THOMAS BOLLYKY: Welcome everyone. My name is Tom Bollyky, and I'm the senior fellow for global health, economics, and development at the Council on Foreign Relations. I am extremely pleased to welcome you to this roundtable on "Good Philanthropy, Bad Philanthropy, and Their Role in International Development."
As many of you who have been paying attention may know, 2013 has been a banner year for critiques on aid and philanthropy. There was the Peter Buffett op-ed that received tremendous attention in the New York Times on the charitable-industrial complex, arguing that much of the recent surge in philanthropy could effectively be termed "philanthro-colonialism."
For those of you who follow the philanthropy journals, there's been an ongoing debate about the Hewlett Foundation and its model of strategic philanthropy and whether that approach short changes direct services providers.
On the aid side, Angus Deaton, a well-regarded development economist, has just published a book entitled "Great Escape," which surprised many by being largely negative about the role that aid has played in increasing the wealth and health of societies over the past several decades.
And of course, two of the most high profile aid initiatives out there—Dr. Jeffrey Sachs's Millennium Villages and the U.S. aid interventions in post-earthquake Haiti—seem to be the subjects of scathing criticisms on an almost weekly basis.
The issues addressed in these critiques differ. Some of them in my view are fairer than others. That said, they all get at these questions about the current model of philanthropy and aid, whether the goals are the right ones, and whether we can be effective in reaching those goals.
So I am very pleased today to have an individual who has written widely and thought deeply about these issues around aid and particularly in philanthropy, Professor Peter Singer. Peter Singer is the Ira W. DeCamp professor of bioethics at the University Center of Human Values at Princeton University.
The New Yorker has called him the most important philosopher in the world and Time magazine has previously called Peter one of the planet's 100 most influential people. Peter's book Animal Liberation laid the foundation for the animal rights movement. He has spent decades writing on the moral duty to give aid to the world's poorest and ways of doing that better. He synthesized many of these writings in his 2009 book, The Life You Can Save. For those of you who have not read it, it is a thoughtful, provocative, and eminently readable book.
This year, Peter published an op-ed in the New York Times entitled "Good Charity, Bad Charity," in which he argued that all philanthropy isn't equivalent, that there is an objective standard by which to determine the relative worthy of different forms of philanthropy. Peter called for more support of a movement he describes as "effective altruism."
I'm pleased to host Peter at the Council today. You're all in for a treat. This meeting is on the record and for attribution, so participants are welcome to use and cite the information at this meeting and attribute it to the speakers.
PETER SINGER: Thank you very much, Tom. It's a pleasure to be here and to have the opportunity to speak on this important topic.
Tom began by saying it's been a year in which there's been a lot of criticism of philanthropy, but I think it's also been an exciting year in which there's been a lot more focus on how philanthropy can be effective. There's been development in organizations that are trying to encourage more people to be both altruistic and effective with their altruism. So that's the movement that is coming to be known as "effective altruism," which I think is attracting more and more people and is also getting more and more media.
So I'll say a little bit about that in a moment, but let me start with this question of good philanthropy and bad philanthropy, which is part of the title of today's event. And that does draw on the New York Times op-ed that I published back in August 2013. And I think that's raising some interesting discussions.
In a way, the trigger for that was looking around some of the discussions about philanthropy and where should you give it. I looked at the website of Rockefeller Philanthropy Advisors, one of the big players in the field. They say on their website that $3 billion has moved through their office or been advised from those donations.
But when I looked at what kind of advice they're giving about where to donate to, I came across the statement that there is no objective answer to the question as to what cause you should give to. In fact, the statement was, "It's obvious that there's no objective answer."
As a philosopher interested in questions about objectivity in ethics and values, I'd have to say it's certainly not obvious that there's no objective answer. It may be a tenable position that there's no objective answer in the end, but that would need to be argued and defended. And so in this short Times op-ed I took what seemed to be to be cases at opposite ends of the spectrum of effectively using money to make the world a better place.
At one extreme, I took philanthropy that helps to build a new wing of an art museum. And at the other extreme, I took philanthropy given to an organization that prevents trachoma, a disease that is the most common cause of preventable blindness in the world. It's caused by an infectious microorganism that gets into the eyes of children in developing countries. It takes a long time to develop and have an effect, but after some years, the sight of the infected person starts to get dim, and after maybe ten to fifteen years of getting slowly dimmer, it leads to complete blindness, which given the age of the person at that time in the developing world, might mean another ten to fifteen years of blindness.
There have been a number of studies on the cost of preventing trachoma. And they all come out pretty low. In the Times article, I suggested a figure of $100 per case of blindness prevented, which is actually higher than most of the estimates that you find in the literature, but it made the math pretty easy. And then I compare the good that you might get out of that with the good that you get from enhancing the museum visits of a large number of visitors.
