanthropy. One Percent Difference seems to be a broad church, aimed at everything from the pennies of the poor to the fortunes of the elite. The first part is compatible with what we understand as charity and have always understood to be so; the latter raises fundamental issues that may not sit quite so easily with us.

Most people are familiar with the work of Atlantic Philanthropies and the Ireland Funds. Minister for the Environment Phil Hogan name-checked them at last week's launch, exhorting the leaders of large businesses to look again at their charitable giving. Frank Flannery, the businessman and Fine Gael fundraiser who chairs the forum on philanthropy, called on the Department of Finance to "look with new eyes at this area and to do all it can to stimulate growth within it". What Flannery means is tax breaks for big charitable donations and what both men have in mind is fostering US-style philanthropy.

What they are advocating is in many ways anathema to the European social model by which states such as ours redistribute wealth, with a high level of social provision for all. Central to this is the concept that corporations and individuals pay their taxes and are good citizens.

US-style philanthropy turns this notion on its head in several ways. The role of the state as arbiter of people’s needs is usurped, with the individual themselves deciding how their money is redistributed. This chimes well with contemporary US libertarian doctrine, but is not really how we think (for the time being).


Philanthropy in the US also helps square the rather awkward circle drawn when the pillars of the establishment make vast fortunes in an anti-social fashion. The 19th-century French author Honoré de Balzac is credited with the phrase “behind every great fortune there is a great crime”, and to a certain extent the massive wealth of the large handful of uber-wealthy Americans who keep the US philanthropy wheel turning has been amassed at the expense of ordinary fellow citizens. Most demonstrably, this is done by their paying as little tax as possible, while expecting their customers and employees to shoulder the burden of running the state in which they operate.

Excusing behaviour
US-style philanthropy brings with it the risk that we will move even further in the direction of excusing the behaviour of individuals and corporations because of their supposed good works. In a country that struggles hard to police white-collar criminality, that might not be such a good idea.

The subjective morality of US philanthropy has its apogee in the country’s elite university system. The top universities have huge endowments, much of which come from donations unapologetically winkled out of wealthy graduates. Much of this money is then ploughed back into full or partial scholarships for students.

The University of Notre Dame is fairly typical, with an endowment of more than €7 billion. It has a “need-blind” admission policy and provides full or partial scholarships to 50 per cent of its 8,000 undergraduates, who come from all income brackets. Its campus is dotted with spectacular buildings bearing the names of Irish-American donors.

Notre Dame is not blind to the paradox that lies at the heart of US-style philanthropy but seems to be able to reconcile it with its own very visible Christian values (it is run and owned by the Catholic Holy Cross order). Visiting the university recently with the Ernst & Young Entrepreneur of the Year programme, I had the chance to ask its president, the Rev John Jenkins, if he worried about how his donors made their money.

Debating with a man who has a doctoral degree in philosophy from Oxford is not easy. His succinct response can be summarised as that we live in a fallen world, and if you want to do good you must deal with the world as you find it, rather than how you might want it to be. Indeed, acts of philanthropy can be seen as restitution in this context.

Perhaps the most relevant point to take from his comments is that even US-style philanthropy’s biggest beneficiaries are prepared to contemplate its flaws. The read-across for Ireland is that we should look a little deeper into the brave new world envisaged by Hogan and Flannery and decide whether it really is for us. Perhaps we should just try a bit harder to make the model we have work.