Philanthropists need to ask themselves hard questions about where their money is going

Throughout the European migrant crisis, Rescue has provided aid and support to thousands of vulnerable people.
Throughout the European migrant crisis, Rescue has provided aid and support to thousands of vulnerable people.
Image: AP Photo/Olmo Calvo
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When David Miliband was appointed chief executive of the International Rescue Committee, one of the largest global charities handling the refugee crisis, it came as a shock to some fellow politicians in his native Britain, who had no doubt expected him to continue a two-decade long trajectory in national politics. Miliband had spent most of his career up to that point as part of the UK Labour party, variously serving as foreign secretary; Tony Blair’s head of policy; and environment secretary, where he made tackling climate change a particular priority. In 2013, he made a much-publicized bid for leadership—but was beaten for the job by his brother, Ed. Following this surprise defeat, Miliband left both British politics and the UK, and moved to New York to head the NGO. 

At the request of physicist, and refugee, Albert Einstein, 51 Americans came together to form the IRC in 1933. Among them were educators, historians, theologians and human rights leaders. In the decades since, the organization often known simply as Rescue has provided emergency aid and longer-term assistance to refugees and those displaced by political or natural disaster in around 40 countries the world over. In the six years since Miliband took the position, the organization has seldom had more work to do. The European migrant crisis is as daunting and unsolvable as ever; in the meantime, Ebola, the Syrian civil war, and conflicts the world over have required careful diplomacy and action.

Quartz interviewed Miliband weeks before the UN reported a record-breaking 71 million refugees displaced worldwide. (In a later statement, Miliband described the situation as the result of “a clear international failure to tackle the defining political and humanitarian crisis of our time.”) He told us why philanthropists need to be prepared to take on risk, what government inaction means for philanthropy, and why we all have a responsibility to think globally when it comes to charitable giving. 

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This interview has been lightly edited and condensed for clarity.

Quartz: How should we be thinking about philanthropy?

David Miliband: I think there are three things that are really important.

First, for all the talk about social responsibility and corporate social responsibility, I think we have to think about social results and corporate social results. So the first is: We should be thinking about impact.

Secondly, we have to think about the responsibilities of philanthropy in an age when governments are in retreat from big problems. We see that in our humanitarian work around the world, as well as our work for refugees in the US—that big, complex, global problems are suffering from the retreat of governments. And that puts a real onus on NGOs and on philanthropists to step up and step in to make sure that we don’t take fright at the big global challenges, and instead seek to tackle them. Obviously the refugee crisis, I think, fits into that paradigm. 

The third is that we have to think about philanthropy as more than writing a check. It’s about a relationship, not just a transaction. It’s about the exchange of ideas, skills, about the use of voice for advocacy as well as the exchange of money. The best philanthropy is proud of what it does and is willing to contribute to it in more ways than just a financial one.

Can you give me an example?

The foundations that support us by doing pro bono legal support, or the corporations that support us by loaning us software engineers to develop a new tool for refugees who are arriving and don’t know, or need guidance on, where to find services, or the CEOs who are willing to stand to sign a public letter that says that refugees are contributors to society and not a burden on them. Those are more evident in the corporate and foundations space than individual space. But, you know, when [fashion designer] Diane von Furstenberg speaks publicly about being the daughter of refugees and about why the dehumanization of refugees is wrong, that’s very powerful alongside the financial support she gives to us.

Although it seems as though there’s been some backlash against the idea of “celebrity endorsements,” including research that suggests they aren’t necessarily as valuable as they look.

I don’t know what that research is. Our approach—and I can only speak about the International Rescue Committee—is to say, if you want to talk about others doing good, then you need to do good yourself. So, the foundation is the results and the impact that I talked about. But if you can add to that advocacy and voice, then it’s very powerful. 

I don’t talk about endorsements, I talk about validation. So the fact that the IRC won the $100 million MacArthur prize for solving a global problem, that’s an enormous validation. It’s the validators that you need who command respect. We’ve got Mandy Patinkin in Greece for us at the moment. He validates our work by speaking about it. It’s not like endorsing a product in an advertisement; it’s a deeper relationship, I think.

It was striking to me the amount of hostility people to super-wealthy people swooping in and signing a check to fix Notre Dame’s roof, rather than solving other more important problems—essentially, that philanthropists get to pick and choose which problems to solve. Do you think that that is a problem?

I was given an award by the Blue Card, which is an organization which helps Holocaust survivors. At the dinner, they recognized someone who had stepped in to provide finance so that Holocaust survivors today could have dental treatment. And of course, at one level, it’s admirable that someone should step in to do that. At another level, what kind of society allows Holocaust survivors, 74 years after the end of the second World War, to be in such poverty that they can’t even afford dental care? It’s wrong to direct hostility towards philanthropists who wants to do the right thing, but it’s right to say that societies are failing in their basic duties when the welfare state doesn’t exist for those in need.

If governments aren’t fulfilling their responsibilities, and the responsibility is on the shoulders of private citizens, is charitable giving an obligation that everybody who can afford to give should be embracing?

Yes, I think so. Obviously, people have different motivations, but I think that none of us succeed only because of our own endeavors. We’re all dependent on others. And philanthropy is one way of recognizing that. It’s really important that philanthropists tackle difficult problems that involve risk that others aren’t going to tackle. The philanthropic impulse is really important one and it should be dedicated to the toughest problems.

