29 July 2019

Wake up, philanthropy!

Anyone who has ever been to Augsburg knows that it has a city within the city. I mean the Fuggerei, the oldest existing social settlement in the world. Here, surrounded by walls, you will find 67 ivy-covered houses, 140 apartments and a church. Jakob Fugger, who counted among the most important merchants and bankers in Europe about 500 years ago, donated the settlement at that time. Even today, needy Augsburg Catholics live here for an annual rent of 0.88 euros and three prayers a day. When we look back into history, we see that philanthropic institutions like the Fuggerei Foundation were always children of their time. They reflected values and visions of their time, and took up topical challenges – as they still do.

Changing faces of philanthropy

For a long time, philanthropy was not political, not system-oriented. Take for example the period around the Industrial Revolution and the decades that followed. The Industrial Revolution brought progress, but also new social needs. Work changed fundamentally from agriculture to factories and mines. House and work were separated from each other and thus also family structures. Communism and socialism both brought revolutionary ideas, social programmes were established. In this epoch, the state was central to solving social problems. Philanthropy existed, of course, but it was not (yet) political.

The 20th century’s wars then brought millions of victims. Political elites concluded that it was necessary to build society on human rights, on principles like freedom, equality and brotherhood. Democracy was extended to One (Wo-)Man One Vote. Welfare states were developed. The volume and the role of philanthropy in the western world became more important. Newly acquired wealth put entrepreneurs in a position to give something back to society. Today we can speak of a real boom in the philanthropic sector.

This boom also gave rise to a new debate: How does philanthropy relate to the public agenda? Foundations do a lot of good things but are also an expression of big differences in wealth. Are foundations part of the establishment? Are the superrich transparent, accountable? And how do democracy and philanthropy relate to each other?

This last question is now more pressing than ever in view of the current challenges facing European societies: Our liberal democracy is undergoing a “stress test”. We recognise a loss of legitimacy of democratic institutions, declining confidence in political parties and large “gaps” in representation that provide breeding grounds for populism. Finally, the growing inequality in industrialised countries with prosperous economies calls into question the democratic system and its promise to offer all people opportunities for a better life. What are the current answers to these challenges?

Hardly any answers to pressing questions

Business is silent and freeriding on the highways of democracy. Academia is speechless if in the political debate rational arguments cannot triumph. Democracy seems not to be able to save itself.

The potential of philanthropy is therefore perhaps greater than ever. At the same time, the philanthropic sector has a new heterogeneity. Not all the actors involved in it have genuine democratic objectives. How are we supposed to understand the plans of Steve Bannon to establish a foundation to support nationalism in Europe? Can a populist party in Germany run an education programme with public resources? What if governments start to scrutinise foundations on shared values? How tolerant should we be towards intolerance? How can we pay democratic respect to those who reject democratic rules?

We are now at a point where we cannot ignore these questions. We must face them together. And we must finally wake up: Philanthropy must stand up for democracy and fight for it. The questions we should ask ourselves are not whether we need philanthropy and whether it can make a difference, but rather how do we make sure philanthropy works together to make that difference. Of course, foundations can do a lot of good: They often have the knowledge and the networks to be effective at local level, close to those who need philanthropy’s support. They can find solutions and test them in practice. Philanthropy can contribute to an open society and people-oriented services. Still, foundations can do more, they can play a role where political officials have no room for manoeuvre.

Can philanthropy save democracy?

We should ask ourselves how the philanthropic sector can join forces to work for democracy and for a successful future. We can look at the long term. Personally, I think the sector is moving in the right direction: We have more information than ever before about what is necessary, relevant and urgent to be done. We have more financial resources than ever before. We have the technical instruments and infrastructure to connect internationally.

Philanthropy can be on the frontier to cope with pressing worldwide social and ecological questions, which – if we don’t act – will disrupt western democracy completely. But in order to do that, we need to work on it with as many European foundations as possible. We have to cooperate and to defend our values loud and clear, we have to align our strategies and actions.

And if we want this joint commitment to be successful, we need a language on which everyone can agree. The Sustainable Development Goals can serve as such a lingua franca for us. This “Agenda 2030” is unique – unprecedented, holistic, universal and legitimate. It has a message for every country and for every responsible actor and has been agreed upon by all government leaders of member states of the United Nations.

Philanthropy as practised by foundations surely cannot save democracy alone or solve all its problems. But it can play a role which politics and governments cannot play in supporting citizens and institutions who are victims of autocracy and populism, and in coping with pressing social and ecological questions.

We all have to leave our comfort zone. Foundations cannot stand on the sidelines! We need the new democratic Fuggers of the 21st century!




Aart de Geus

Chairman and Chief Executive Officer, Bertelsmann Stiftung