Exploding Philanthropy: What the Clinton Party Really Meant

Richard Branson looked over the commitment document, looked up at Bill Clinton, and held his pen in the air with just a short, dramatic pause.

"That's an awful lot of noughts," he quipped.

Then he bent to the task, scratching his name on an agreement that will commit all profits from his transportation empire toward the development of alternative and renewable fuels and technologies - a commitment valued at $3 billion. But it's not charity, and it's certainly not philanthropy as it's commonly defined.

In the gurgling and pointing after Clinton's dust-up with a Fox News interviewer last week, much of the accomplishment of the historic second Clinton Global Initiative has been lost in an avalanche of YouTube replays and talking-head relays.

Sure, it's great TV and a shot in the arm for a weary and outraged liberal base, but it also overshadowed the truly newsworthy: the fact that CGI is helping to lead a massive change in the way Americans conduct philanthropy.

The Clinton Global Initiative wrapped up last Friday afternoon in New York, sending 50 heads of state, one first lady and one former first lady, two ex-presidents, one almost president, several secretaries of state, a few movie stars and singers, and scads of pinstriped moguls and CEOs back into the real world - the one where war dominates, politics polarizes, and well-intentioned efforts often smash to tiny bits of well-funded flotsam on the sea of world turmoil and base human hatred.

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My partner Susan Carey Dempsey and I covered the Clinton confab last week for onPhilanthropy, an online center for nonprofit and philanthropy professionals I established seven years ago to provide thought leadership in the sector.

For three days, CGI was a kind of dressed-up Woodstock for corporate generals and NGO dreamers - three days of peace, love and understanding keyed by groovy world music overtones to accompany slick Powerpoint and desktop video. Everybody got along (at least onstage - cable interviews were another thing entirely). Bushes and Clintons mixed with Gores and Murdochs. And 215 pledges were made totaling $7.3 billion, all aimed at changing the world in one of four areas: environment, poverty, tolerance and health.

But in the words of one waggish bystander in the Sheraton hallways last week: this ain't no capital campaign.
Indeed not. Nor was it - like someone else suggested, an upscale Jerry Lewis Telethon (Ed McMahon was not present). The "pledges" were really was the Clinton team would prefer to think of commitments; multi-year promises to invest time and money and in-kind goods in making the world a better place. In some cases, the dollar value was extraneous to the importance of the commitment.

And although they were all "philanthropic," much of the total was not philanthropy - not as the U.S. Tax Code defines it, or really, how popular culture has always considered it since the earliest societies adopted alms giving to the poor.

Branson's pledge to use all the profits from his Virgin transportation businesses to fund research into alternative energy sources and technologies. But the estimated $3 billion was not a gift; Sir Richard will invest the company in other companies, including one he already owns, to try and move the developed world to better energy policies. Yet he could have put the money into his pocket, as the largest shareholder.

It's as if the Clinton team was determined to destroy the entire accepted parlance of the philanthropic world. Venture philanthropy? Not quite. Corporate philanthropy? In part. Foundations, nonprofits, NGOs? All part of the mix. Major gifts? Very major indeed, but not all "gifts."

For Sir Richard, the reasons for this commitment (which amounts to his company investing its profits in other companies or startups in the alternative fuel sector), seemed explicitly personal. First, he said, he believes in President Clinton's leadership and the network of NGOs, companies, and governments that he has assembled. Then he added in a hallway interview:

"I've got children and I hope to have grandchildren one day. At the moment everything hear about what's happening in the world is very worrying and somebody has got to do something about it."

At Google, at Virgin, and with the foundations of the billionaire eBay founders the motive is personal and concentrated at the top. Indeed, eBay's Jeff Skoll included a desire to do good as part of eBay's founding DNA as a company.

"When Pierre Omidyar started eBay, he had a vision from the beginning that eBay could be a real across-border platform. So when we built the company it was from a very, very democratic viewpoint ... we believed that when people trade with each other, they get to know each other."

My friend Dr. Susan Raymond analyzed the hub-bub over Google's "for-profit philanthropy" and, I think, really captured the quandary facing those of us who work in the philanthropic sector:

When (if) Google.org's investments in technology pay off, Google.org will reap the financial rewards. It may not distribute these to shareholders. It may retain them for the next round of social investments, but the same may not always be said about its partners. Also gaining will be the venture capitalists (all of whom, one assumes, got where they are not with bleeding hearts but with cold hard analytics) who have joined in capitalizing the investments. Everyone will make money. Jobs will be created. Value will be added to the economy. Taxes will be paid. AND the environment will be cleaner, and global warming will take one more left jab to its chin.

How is this "philanthropy?" The end is socially driven, but the means are the beauty of capitalism carried out largely in the marketplace.

Clearly, The End of Definitions is upon us.

This appears to be the case. Speaking on a panel with Bill Gates, Clinton introduced a theme about risk and reward as factors that have been lacking in what we in the west have regarded as the developing world.

"You know, Bill Gates and I try to do this in different ways but I think we agree on two things. One, you must have a measurable impact. Secondly, there has historically been a total absence of the capacity to reward talent and effort in the developing world. There is just a broken connection between effort and reward and that leads to a sense of hopelessness."

Last week's Clinton confab was part of a discernible trend in "philanthropy" - that is to day, the rapid deconstruction of the accepted term. The reach and economic might of the Bill and Melinda Gates Foundation, the disposal of Warren Buffett's fortune, the creation of the loosely for-profit Google.org, Branson's "gift," and the kind of economic studies that come out of the World Economic Forum and the Milken Global Conference all point in the direction of blurring the boundaries between philanthropy, business, and nonprofits.

How this changes democracy is clearly a question we who live in democracies must ask. As major-league funding efforts to change the world cross international boundaries and move far outside the oversight of our individual elected representatives, does the average Joe maintain any say on the global commons? Does this mean we have to reconsider how we view tax-exempt status in the U.S.? Should we reconsider the legal strictures on American foundations?

And beyond that, does it work? In the end, even a room with the heft of the Clinton Global Initiative has a hard time fixing the political realities that hinder real change in the world, that keep people dying from bad water and poverty and disease - ills that modern society can fix. Cynics blasted CGI as a staged love-in that broke down fewer boundaries than it appeared to. Part of that is fair criticism; no three-day conference can change the world.

But what it can do is get people talking, and get people thinking - and at a level where real change is possible. You can dismiss CGI as Clinton's government in exile, but you can't dismiss the very real commitments made there. And the sense that an American leader can and should set the stage for change - and commitment throughout the world.