Should the Super-Rich Donate Money to Save the World?

Elon Musk responded to critiques from the UN on Twitter, which calls into question his and other philanthropists’ intentions behind donating.

(Cover Photo: Forbes)

On the eve of the UN climate summit COP26, the United Nations World Food Programme (WFP) singled out Elon Musk, CEO of Tesla, saying that “only 2% of his wealth can solve the problem of global hunger”. Musk responded on Twitter, stating that he would sell his stock and donate money “as soon as the United Nations provides an open and transparent accounting of what the donation will actually be used for.” Mr Musk is not a big philanthropist, but he asks bluntly and ironically, whether the rich “giving money” has any direct impactful effect.

Now, in the wake of COVID-19, with the global economy in recession and the wealth gap widening, more people are calling on individuals like Musk to donate money to address society’s urgent needs. It has long been the norm for the super-rich to use philanthropy by means of charities rather than give money directly. However, these philanthropists primarily service themselves by running these charities as private businesses.

Over the past few years, many wealthy individuals from Amazon CEO Jeff Bezos to Facebook CEO Mark Zuckerburg have enthusiastically donated money to various institutions to fund research and supply allocation. However, the act of donating money is actually an atypical norm in the context of COVID-19. For most of the rich, “it is better to teach a man to fish than to give him a fish”, and many competitive, self-sustaining capitalists take this principle to heart, which affects their long-term philanthropic approach.

Looking back in recent years, the super-rich are now responding to the demands of ordinary society for redistribution of wealth by not simply donating money. Instead of directly donating to local charitable organizations, they use a variety of methods, such as management models, operation methods, and fund transfers, in combination with their own efficient business thinking and methods, to attain the most gain from their donation.

Bill Gates, the founder of Microsoft, is considered one of the most influential philanthropists of recent times. He stressed the need to apply the business community management methods to charity work and pay attention to the organic return of philanthropy to achieve the most efficient use of the funds needed to improve society. Gates’s main philanthropic channel, the Bill & Melinda Gates Foundation, addresses problems like public health, disease control, poverty, human trafficking and other issues. Based in Seattle, it is the world’s largest private charitable foundation with $50 billion under management.

However, this philanthropy is another way of managing private companies with free use of funds, and can even utilize its own influence to make impact in public decision-making, in exchange for self-interested political and social capital benefits. Such “invisible power” may be more valuable to capitalists than a mere charitable donation.

The Bill and Melinda Gates Foundation, for example, was criticized early on by international organizations such as the World Health Organization (WHO) and various watchdogs for having too much influence in research on diseases such as malaria. Because of the foundation’s strong financial resources, many researchers and scientists will protect their research results due to the foundation’s financial incentive system, which is detrimental to promoting research diversity and distorts the growth space of global medical development.

The same principle can be applied to issues as diverse as education, environmental protection, and equal rights. If the foundation is financially powerful enough to influence research and even policy and legislation in its area of sponsorship, it gains the ultimate power to decide the most profitable time to benefit society.

What Musk conveys in his tweet is that the global famine crisis proposed by the United Nations cannot be solved by mere donations to buy food, because famine is never caused by insufficient food, but by the uneven distribution of food caused by war, official corruption and other human factors, which eventually leads to widespread famine. For Musk, investing in popular education and rewarding technological innovation is a long-term solution to poverty crises such as famine. The official website of Musk’s foundation, which focuses on funding space exploration, science and engineering education, is only a few hundred words short and does not provide information on assets under management, sponsors or contact information.

It also explains why in recent years tech moguls such as Bill Gates, Jeff Bezos and Mark Zuckerberg, who have reaped the fruits of the 21st century Internet boom, have preferred to invest in private foundations with which they are connected to advance research projects rather than donating directly. For these individuals, philanthropy is the best of both worlds, enabling them to fulfill their social responsibilities while reinventing themselves as an efficient and profitable business. All sectors of society should still continue to emphasize compliance and accountability, acting as a sober watchdog preventing the super-rich from becoming back-room manipulators with the power to set social issues.

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