Philanthropoidism

Which do you like least? Generosity or selfishness?

Perhaps the answer does not need to be that polarized. Most people like to think they are generous. And, most people do think more about themselves than they do about others. Still, many people strike a fair balance between the two and make the best friends and neighbors.

People who like to be widely known as ‘the anonymous giver’ tend to be more interested in their agenda than that of the recipient.

People who are super modest about their generosity often have a special agenda like avoiding becoming an attractive source from a world full of solicitors. Or, they think their modesty might suggest that they gave more than they really did.

What all this speculation is about is the peculiarities that come with the general subject of philanthropy. Big foundations attract awe and some jealousy from normal people because they often deal in such large sums that the numbers seem unrelated to normal people and the process they employ to decide what to give to is mostly pretty obscure and protected by institutional privacy.

What is not much known is how foundations work.

A foundation can be established several ways by a big tax exempt gift from people or a corporation, by a trust or will. Then a board of trustees/directors selects a CEO who in turn, presumably, with guidance from the board, hires smart, well educated people with some relevant experience in the topics the board is interested in helping.

Then those staff people, who, of course, come with their own circle of friends and experts, go to work and make choices of what they think the foundation should support. And, most foundations give great latitude and discretion to those staff people and their recommendations, which almost automatically become grants.

Those staff people truly believe they are acting objectively and in good faith — and in the main they are BUT that is where philanthropoidism kicks in and can become a difficult problem for both foundations and the people and projects that need their help.

Philanthropoidism — which is not in the dictionary — is a mental condition/attitude that arises when a normal person is endowed with the power to give large sums away (which they had no part in creating) and that person has canvassed his/her experts and thought it through carefully THEN becomes convinced of his/her certitude. Sometimes critics refer short handedly to such folks as ‘smart asses’, which, of course, is not their fault but the fault of the system that put them in that enviable/unenviable situation.

So what, you may think and say?

There are ways to deal with this kind of problem, though they all would require some administrative process. One would be some kind of limited appeal process for aggrieved applicants. Another would be to have peer review of all grant recommendations before they are final. Yes, some back scratching could occur but the singularity of the big P disease would be diluted and ‘favoritism’ could be minimized and reduced.

The larger relevance of this subject is to reduce the tendency of foundations to move in crowds and not be as open to new ideas, thinking and people as they could be to open up social and economic innovation which is so important to improve our modern society.

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A New, Risky Form of Protectionism

In the 1930s, the world fell into a serious, long-lasting depression fueled in large part by counterproductive trade wars.

As economies struggling to stay afloat began to erect trade barriers in the form of tariffs and quotas to “protect” their industries and jobs, one after another — tit for tat — a downward spiral took hold around the world and the overall level of world trade fell in the first three years of the 1930s by almost half.

Few people alive remember those days and the how and why of the consequences that followed.

Yet today most economists and politicians know that “protectionism” is a very dangerous game to play even though there is frequent pressure from labor to “make exceptions.”

The exceptions always are causes that are popular because there are US jobs pains involved. Luckily there are other ways to address those pains in most cases and trade wars have been largely avoided in recent years.

Now comes Russia misbehaving in a variety of serious ways and the US and Europe have reached into a grab bag of trade tools to seek to pinch Russia to behave better. Those tools are various forms of trade sanctions and pressures. Surprise, surprise the Russians are now reaching into their bag of tricks with tit for tat to discourage Europe and the US. The result is that Germany and most of Europe are feeling a counter pinch at a terrible moment for their economies.

And, most recently Russia has passed a law to give them carte blanche to seize any foreign owned assets. Such a step, if implemented, would surely discourage foreign investors for a long time to come.

The point is that “protectionism” either for trade/job reasons or national security is a dangerous game that most likely will end up hurting everyone involved more than the basic problems that led to that type of economic warfare.

Domestic support for jobs is always important. US support for efforts to reign in foreign misconduct in the national security arena is always important.

But, at a minimum we should be fully cognizant all the time that we are struggling with tied and competing problems.

Either we need to find or create new tools to deal with all forms of protectionism OR we must be especially careful how we use today’s tools.

At the moment we are treading on very thin ice. With Europe already sagging economically, the U.S. may not be far behind.

And, we must remember that our most potent global weapon is not the Pentagon, but our economy.