Of course you would get very large numbers of visits, but for the cost of $100, you're only going to make a small fraction of the contribution towards the new wing. So you can juggle the figures whichever way you like, but let's say you're going to enhance the visits to the museum of 100 visitors at the cost of preventing one person becoming blind. So then how do we compare that? How do we compare the enhanced visits by 100 people to one person going blind?
The method I suggested was imagine that it's a kind of a lottery that one in every 100 persons who goes to the museum and sees the new wing is going to be struck blind. We philosophers can invent little devices to do this. We usually use evil demons who are going to do it, but it doesn't matter. It's a thought experiment.
So then you ask yourself: "I enjoy art and it would be nice if my local museum had a new wing with more paintings that I could look at. Would I go and see it if I knew that there was a one in 100 chance that as result I would be blind for 15 years?" And I know that when I asked myself that question, the answer is, I would certainly not go. And you could ramp up the odds. So I wouldn't go for a one in 1,000 chance of going blind either. I think I'd have to get into the millions before I'd really think about this seriously. If this is the case, then we do have something like an objective method of comparing the goods or if you like the harm of going blind with the good of building a new wing for an art museum.
And I think the numbers come out, as I suggested, clearly saying we'll do more good if we contribute to the organizations that are effectively preventing trachoma.
Now, somebody accused me of setting up a straw man kind of example. I don't think it's a straw man because we really make this choice; that is, a lot of people really give many millions of dollars to art museums, and some people – not enough – give them to organizations preventing trachoma or doing similar things in developing countries. So it's a real example, but it's an easy example, I think. But if it is an easy example, then I've made my point that it's at least possible to get an objective handle on these things.
I agree that there are much more difficult examples, if someone were to say, "Well, I'm very concerned about climate change. I think I should contribute to mitigating climate change, rather than preventing blindness." That's much more difficult and it depends a lot on the facts about your chances of actually making an impact on climate change.
So there are a variety of different choices. Education might be another one. Since I'm at Princeton people say to me, "What about giving to Princeton?" Princeton is pretty wealthy as it is, and I don't know that the amounts that I could give would make much difference. But perhaps if you targeted them to helping needy scholars from developing countries that would come to Princeton and learn a lot of things and go back to their countries, you could make a case where it would get a little more difficult.
But the upshot of what I'm trying to say is that I think we ought to be doing more. I think we should be contributing more than we are. I also think that we should be making sure that what we are doing is more effective. And I do see a very positive movement to assess effectiveness.
One sign of that is the organization GiveWell, which was set up six years ago to try to do a more rigorous job of assessing charities for effectiveness. And GiveWell, after initially starting off looking at charities that work domestically in the United States, as well as those that work in developing countries, eventually decided it could save time by not looking at the domestic ones. Its rationale was that the scale of difference, the scale of how much more good we can do in developing countries, given the greater purchasing power that we have, given how little people in developing countries have, and how easy it is for us to make a significant marginal difference. They just didn't think there were any charities operating domestically that could really compete for value per dollar gained with charities operating in developing countries.
MR. BOLLYKY: Great. In your book, you talk a lot about both philanthropy and aid and effectiveness in both contexts. I don't want to assume that the arguments in your op-ed were also intended to extend to both philanthropy and aid. Do you see the choices that face a policymaker in deciding how and whether to distribute aid through a similar framework as you view the ways that individuals make decisions about philanthropy?
MR. SINGER: I do see them as similar. I think that where government aid is targeted at helping people in developing countries and helping the poor, then I see it as similar. Of course, a lot of government aid is targeted at geopolitical interests of the United States, and then it's not philanthropy in that sense. But there's been obviously discussion about that within the government aid community. And I do think that that's an important part of U.S. aid. I don't think that there's enough of it.
And part of the problem with that, of course, is the grotesque misconception that Americans seem to have about how much foreign aid the government gives. I've quoted in "The Life You Can Save" polls that say when you ask Americans how much of the federal budget goes on foreign aid. They've been saying ten to fifteen percent, which is a huge exaggeration. It's about one percent. But the most recent poll that I just saw come out in the Washington Post says twenty-eight percent is the median answer that they give, which is more than Medicare or Social Security or defense. It's pretty incredible. It's really hard to understand why it hasn't been possible to get the message across to Americans that foreign aid is a tiny percentage of government spending.
MR. BOLLYKY: The positive spin I saw on that recent poll was the thought that, "Fantastic, we could raise aid because people already think we're spending more."
MR. SINGER: Maybe we asked them, what would you think about cutting foreign aid to only five percent of the government? (Laughter).
MR. BOLLYKY: It is all about the framing! The dominant critique about your book from the aid community when it was released was around effectiveness. In the book, you compare the choices around philanthropy to a hypothetical decision of whether to save a child who is drowning in the lake. The critique from some aid scholars was that this example only works provided you know how to swim.