But a lot of the time, it’s not. If you look at the most-donated-to charities in the US, for instance, you have Harvard and Stanford in fourth and sixth place. It seems as though self-directed giving doesn’t always result in the money going to places that need it the most.

That’s a really important, really good point. And I haven’t got the statistic, but the amount of money that goes to international causes, relative to local ones, is very small. I think that there’s a need for philanthropists to think really hard about where will they have most impact. The marginal million dollars for a well-endowed educational institution—does that make more difference than the marginal million dollars for a charity serving people in need? That’s the kind of hard question that philanthropists needs to ask themselves.

There are certain politicians, especially on the right, who would like to slash foreign aid budgets and instead focus on private, individual donations. But private giving is often quite local in focus. What’s a solution to encouraging people to give globally, and indeed to give to problems that they may not even know exist? 

They shouldn’t start with problems that they don’t know exist—they should start with problems that they do know exist. That can be about refugees and migrants, it can be about climate, it can be about the range of issues that are known knowns. You would hope that the moral obligation as well as the interest, the interdependence, would be recognized by governments and you’d hope that private philanthropy was filling in where governments were not able to make a strong impact. 

We’re now in a situation where, with governments in retreat, philanthropists both have to fill the risk gap that governments don’t want to take and they have to fill in where government is not doing its job properly. We’ve moved from an age when philanthropy was perhaps seen as a luxury to it now being seen as a necessity, and I don’t think we should allow that to absolve taxpayers and citizens and governments of their responsibilities. But I think philanthropy can be a pioneer. Philanthropy can be a lifesaver, private philanthropy can be a catalyst as well. And those are all important.

You’ve mentioned the difference between measuring IRC’s cost-efficiency versus its cost-effectiveness. Could you explain the distinction?

Efficiency would be, how much do you spend on administration versus how much do you spend on programs. Effectiveness is, what do you actually achieve. For example: spending more on a human resources system that involves good training for your staff or spending more on a global IT system might reduce your cost efficiency, but increase your cost effectiveness.

What would you say to those who advise against giving to disaster relief in favor of slower burning humanitarian crises, like global poverty relief or malaria prevention?

We’d all love to be in the prevention business, and a lot of the work we do spans both response and prevention. What’s changed is that disaster is often taken to mean natural disaster, whereas we are dealing with political disasters, like the war in Yemen. The ongoing war in Syria is a political disaster, but it’s not a short-term, one-off event. There’s an implication in there that a disaster is one-off, and a short term response, whereas all of our experience is that when it comes to political emergencies, which is dealing with the victims of conflict, that’s long term, not short term.

I’m talking about research that suggests that if you have $1,000 to give, you should, for instance, purchase malaria nets over rather than giving to more complex, messier political crises, which may take a very long time to untangle, in terms of the number of lives you can save with your money.

I’d say two things about that. There are 50 million children around the world who are acutely malnourished and about a third of them are in fragile and conflict states. The places that you call messy—there is life-saving to be done on a very fundamental kind, because obviously malnutrition is both a killer in itself, but more important, it opens up young children to disease, which is then a massive killer.

It’s a proven and good intervention to have anti-malaria nets, but unfortunately there are other things that kill people than malaria. I would say that I would hope philanthropists are into life-changing as well as life-saving. Obviously the metric in life-saving is clearer than the metric in life-changing, but we think it’s really important to be into both.

At the beginning of the conversation, we spoke about the increased responsibility of philanthropists to take responsibility for things that might once have been governments’ jobs. It seems as though there are inherent problems with that, including the fact that many of the people who give do so ineffectively. And that, even among the wealthy, it seems as though many people are not very good at giving at all.

We talk about the gap that is left by the retreat of government not as something that is fixed for all time, but as simply a fact of the current moment. Certainly we think it’s really important that we show governments how far their aid goes—remember, government international aid is much greater than private international aid. There’s no sense in which private philanthropy is now covering the majority of the responsibility. It’s really important that we show that taxpayer-led aid is not just a moral necessity, but also a strategic investment. It’s also important that we say to philanthropists that we don’t live in a world where we can afford for them to be only concerned with the luxuries.

On an individual level, how should people be giving? Should they be tithing their income or giving large amounts?

I think that we have to let individuals make their own choices. Some people follow a religious compulsion, other people follow their charitable impulses. Others do something on a more mathematical level. I think it’s really, really important to let people make their own decisions about what their conscience tells them is the right thing to do. 

That seems quite risky.

In what way? 

Well, because people aren’t always very good at being led by that conscience. Sometimes they need advice.

You can’t legislate to make people give—the legislation for charitable giving is called tax. 

On that note, is it a problem that philanthropic giving, at least in the US, diverts money away from tax?

The US has its own distinctive system and it catalyzes quite a lot of generosity. I think there’s a separate argument about how the US sustains its own tax base, where the issue of charitable giving is not the most significant part.

Although I have heard it described by some people as undemocratic, because you can use philanthropic giving to effectively say, ‘I want my money to go to this issue, not where the government says it should go to.’ 

I’m a strong believer that philanthropy shouldn’t be an alternative to taxation. Taxation is the price we pay for a civilized society, as Keynes once said. It’s important that the tax responsibilities of government are fulfilled effectively, and doing that is separate from the philanthropic responsibility or impulse.