Giving Compass' Take:

• Rhodri Davies explains how philanthropy can be undemocratic and how funders can use philanthropy to advance democracy. 

• How can funders be intentional about their relationship with democracy? What specific actions can you take to address the structural inequities that threaten democracy? 

• Learn more about Philanthropy and Democracy

First, then, let’s look at the arguments that have been made against the role of philanthropy within a democracy.

1) Plutocratic bias
One of the key charges levelled against philanthropy is that it represents a means of bypassing the machinery of representative democracy in order to shape public opinion and public policy, and that because those with large amounts of wealth are disproportionately able to exert influence via this means it introduces a “plutocratic bias” into our society. Furthermore, unlike elected officials or politicians, these philanthropists are not accountable to anyone but themselves.

2) Perpetuity and The Dead Hand
It is not just the amounts of money involved in philanthropy that some have taken to be a problem in terms of its effect on democracy, but also the timescales involved. In particular, there have been many fierce critics of the idea of perpetual charitable endowments ─ structures which allow charitable money to be held for an indefinite period (and invested), and then given out in grants according to set criteria which delineate the charitable purpose.

3) Allowing “factions” or “associations” is inherently anti-democratic
Coming back to the question of scale - is it only “big” philanthropy that we need to be concerned about in relation to democracy? One might reasonably assume concerns about plutocratic bias only become relevant above a certain threshold (although this immediately raises some tricky questions about exactly where any dividing line should be drawn). Likewise, setting up endowments is fairly inextricably linked with having larger amounts to give, so concerns about perpetuity only seem relevant to big philanthropy.

It is clear that the relationship between democracy and philanthropy is not straightforward, and has been contested on a number of fronts for a long time. But can we make a case in favour of philanthropy as a positive force within a democracy? I think we can, and here are some possible grounds to base it on.

1) Overcoming the “Tyranny of the Majority”
One argument starts from the premise that almost all forms of democracy are imperfect. In particular, they tend towards a “tyranny of the majority” in which members of minority groups or those with minority views are prevented from expressing their choices in any meaningful way through standard democratic means (either representative or direct), simply because they lack the numbers required to do so ─ particularly when one person counts for one vote and there is no mechanism to counteract this effect or to ascribe stronger weighting according to how strongly views are held.

2) Discovery & Innovation
If, as we have seen, it is harder to justify elite philanthropy on the grounds of supporting a plurality of viewpoints and thereby overcoming the tyranny of the majority, then can we find a different justification?

3) Holding the state to account
Another argument in favour of philanthropy is that by funding civil society organisations, it provides a means to hold the state to account for the services it delivers by highlighting gaps in provision and failures or demonstrating better ways of doing things.

4) Democracy as a cause
Some organisations might aim to strengthen democracy explicitly: not by representing the interests of a particular group, but by promoting general democratic ideals or civic skills as their core mission.

5) Teaching democratic skills & demonstrating models
Even when CSOs don’t seek to promote democracy themselves, or even to influence the state in a way that adds to democracy, they have historically played an important role in giving their supporters and those they work with many of the skills they need to engage in wider democratic processes.

6) Overcoming political and social division
One of the challenges currently facing liberal democracies around the world is that social and political divisions have become so stark that it is difficult, if not impossible, to get increasingly polarised groups and communities to engage with each other. This leaves little room within the political sphere for the constructive debate and compromise that is essential to making democracy work. This is somewhere where civil society organisations and philanthropic funding can potentially play an invaluable role.

Read the full article about the relationship between philanthropy and democracy by Rhodri Davies at Charities Aid Foundation.