MR. SINGER: That was a shallow pun in the example, I see. You don't have to swim. It's too deep for the toddler, but not too deep for you.
MR. BOLLYKY: I think the book actually responds well to that effectiveness critique, but I was wondering what you thought about a related set of arguments that aid or philanthropy in some cases might do more harm than good. There are two arguments.
One is Peter Buffett's argument that the charitable-industrial complex does harm by doing just enough to prevent the boiling over of an unjust system. This prevents fundamental change by dealing with only the symptoms of poverty at the margin and keeps us from addressing the real, fundamental inequities of our society.
The other argument on the aid side, that Deaton and others have recently argued, is that aid in some cases distorts incentives, corrupts politicians, and keeps them from assuming the roles and responsibilities that a government should have, whether that's taxation or providing essential health services.
In both arguments, the question is not simply whether putting money into this effort may not achieve the benefits we want. It may actually undermine the ability to deal with the root causes that are causing and perpetuating poverty. What are your thoughts on those arguments?
MR. SINGER: I think the first argument of preventing the boiling over that would change the system is an extremely risky argument. Those of you who know your history will remember that it was the argument that the Communist International used against cooperation with the Social Democrat parties of Europe in the 1930s because they said these Social Democratic reforms will just prevent the revolution taking place. The result of that division between the Social Democrats and the communists was that in Germany, specifically the Nazis, were able to take control. Not that they ever had more members of parliament than the left, including the Social Democrats and the communists, but because they were divided, they were able to do that.
So obviously, that revolution never happened and if it had happened, we may wonder how good it would have been. So I think it would have been much better to go for the kinds of reforms that have happened subsequently in democratic societies.
And here too, you can't really just say there's going to be a revolutionary change and aid is stopping it and then that change is something that's going to make things better. That's generally not the way things have worked.
The argument that you mentioned Angus Deaton and some others have put forward, I think that has to be taken more seriously. And you do have to be careful what it is that you're doing – that you're not simply allowing an incompetent or corrupt government to get out of what it should be doing. But I think there are cases where the government would not do that. And it's not necessarily the worst governments. One of the charities that I've looked at is an organization called Nyaya Health, which has set up a hospital in one of the impoverished, remote, neglected regions of Nepal.
And so the argument there might be, if they hadn't done that, then the government would have. But the government hadn't done it for many years until they went there quite recently. And in fact, now the government is starting to put more money into that region because it's seeing that there is a functioning hospital with Western aid. And that's actually using a lot of Internet technology that comes out of the northeastern United States. And they're actually able to provide a high-level of care, and the government's seeing that, and it's starting to put money into that.
So I think it's an argument that you need to take seriously. You need to watch the effect of what you're doing. You need to be sensitive to the kind of government that is operating in the country. But I don't think at all that it's a blanket reason for not giving development assistance.
MR. BOLLYKY: Right. There are basically three forms of aid that we know can work: health interventions like the vaccination programs that you mentioned; peacekeeping; and disaster relief.
There is good evidence that these three forms of aid can have a positive effect. What there isn't such great evidence of is that aid can reduce poverty or develop the capacities of other governments. Does your argument on effective altruism suggest that, given this evidence, we should funnel our aid into what we already know that works – health, peacekeeping, disaster relief – as opposed to experimenting in the other areas? If we experiment or devote aid to these other programs, are we by definition depriving resources that could be spent in what we know can work. What might you think about that?
MR. SINGER: No, I don't accept that view. I think that it's worth trying other areas and evaluating what's happening. You mentioned in your introduction the criticism of Dr. Sachs in the Millennium Villages project, which I talk about rather positively in the 2009 book. But I am disappointed that it was not set up with a solid baseline for evaluation; that is, the villages were not matched with other villages in the area or randomly selected villages that would have provided a baseline for seeing whether the interventions that have happened in these villages really does make a critical difference or whether some of the improvements that have been noted were just general improvements that have happened in the areas where the villages took place. So I think we need more of that. And I think we're starting to get more of that as well. It's not only health care.
Before I mentioned GiveWell and their assessment of organizations. They are now recommending an organization called GiveDirectly, which is giving cash grants to impoverished rural families in Kenya. And that's still somewhat experimental, I think. It's only been going a few years. But it's an interesting idea, and it's exactly consonant with the idea of diminishing marginal value of income at the margin. So these families are selected to get $1,000. They get it in three separate tranches, but that's the end of it. They're not going to become dependent because they're told they're never going to get anymore. There are other families that will need it.
And then there's follow-up to see what they do with the money. The most common single large item of expenditure is that they buy a metal or iron roof because their huts are thatched, and it leaks when it rains. And also they have to keep replacing the thatching, which costs them about $40 a year, which is significant when you're earning something like $500 a year.
So I think that's exactly what we should be doing. It's a very transparent organization, and we should be trying things like this, seeing whether they work. If they do work on a pilot model, we need to try to scale them up.
