Elite philanthropy does little to solve rising social inequalities, shows study

Erika Armanino reports on a study conducted by Newcastle University in collaboration with the University of Bath which has found that elite philanthropy does little to reduce social inequality

Erika Armanino
25th March 2021
Image: Piqsels
New research conducted by Newcastle University and the University of Bath shows that donations by the super-wealthy in the United States and United Kingdom largely benefit them and not those they claim to help.

The research paper ‘Elite philanthropy in the United States and the United Kingdom in the new age of inequalities’ conducted by Newcastle University Business School and the University of Bath School of Management, concluded that the super-wealthy have failed significantly to benefit poor countries in the developing world, contrary to popular belief.

Elite philanthropists have done little to redistribute wealth from rich to poor, helping perpetuate social inequalities rather than demolish them. The researchers showed that elite philanthropy supports elite causes and institutions, with donors receiving honours, distinctions and favourable media coverage. 

The incentives for philanthropists include the amassing of "social and cultural capital", such as receiving honours like knighthoods for their services to charity and tax advantages. 

Professor Charles Harvey, one of the authors of the research, commented: “In both the US and UK, philanthropists have their giving power boosted by being able to offset their donations against their tax bills.

"This looks, on the face of it, like a good thing to encourage giving. But it means those funds can be diverted into areas in which they have an interest or wish to exert influence or gain prestige. They, rather than governments, are effectively deciding how and where their taxes should be spent”.

The study found that the very largest philanthropic donations typically are not employed directly to fund activities or infrastructure projects, but to investigate or supplement pools of capital that generate future income streams.

These pools are held either by intermediaries controlled by donors or by the trustees of beneficiary organisations that include universities, hospitals, museums and performing arts organisations. 

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