Thoughts on Philanthropy

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People are buzzing about Peter Buffett’s recent New York Times Op-Ed, which takes a thought-provoking look at the failures of the “charitable-industrial complex” in solving our biggest global challenges.

New York TimesOne of Mr. Buffett’s most provocative observations is that philanthropy has become a self-perpetuating growth industry because government, businesses and nonprofits are “all searching for answers with their right hand to problems that others in the room have created with their left.” I take his point. Too many philanthropic and government dollars are spent fixing problems that government created in the first place. Those of us in the civil legal services world have been tackling this issue for decades. For example, government funding supports our health law practice, in which NYLAG attorneys spend a lot of time appealing denials of Medicare/Medicaid benefits for clients who need and are legally entitled to them. If our healthcare system was in better shape, we would not need to intervene. Similarly, we have seen a huge need for civil legal services in the wake of Superstorm Sandy, driven in part by limitations in the government‘s system for reimbursing victims of natural disasters. By correcting flaws in these systems at the source, we could alleviate suffering and become more efficient in the process.

Mr. Buffett also questions whether philanthropy’s role as today’s “it” vehicle for fixing the world’s ills, arm-in-arm with the application of business principles like “Return on Investment,” is really valid. His candor is wonderful, and he forces us to think about which methods of measurement can and cannot be applied to alleviating injustice and human suffering. While I agree with many of his points, I do think that a business perspective and solid metrics are valuable tools to create effective public-private philanthropy. It is important that we find a common language to understand why some programs are more effective than others. Entities like the Robin Hood Foundation and our own Mayor Michael Bloomberg are great role models for doing good, and doing it based on business models of measured growth, accountability and innovation.

Mr. Buffett ends his Op-Ed by admitting that he is not really calling for an end to capitalism to solve the problems of inequity and poverty, he just wants it leavened with a good dose of “humanism.” In fact, he uses the language of finance to envision an imaginative new beginning: “Foundation dollars should be the best ‘risk capital’ out there.” From my perspective, one way to do this is to recognize that civil legal services bring enormous value to major poverty-fighting initiatives. Building free legal services into the ground floor of these programs can prevent a host of problems from appearing down the road, dramatically increasing the impact of health, welfare, employment and other efforts.

Since capitalism isn’t dead, I might add that from an investment standpoint, civil legal services deliver a return on investment of six dollars for every one dollar spent. More importantly, though, at the human level, these services can keep the roof over a vulnerable family’s heads, put food on their table, and provide them with access to life-saving healthcare.

Blog Post by Yisroel Schulman
President & Attorney-in-Charge

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