MR. BOLLYKY: Great. Questions from the audience? Kaitlin.
Q: I'm Kaitlin Christenson, and I'm with the Global Health Technologies Coalition at PATH. I know there's some research coming out of Kenya and other east African countries that shows that where there's a higher proportion of NGOs, presumably supported by Western aid, citizens actually have a more positive perception about the government. Whether or not the NGOs are actually providing services, but it affects the perception that citizens have about the job that the government is doing.
At the same time, there's this juxtaposition in a country like Kenya which is trying to limit the amount of foreign aid. For example, I believe that new legislation was introduced just in the last month to try and limit the amount of foreign aid. I'm just curious if you can comment on that really unique tension of the perception of government and the backdrop of foreign assistance.
MR. SINGER: I can't say very much about that because I'm actually not familiar with the research that you mentioned that's showing a more positive attitude. I'd really like to see that. And if you'd like to shoot me an email at email@example.com, I'd be happy to take a look at it.
But that's an interesting outcome and it does count against some of the ideas that aid leads government being more removed from the people, not doing their job, or even becoming more corrupt.
On the idea of limiting aid – I think one thing many aid critics have said is that because there were so many aid agencies doing a lot of projects, it's actually a significant administrative burden, so I can see that as a possible reason why governments might want to limit it. They may also be concerned that aid agencies are employing locals, which is good, but then they employ the skilled locals that then are unavailable to work for the government. That could be another problem.
So there definitely are a lot of issues that need to be assessed in each case. And so I'm not surprised that there's the kind of tension you mentioned, but I can't say more about which side of it might be resolved.
MR. BOLLYKY: Great. John.
Q: Thank you. I'm John Lange from the UN Foundation. I wonder if you see an ethical dimension among the choices that donors make for their health assistance. I focus a lot on global health. To me, a prime case is the effort to eradicate polio. In 1988 when the World Health Assembly declared the goal of eradicating polio, there were 350,000 cases a year. Last year, there were 223. But those countries that have it, especially Nigeria, Pakistan, and Afghanistan, are very difficult to work in. It's now spread to the Horn of Africa and Syria because it hasn't been eradicated. And the program costs $1 billion a year. It's Bill Gates' highest priority.
With $1 billion a year you can save a lot of current lives through anti-retroviral therapy for AIDS patients and others. But there's this global good that has the long-term impact of eradication which means its forever. So is there an ethical dimension in that choice to put the money toward that eradication effort? Would it matter if it cost $100 million a year or $5 billion, even though right now it's $1 billion? Is there an ethical dimension to those kinds of choices that donors have to make?
MR. SINGER: Thank you, that's a very good question. I think there definitely is an ethical dimension to that choice. And my view is that we should not discount the future. Economists often do discount the future in their calculations. Sometimes they say just because of the return we can get on capital. But sometimes they actually think that because people tend to care less about the distant future, somehow that should figure in government choices or reflect that. I don't agree with the second reason for discounting.
So if indeed we can eradicate a disease like polio and if that's going to mean that over the long-term there will be large numbers of people who won't get polio, then that seems like a worthwhile thing to do. How worthwhile it is and, as you say, whether you would do it for $100 million or $1 billion or $5 billion is going to depend on the estimates that you realistically can eradicate it. If you think, "We'll spend $1 billion this year and next year and then it will be gone and we won't have any more ever, whereas if we don't spend those $2 billion over the next couple of years, we will be spending amounts that will over a longer period add up to much more," then I think there's an unanswerable case for saying we should spend that $2 billion over the next two years.
But if it turns out to be something that can't be done, then it would be better to use the money to save more lives now rather than an attempt which may not succeed in doing that forever.
MR. BOLLYKY: Krishanti.
Q: Hi, Krishanti Vignarajah from the U.S. State Department, and I'm adjunct faculty at Georgetown. I just want to pick up on your comment about cash transfers. Given that there's an interesting debate about the effectiveness of conditional versus unconditional cash transfers, I was curious if you believe that the decision-making of what vehicle we should be channeling funding through is exclusively based on what's more effective in terms of achieving outcomes or if there is an ethical dimension in terms of fostering free will or good decision-making or a sort of more paternalistic approach.
MR. SINGER: No, I think in this area anyway, it is effectiveness. I think that it's ethically acceptable to make conditional transfers if they turn out to be more effective. And after all, I would say that because people do get a choice, whether to accept them or not. I know people often say, "They're poor; what can they do?" You're holding out some money, so they'll accept any conditions you put on them.
But I don't think that's actually right. I think there are cases where people, even though they're poor, do turn away benefits that come with strings attached that they don't want. So I think it does depend on whether it turns out to produce better results. And as you said, there's been quite a lot of conditional cash transfers and quite a lot of research about that, many of them as part of government programs, but some not. And GiveDirectly is doing it as an unconditional transfer and then following up. And I think the evidence really isn't in yet on whether that will prove to be more effective. But we'll see in a few years.
