The Limits of Hero Philanthropy
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Michael R. Ford
March 15, 2020
Last month Secretary of Education Betsy Devos announced that she would personally fund a private school scholarship promised to a Philadelphia student during the State of the Union address. In my home city, a benefactor recently secured a sizable donation to help make city busing free for public school students. Both of these donations deserve to be praised for the well-meaning gestures they are, but they are also evidence of more complicated issues regarding government capacity. If the role of government is to provide basic services to the public, what does it say when basic services must be subsidized by private citizens?
Since the time of Tocqueville the role of philanthropy has been recognized as part of the American experience. Nonprofit scholars have several theories explaining the relationship between giving and government. The theory most apt at explaining the need for the aforementioned donations is government failure theory. When government cannot adequately provide a service to its citizens, services such as education and affordable transit, the nonprofit sector theoretically fills in the gaps.
Government failure theory does indeed explain some giving patterns. In the DeVos case, the public school to which the Philadelphia student was assigned did not meet her family’s needs, and a private donor stepped in to fund an alternative option. But the subject of a State of the Union anecdote is an outlier, and is evidence of the problem with what I call hero philanthropy. The relevant question is why this student did not have access to a quality public education. What is being done by government to address that failure? Perhaps a publicly-funded private school option should be a policy solution to this issue, but again, hero philanthropy masks the need for policy change with its warm glow.
In my home state of Wisconsin we have seen some of the consequences of hero philanthropy at scale. In 2003 the Gates foundation came to Milwaukee and made a $17 million investment in city schools. The money, of course, came with conditions. Gates was interested in small high schools despite limited evidence that small high schools would improve outcomes. Nonetheless, new and existing schools sought Gates funding by rebranding themselves as small high schools. The Gates money spurred a lot of changes in how education was delivered in Milwaukee, but outcomes did not improve, and the Gates Foundation left.
I think back to the Gates investment in Milwaukee every time I see a new announcement, small or large, of private funding for a government service. I first think of social equity. Social equity is premised on the idea that every citizen owns an equal share in their government. The concept is easily undermined when private funders purchase influence far beyond their share. The Gates money was not raised in pursuit of reform. Rather, Milwaukee schools changed in pursuit of the Gates money. I think of the students who were not attending one of the small high schools. If small high schools were the answer, who decides who gets to attend one of the good schools as opposed to one of the bad schools? Then I think of opportunity cost. What would have happened if that money was invested differently? What would have happened if the public had invested $17 million in public education as opposed to outsourcing that function?
Mostly, I wonder if hero philanthropy is a predictable reaction to chronic underinvestment in government capacity. Investment does not solely mean financial. No amount of money will magically make schools, public transportation, and the broader array of government services better. Like a retirement fund, investment in government capacity is a strategy that requires a commitment to the long-term, i.e. staying power. The hot stock of the day may be exciting and tease instant riches, but it is the boring index funds that actually get the job done.
What, if anything, should be done about hero philanthropy? In the moment it is hard, and probably not wise, to reject the sincere generosity of private funders who want to help. But in PA we must speak openly about government failure. In my home city, we can accept private funding for public transit, but we must also identify why we could not provide this service without private donations. In Philadelphia, we must identify why that student could not find a school that worked for her. More generally, we must invest in a commitment to government capacity. While this includes a financial investment, it is more a philosophy that embraces public control over the provision of public goods and services. It does not negate the need for partnerships, or the value of philanthropy, but does clarify who is responsible, and who should be held accountable, for government performance.
Author: Michael R. Ford is an associate professor of public administration at the University of Wisconsin Oshkosh, where he teaches graduate courses in budgeting and research methods. He frequently publishes on the topics of public and nonprofit board governance, accountability and school choice. He currently serves as the president of the Midwest Public Affairs Conference.
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The Limits of Hero Philanthropy
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Michael R. Ford
March 15, 2020
Last month Secretary of Education Betsy Devos announced that she would personally fund a private school scholarship promised to a Philadelphia student during the State of the Union address. In my home city, a benefactor recently secured a sizable donation to help make city busing free for public school students. Both of these donations deserve to be praised for the well-meaning gestures they are, but they are also evidence of more complicated issues regarding government capacity. If the role of government is to provide basic services to the public, what does it say when basic services must be subsidized by private citizens?
Since the time of Tocqueville the role of philanthropy has been recognized as part of the American experience. Nonprofit scholars have several theories explaining the relationship between giving and government. The theory most apt at explaining the need for the aforementioned donations is government failure theory. When government cannot adequately provide a service to its citizens, services such as education and affordable transit, the nonprofit sector theoretically fills in the gaps.
Government failure theory does indeed explain some giving patterns. In the DeVos case, the public school to which the Philadelphia student was assigned did not meet her family’s needs, and a private donor stepped in to fund an alternative option. But the subject of a State of the Union anecdote is an outlier, and is evidence of the problem with what I call hero philanthropy. The relevant question is why this student did not have access to a quality public education. What is being done by government to address that failure? Perhaps a publicly-funded private school option should be a policy solution to this issue, but again, hero philanthropy masks the need for policy change with its warm glow.
In my home state of Wisconsin we have seen some of the consequences of hero philanthropy at scale. In 2003 the Gates foundation came to Milwaukee and made a $17 million investment in city schools. The money, of course, came with conditions. Gates was interested in small high schools despite limited evidence that small high schools would improve outcomes. Nonetheless, new and existing schools sought Gates funding by rebranding themselves as small high schools. The Gates money spurred a lot of changes in how education was delivered in Milwaukee, but outcomes did not improve, and the Gates Foundation left.
I think back to the Gates investment in Milwaukee every time I see a new announcement, small or large, of private funding for a government service. I first think of social equity. Social equity is premised on the idea that every citizen owns an equal share in their government. The concept is easily undermined when private funders purchase influence far beyond their share. The Gates money was not raised in pursuit of reform. Rather, Milwaukee schools changed in pursuit of the Gates money. I think of the students who were not attending one of the small high schools. If small high schools were the answer, who decides who gets to attend one of the good schools as opposed to one of the bad schools? Then I think of opportunity cost. What would have happened if that money was invested differently? What would have happened if the public had invested $17 million in public education as opposed to outsourcing that function?
Mostly, I wonder if hero philanthropy is a predictable reaction to chronic underinvestment in government capacity. Investment does not solely mean financial. No amount of money will magically make schools, public transportation, and the broader array of government services better. Like a retirement fund, investment in government capacity is a strategy that requires a commitment to the long-term, i.e. staying power. The hot stock of the day may be exciting and tease instant riches, but it is the boring index funds that actually get the job done.
What, if anything, should be done about hero philanthropy? In the moment it is hard, and probably not wise, to reject the sincere generosity of private funders who want to help. But in PA we must speak openly about government failure. In my home city, we can accept private funding for public transit, but we must also identify why we could not provide this service without private donations. In Philadelphia, we must identify why that student could not find a school that worked for her. More generally, we must invest in a commitment to government capacity. While this includes a financial investment, it is more a philosophy that embraces public control over the provision of public goods and services. It does not negate the need for partnerships, or the value of philanthropy, but does clarify who is responsible, and who should be held accountable, for government performance.
Author: Michael R. Ford is an associate professor of public administration at the University of Wisconsin Oshkosh, where he teaches graduate courses in budgeting and research methods. He frequently publishes on the topics of public and nonprofit board governance, accountability and school choice. He currently serves as the president of the Midwest Public Affairs Conference.
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