The trouble with our institutions – should philanthropy play a role?

Few would dispute that the world has a problem with public institutions. A recent Edelman poll in 25 countries showed that they are seen as both less competent and less ethical than either business or NGOs. To generations brought up on social media and digital services, public institutions often look sluggish, overly bureaucratic, hierarchical, and far less agile than the businesses based on search, platforms or algorithms that dominate daily life. No wonder politicians berate bureaucratic stasis even while struggling to know how to fix it.

Meanwhile at a global level the institutions that took shape after WW2 are also frayed and weakened, struggling to cope with a return to brute nationalism and US hostility, even as there are glaring gaps where the world needs governance, from space and oceans to AI.

For two centuries, civil society has shown that there are alternatives to the Leviathans of the state. Mutuals, co-ops, associations and charities of all kinds proved that hierarchical pyramids are not the only way to run a society. They showed how more equal, democratic and accountable methods could combine accountability and efficiency. And often civil society advocated for new public institutions – from welfare states to public broadcasters, regulators to protect consumers, to providers of healthcare and philanthropy played a key role in funding social innovations early on when they couldn’t secure government support. This interplay between civil society, including philanthropy and social innovations, played a key role in establishing the European social models.

Yet faced with the current crisis, civil society and philanthropy have gone silent, appalled bystanders rather than engaged shapers, and the same is true of universities, which are far more comfortable doing analysis, commentary and critique than helping to design options for the future. When Elon Musk’s DOGE assaulted US institutions, many threw their hands up in horror. Few offered any alternatives.

The gap is even more striking in relation to AI. While AI became part of daily life in everything from credit scoring and social media algorithms to public services, very little work was done on how to design the institutions we need to shape, govern and make use of AI in all its forms, leaving the world with a stark asymmetry between the powerful, autocratic businesses that now dominate the technology and very weak or non-existent institutions to protect the public interest.

Europe’s institutions were reasonably effective for many decades, providing peace and prosperity. But that very track record of success has often made them rigid and inflexible, and given space for the populist right to promise to burn them down.

One reason for disengagement is fear that it’s not legitimate for philanthropy to move beyond projects and programmes to institutions. There may also be an overhang of many decades when neoliberalism encouraged people to believe that public institutions were bound to be incompetent and that business would do better. Another factor may be a lack of confidence in technology, which matters since many of the new options for institutional design make the most of platforms, data and AI, and the ‘stack’ models that underpin the Internet.

But if philanthropy and civil society don’t take up more of a leadership role, who will? Political parties are very ill-suited to this work. Business will always put its interests first. And most public intellectuals are more comfortable offering critique than ideas. The risk will be a continued failure to address the big issues of our times, from climate to mental health. As in the past, philanthropy needs to step up in this moment where we risk paralysis. Surely some should be actors, not just spectators?

The authors are co-founders of the Institutional Architecture Lab which works around the world with governments and foundations to encourage more imaginative thinking about the institutions that are meant to serve us, from designing new global institutions to handle climate tipping points to new national institutions to regulate AI or imaginative ways to help cities better use networks to provide care or cope with emergencies. See tial.org