Q: Teddy Nemeroff, I'm with the law firm of Steptoe & Johnson, and I was your student twelve years ago. (Laughter.)
MR. SINGER: Welcome back.
Q: Thank you. I was wondering what are your thoughts on what the ethical way to address incomplete information is? That's sort of my reaction to all of this is that, yes, I see where you're going, but incomplete information seems like to me as an attorney practicing every day, that it's the hardest problem. And I'd be interested in hearing what you think the ethical approach to that is. Is it a balanced portfolio? Is it paying for research? What is it?
MR. SINGER: Sometimes it will be justified to do more research to get more information. I think I've talked about evaluation and randomized controlled trials, and so on, which I think are the gold standard when you can do them. But they are expensive. I can remember talking to Oxfam in Boston at a meeting when they were talking to the people at the MIT Poverty Action Lab about doing randomized studies of some of their Savings for Change program. And the problem was that it was going to nearly double the cost of the program because they would need to do a lot of investigation, and that was such a large part of the cost.
So they decided that they couldn't do it unless there was some other money forthcoming. I think then eventually they got a separate grant from the Gates Foundation, so they could do it. And the results are now in and on the whole positive. So I think it is worth doing that because otherwise you just might be spending money that isn't doing good, and you don't really know about it.
But sometimes you can't do that. There are programs where you can't run controlled trials because it's a unique situation. So then I think you have to get the best evidence that you can. You have to try to form probability estimates. And at least in theory, the answer is you do what has the highest expected value; that is, the outcome divided by the probability of your achieving that.
So we're always acting on the basis of incomplete knowledge, I think. And we try to get more of the knowledge where we can, and where we can't we just have to make our best guesses and try to follow up so that we do know more.
MR. BOLLYKY: Great. I have Jen, Robert, Libbie, then Job.
Q: Jen Piercy with Enclude, formerly Shorebank International. I have a question about the growing use of philanthropic capital to try to induce private sector investment. I guess I could associate that as well; a great deal of financing that went into early microfinance on a grant basis that subsequently built up those organizations and some of them ultimately had an IPO, so it benefited very significantly those who were the later financial investors. I wonder if you have a thought about that whole range because it seems like it's a continuum of growing association between philanthropy and investment.
MR. SINGER: Yes, it is. And I think it's a very positive thing when it works well and it often does, as you say. That's one example. I think the development of the use of mobile phones for banking, for example, is something that has been hugely important in many areas where people don't have access to banking. That's been a serious problem. And that's often been that kind of partnership as well.
So I think that nonprofits and philanthropic organizations ought to be ready to embrace investment, where they can do it on terms that are clearly going to help them to achieve their objectives. I think that's the important thing. Is this going to achieve the objectives we have of whatever they might be – helping the poorest, developing entrepreneurial activities in that area, providing credit, and so on? Yes, I think all of that is something that people shouldn't shy away from just because the dirty word "profit" is associated with it.
MR. BOLLYKY: Robert.
Q: Bob Thompson, Johns Hopkins SAIS. A number of critics of foreign aid argue that we have countries in Africa with massive natural wealth in minerals and that we really should not be giving foreign aid. They've demonstrated they had the capacity to solve a lot of their problems, and they squandered that mineral wealth. Can you make an arguable case for providing foreign aid in such an environment when you've got countries close by with no mineral wealth and rampant poverty and ill health?
MR. SINGER: I suppose if you really have comparable cases. Let's say you have two countries, one of which has no mineral wealth and one of which has a lot. You might think that other things being equal, you should help the ones with no mineral wealth. But the problem is always when you talk about they did this, who is the "they?" Because clearly if the government is squandering its wealth, then you don't want to give money to the government. They've got revenue from the oil revenue or whatever mineral revenues. But if none of that money is going to impoverished people in that country in rural areas, then it's also not right to penalize them for the bad actions of the government.
Again, it goes back to what I said before – the government is not likely to change because you don't give them a way. If there's some way you can put some pressure on them, so that they do become better at distributing or using their wealth, then that's what you should do. But I'm not convinced that just staying out and saying, "You've got lots of revenue, so we're not going to help you," is the right thing to do if that just condemns the people who are impoverished to continuing to be impoverished and to suffer in the ways that they are.
MR. BOLLYKY: Great. Libbie.
Q: I'm Elizabeth Prescott, U.S. State Department, also at Georgetown, but different parts. So originally, I was interested in the measurement question that came up earlier, and I'd be interested in your thoughts on if we're measuring things, but measuring the wrong thing and making decisions based on that, as we often do in government, whether or not that is more harmful than not doing it at all. And how we think about those in government as we're increasingly trying to use measurements, but not always able to find positive or useful things to use. And whether or not big data might play a role in helping to look at non-obvious measurements.
