The combination of massive wealth accumulation and the growing priority of doing good is creating a proliferation of charities addressing a diverse range of issues. In general, this phenomena is encouraging, but we are fooling ourselves if we believe that every charitable situation is overwhelmingly positive for all.

This issue came into particularly sharp focus for us while reading Benjamin Soskis’s article from The Atlantic entitled The Importance of Criticizing Philanthropy. The article was in response to a controversial op-ed written by philanthropist and former hedge fund manager John Arnold in which he laments the verbal attacks he has received by virtue of his foundation’s charitable efforts. Soskis’ thought-provoking article can be summarized in the following brief excerpt:

“There need not be anything deliberately sinister in the Arnold Foundation’s giving for it to demand our scrutiny. For given the power that private philanthropy can wield over public policy, a spirited, fully-informed public debate over the scope, scale, and nature of that influence is a democratic necessity. It’s our closest approximation of holding our mega-donors accountable.”

This article opened our eyes to the necessity of probing deeper into the charities we want to support and the consequences (albeit on a much more limited scale) of our own efforts.

Private charitable organizations exist along a wide spectrum. On one end are those who ably contribute to forwarding universally appealing causes; on the other end are those representing nothing more than outright fraud designed to enrich unscrupulous founders and their mendacious recipients. Residing somewhere in the middle are those efforts we might call controversial, many of which are politically motivated. In our opinion, it’s from the middle to the right extreme that philanthropies must be examined to criticize, challenge or in the worst cases uncover their unstated impact. Understanding the true motivations and potential consequences of these charities rests on fellow donors and impacted citizens alike. In many cases, denying them your philanthropic dollars is simply not enough.

Every act of giving is indeed an act of speech that can be interpreted by observers, correctly or otherwise, in whatever way they deem fit. It might not be fair, but it’s the reality in which we live and work. It’s also a reality that a number of causes presented to us as politically neutral are not what they claim to be–circumspect probing is the best tool to really understand what is going on.

Charitable groups exist on a spectrum of universal respectability and appeal on the one side and much debate and polarized controversy on the other. While the majority of donations go towards the universally appealing–for obvious reasons–a strong level of investigative rigor can unearth some overlooked gems.

 

Universally Appealing

Perhaps the most visible causes, major research initiatives to fight diseases like cancer and Alzheimer’s carry wide-ranging appeal with minimal controversy attached to them. While there are disagreements over approach and specific forms of messaging, almost no one will object to their end goals. Even when taking unconventional approaches to fighting such major diseases, it’s hard to argue against when the end goal, when reached, will create a massive benefit to society. In short, if they win, we all win.

 

Differences of Opinion

Further over on the spectrum are those causes which are generally acknowledged as worthy but with wide disagreement over how best to address them. Improving education and healthcare and eliminating homelessness are universally recognized as necessary tasks, but with incredibly wide divergence in opinion on how to actually do it. Areas such as these are vulnerable to politically-motivated or potentially self-serving actors with less interest in how to solve problems, and more eagerness to prove their own point right. Such agendas hurt philanthropy as a whole, transforming noble causes into emotionally-charged battles.

 

Highly Questionable

In addition to questioning motivation and methods, we must be vigilant about self-serving “research” conducted under the guise of philanthropy. A larger-scale implementation of garden-variety fraud and misrepresentation happens when malicious actors fund skewed and highly questionable academic work to their own ends while purporting to act in the public interest. The claims of “informing the public” didn’t hold up in bad studies arranged by Big Tobacco throughout the 20th century, or more recent controversies about funding for nutritional research by purveyors of sugar-laden snacks and drinks. Similar bad-faith research initiatives have been rampant in the environmental arena thanks to energy companies seeking to protect profits at all costs.

These are issues that impact public policy and demand public involvement due to the potential for detrimental results. The studies above put on the guise of public health and a philanthropic desire to educate, but were corrected thanks to vigilant journalists. Even governmental bodies have stepped in as of late, including the National Institute of Health who has recently ordered a full audit of studies in progress to prevent biased corporate donors from bending the focus of research in their favor. Still, the threat of such deceptions may never truly go away.

 

Outright fraud

The rapid spread of information in the 21st century can give undue credence to works or messages before the record can be corrected. While in many respects, our highly interconnected society can root out falsehoods better than before. Mark Twain’s old adage is even more accurate today: “a lie can travel halfway around the world while the truth is still putting its shoes on.” Lies can circumnavigate the globe in an instant and take a long time to correct. It’s of the utmost importance that we don’t fall prey to well-disguised lies, and there are numerous ways to do so. Simple, cursory steps taken by donors large and small, the baseline defense against bad charity actors, can weed out such organizations. It’s up to donors to do their homework: the more diligent, the better. Respected watchdog organization CharityWatch here compiles some of the worst offenders: people whose charitable outreach appeared trustworthy to countless donors but were lining their own pockets instead. One can’t simply rely on the claim of a 501c3 to ensure a group is completely above board.

 

Major privately funded charities offer immense hope to addressing and solving serious issues, both global and domestic. We believe donors are entitled to pursue, even aggressively, their passions and motivations. By the same token, others have the right and in some cases the obligation to scrutinize, disagree and, when necessary, fight underhanded or dishonest charitable activities. Vigilance is the best tool to ensure key issues are not hijacked. We applaud The Atlantic for shedding light on the issue, and for the Arnold Foundation in pursuing activities they genuinely believe are for the public good.