And then, any thoughts you have on super-empowered individuals? We talk a lot about philanthropy as if the individuals giving to an organization, but we're seeing as governments around the world are not able to continue to fund development, individuals step forward and they choose themselves. What is the responsibility of governments in trying to shape that or make sure that it's not doing more harm and if we even have any tools to do that?
MR. SINGER: So in terms of what we measure, that's a good question. And of course, we have traditionally measured GDP or something of that sort. And then people realized that that was not necessarily the best thing to measure. And so where you have the Human Development Index, which includes things like health and education and so on. And now there's an effort – something that Jeffrey Sachs is doing – to actually measure happiness.
MR. BOLLYKY: Bhutan.
MR. SINGER: Yes, Bhutan is doing this, exactly. Bhutan has this gross national happiness kind of measure. And although I don't think any other country's gone quite so far, we have had a number of countries that have set up commissions to look at how you can assess something like that. Sarkozy did this in France. I think the Blair government started something in Britain. There's some office of the Australian government that's trying to do something like this.
It's hard, but I think it is actually along the right kind of lines. I think that is the sort of thing that we ought to be trying to measure. We ought to be doing more work on how we measure that.
And of course, I suppose health care economists have measured quality adjusted life years in terms of assessing the benefits of various forms of medical treatment. I think that's open to criticism, but it's better than nothing as a way of doing it.
MR. SINGER: And on super-empowered individuals stepping forward. You ask something like, what can the government do to move people in the right direction? So I think it's good that the Gates and Buffetts and a lot of other people are taking an important role in doing this and that should be encouraged. As I said with my opening remarks, I think not all philanthropy is equal. And we should be encouraging this to go in particular directions. And the major power that the government has of that is the tax deductibility provision. And I know there's been some discussion of altering that, and there's been a lot of fear among some charities that, if you tamper with it, then who knows once you open that Pandora's box what will come out of it.
So there is a risk there. But I do think that tax deductibility of 501(c)3s is very loose in this country. It's much looser than in most other countries. And I think there's a good case for saying that it's too loose. And that it often actually favors those who are privileged.
There's a guy called Rob Reich at Stanford who does research in philanthropy. And he had an article a while ago in the Times pointing out that near Stanford, there's a very wealthy school district. I can't remember the figures, but let's say the donation from the parents of the school amounts to $5,000 per child per year in that school district. And of course, all of those parents get tax deductions for it. So a large part of that extra $5,000 that goes into this school, which is already a good school because it's a wealthy district and the property taxes are high – a large part of that comes from federal funds. Whereas further down the road, there's a much poorer school district where parents donate, I don't know, $50 per child and the federal government isn't contributing anything very significant there, and it's already a worse school.
So that seems to me to be a good example of a case where we want to have some kind of equalization and we should not be having the federal government subsidize philanthropy wherever it goes, even if it's already aiding those who are already privileged.
MR. BOLLYKY: Job.
Q: Thank you. Job Henning with Open Revolution, a company that does mobile banking and mobile payments in emerging markets. If I could pick up a little bit on the incomplete information question and some of the questions about current versus future returns and invite your thoughts on this comment initially. There's a sort of view amongst some that a lot of philanthropy tends to encourage a certain conservatism in how they operate and think about return on donor intervention. As a question, would you agree with that?
Second, is there an ethical element or aspect of thinking about that small-c conservatism? Is philanthropy obligated to think in terms of known returns versus risk, experimentation, and innovation and essentially very unknown returns, but think that could have a huge impact on the outcome of the ultimate good that results from that investment?
MR. SINGER: Yes. A good point and I think it depends on the kind of charity or NGO that we're talking about, because those that are drawing on relatively small donors handing over their $100 or $200 a year, do want to be able to tell them your money did this and there's something positive that the donors support. And if they say, "Well, we had an idea that we thought could have a big payoff, so we used your donation to that, but unfortunately it didn't work." Then the donors are less likely to come back to them.
So I think the more experimental, more high-risk kind of philanthropy has to come from people who are more sophisticated donors and typically ones with much deeper pockets as well, so that they can be prepared to say, "Yes, I put millions of dollars into this, and I realize that it may not work, but if it does work, it's going to payoff very big." And obviously Gates has done that. Foundation Good Ventures, which has been supporting GiveWell and is looking at other kinds of things in San Francisco, is doing that kind of work. So there're a number of people who are doing it. And I think that's terrific, and they should be encouraged to do that, but it's clearly not going to be for everyone. And I don't think it's going to be possible to change that.
MR. BOLLYKY: Frederick next.
Q: Thank you. Fred Tipson at the U.S. Institute of Peace. Professor, how do you approach issues of quality of life in relation to population growth and population control? In several ways, the evidence is that generally speaking, women have a higher quality of life when they have fewer children, at least within some range of, two to seven or whatever it is. So the whole family has a better quality of life, but there are fewer of them. But also cases where Pakistan, Nigeria, Egypt, and Tanzania, where the population growth numbers are so tremendous these days that the combination of water, food, and other scarcities suggest that the quality of life is at some point going to deteriorate, and therefore everybody in the country would be better off if there were fewer of them.
How do you deal with arguments of that sort and the priority that you might be suggested to attach to population control or birth control?
MR. SINGER: I do think population is an important issue. And we have to recognize that we're heading for ten billion people around the middle of the century. And as you cited, other countries with the highest rates of population growth are perhaps the ones that seem least able to provide their citizens with a good quality of life. So I think all of the points that you made about that are correct. And it's very reasonable for people to see that as an appropriate target for their philanthropy. It's a little bit like the question we had earlier about getting rid of polio even if it's costly now, but in the long run it'll have added benefits.
So you might say the money that you're using to help women to control their fertility could be used to save lives. Now, yes, that's true. But if in fact the population rates of growth continue in some of the countries you mentioned, then there're going to be a lot more people who are going to need to have their lives saved, and their quality of life is not going to be good.
I think, fortunately, you can recommend measures that are good for people now, as well as being good in the longer term by slowing fertility. In particular, providing education for girls has been shown to be associated with reduced fertility. So obviously it's good for women to have had an education. It improves their job prospects and empowers them to change the situations that they're in, which may be very oppressive ones.
But it also is going to lead to fewer children and each child, as you say, will therefore have a better chance of survival. That's been demonstrated with that the more space there is between births, the better off the children are as individuals and, as you say, the better off the women are. So I think that's an important priority. Again, where you have effective organizations that are doing this, they should be supported.
MR. BOLLYKY: Jonathan and then Elizabeth.
Q: Jonathan Jacoby. I work at Oxfam in our private sector department. Thanks Professor Singer, for being here and also for leadership over the years with these issues. So you wrote a column called "The Bitterness of Sugar" about our Behind the Brands work to engage the food and beverage industry. So to your right, you'll have Coca-Cola to be able to congratulate them around their strides on land rights. That's all to the good in terms of looking at how we can build sustainability into countries, especially those of weak governance. And land rights are one of those flashpoints.
My question is then how far can Oxfam go, in the expectations around supply chain responsibility and corporate responsibility to the extent that they go global if you're sourcing from a country where there is weak governance, for example? The U.N. has addressed this in its guiding principles on human rights in this question. So others have answered it, but I'm just curious of your personal take on what are reasonable expectations of multinational corporations operating in areas where the state governs weakly.
MR. SINGER: That's a very interesting set of issues and, indeed, something like Behind the Brands campaign is what I had in mind when I was talking about randomized controlled trials, that there were some initiatives where you can do randomized controlled trials on some health interventions or maybe microcredit or savings to change things. But if you're running a campaign to try to get corporations to protect the land rights of people who are disempowered, there's obviously no way that you can run controlled trials on that. So you have to simply form an estimate of whether this is going to work or not. It seems in this particular case that it is working and that Coca-Cola has adopted standards that will require their suppliers to ensure the free and informed consent of people from whom they're buying land or where they're growing sugar cane, for example.
So I think that's been very important. In terms of how far can an organization like Oxfam go, I think there's a lot further to go actually in pressuring corporations. We earlier had this discussion about countries with considerable mineral wealth that are not using that wealth to benefit their people. At the extreme, it seems to me that corporations that deal with these governments are essentially receiving stolen goods. Take as an example Equatorial Guinea. It's a tiny country. I think the population is approximately 700,000. It's the third largest Sub-Saharan oil producer.
Those people there ought to all be wealthy and ought to all have a high standard of living. In fact, it's one of the poorest countries around, but the dictator who rules it, Obiang, is extraordinarily wealthy. So if Western corporations or any corporations are buying oil from Equatorial Guinea, aren't they in effect taking it from somebody who has stolen it from the people of Equatorial Guinea? It's not as if he was elected in free and fair elections, and the people decided that that's how they wanted their oil money to be used. But the oil doesn't belong to somebody who manages to seize power in a coup and then hold it by intimidating opponents.
So I think that we've got a lot of work still to do in trying to get corporations to seriously take their responsibilities. That can be at sort of a more detailed scale, as in the Behind the Brands campaign, to look at how suppliers to corporations in the food business acquire land or look at their labor practices in detail. Those are things that can and should be done. But I think we really need a stronger code of responsibility in general.
MR. BOLLYKY: Elizabeth.
Q: Thank you. Elizabeth Littlefield. I'm with the Overseas Private Investment Corporation (OPIC). I wanted to just pursue the question that Jen raised about the mechanisms to induce the private sector or markets or the business community to need to do things that are good for the planet that it wouldn't do otherwise and all of the cultural and psychological barriers that are inherent in that. Because of course, we know that to create subsidies for someone else and make money, is difficult to get their heads around.
Q: Ethically, yes as well. I always find that people's brains are completely bifurcated. And the philanthropic world exists and has existed for too long in isolation from markets in the private sector. So people are going to say, "Here's a problem that the private-sector markets won't solve, so therefore philanthropy and the public sector should solve it," rather than "What's the smallest amount of scarce subsidy money that could be brought to better to cause markets to do this thing we want it to do?"
Maybe this is something I'm particularly aware of because as a development finance institution, our mandate is to help bring the private sector in to solve development challenges. And we've seen development finance institutions throughout the world growing by leaps and bounds. Just look at the International Finance Corporation and its growth. And yet still this de-linkage between markets and philanthropy persists.
So what are your thoughts on the isolation that persists and what can we do to incentivize philanthropists and development dollars to be used as effectively as they can to leverage in the maximum amount of less scarce private money?
MR. SINGER: You seem to be saying that it's persisting and that it's not actually narrowing that gap? Because my impression was that it has benefit narrowing significantly over the last decade or so, that there was a lot more links between for profit sector and philanthropy.
Q: No, I think microfinance was the example that was used, but I still find that foundations and development dollars do think of themselves as being the only dollars solving that problem, rather than figuring out what's the least dollars that they could spend to bring in somebody else who could do it.
MR. SINGER: I entirely agree with you. If you can get the market to do it and if that's going to be cheaper than doing it all through philanthropy, that seems to be clearly a win-win. I suppose there's this worry about that people are going to be corrupted by coming into contact with the for-profit sector or something of that sort. I hope that it will change.
One of the things I talked about was the "effective altruism" movement at the beginning. There is some interest in encouraging people who are interested in philanthropy, interested in being altruistic, to go into areas like banking or finance because they'll earn large amounts of money, and then they'll have much more money to give away. (Laughter.) And they may actually be able to make a bigger difference than if they become an aid worker. I think there was a Washington Post article about this a few months ago.
And I know a few people doing that. One of my students at Princeton graduated only a year or so ago and received the philosophy department's prize for the best senior thesis. He could have gone on to an outstanding graduate school. Instead, he's working in New York and giving away fifty percent of what he's earning.
So maybe if there are more people who do that and become familiar with the world of finance and banking and so on, while their values remain very much in philanthropy, we'll start to bridge that gap better.
MR. BOLLYKY: I want to ask you one last question. The choice you give in your op-ed—between funding an art museum or addressing the needs of the poor—is actually playing out in Detroit, where there are bankruptcy proceedings going on that will potentially void people's pensions or at least reduce their pensions. At the same time, you have a museum that has a tremendous collection of art work that's the property of the city. And, there's a question of whether or not that art should be an asset in the bankruptcy and be liquidated in order to pay for some of the shortfall on pensions.
The debate over Detroit and its art is similar to the debate to your op-ed, which can be framed as a choice between the individual and the community. It's one thing to talk about the harms experienced by an individual. Nobody wants their pension limited. Nobody wants to go blind. It's another thing to say what happens to each individual member of society is as or more important to what happens to the community, whether our cultural heritage or support for arts education or any of the other community values that we might have. It is a question of how we resolve these debates between the individual and the community. In your concluding remarks, can you talk about the Detroit example?
MR. SINGER: I have noticed that situation, and it's a tough one obviously. On the one hand, it's certainly bad if you're not getting your full pension, but the difference in the selling of the works of art will make to any individual pensioner is probably not very great and certainly in no way comparable to the difference between having your sight or not having it.
On the other hand, there's a question of what it says about a city that it has to sell off its art collection and perhaps it's a sign of a lack of confidence in the future – that the future will get better and there will be a future for Detroit in which people will come to Detroit to see its art collection, among other things.
So I would be reluctant to sell it off not so much because I think that it's a question of preserving our culture, but it'd be more in a way of what it says about the prospects for the future of a once great city.
In terms of the preservation of culture, I presume that if it is sold off, those artworks are going to go to museums elsewhere around the country. So they'll still be preserved, and in that sense is not a loss. And that's generally true of museums. I'm not saying that they should cease to repair their roofs so that when it rains, the paintings get ruined. I think there is a cultural heritage that has a value, but that's different from expanding the collection, building new wings for better display, and competing with other museums to pay higher prices for great works.
So my hope is that Detroit will not have to sell off its collection in those circumstances, given the two different things that we're balancing. But I could see that in some cases, you might have to reach the conclusion that this is no longer a city that can afford an art collection of that sort. If Detroit's efforts to put itself back on its feet fail and it continues to become depopulated and essentially becomes a smaller and less significant city, then it becomes sort of an anachronism for it to have a great art museum.
MR. BOLLYKY: Great. And with that I'm going to end this event. Thank you. And please join me in thanking Peter for attending. (Applause.)