We need to find new, more effective ways to tackle the social challenges of the 21st century, based on innovative partnerships between business, philanthropy and government — what we call philanthrocapitalism.
This movement has been gathering momentum, as wealthy entrepreneurs and business leaders take the initiative in finding solutions to problems that once were the preserve of governments. Bill Gates, the American posterboy of the philanthrocapitalist movement, has quit Microsoft and pledged his time and fortune to doing good. Armed not only with money but also with influence and business nous, Mr Gates has jump-started efforts to prevent a million deaths every year from malaria. Governments and the United Nations have been talking about this for decades. With Mr Gates’ shoulder to the wheel, this is looking like a realistic possibility.
Philanthrocapitalists such as Mr Gates can cut through the risk aversion, lack of imagination and short-termism that plague government initiatives. What is striking about Mr Gates, however, is that he is not trying to tackle problems on his own — he understands that the big prize is using his giving to make government work better. He is ploughing hundreds of millions of dollars into fixing America’s failing school system, in the full knowledge that this is a drop in the ocean compared with public funding. He is making a big difference, however, by using his money to support the Obama Administration’s reforms by testing and piloting initiatives that government can take to scale.
Giving has long been part of the American social model, whereas for most of the past century Britain has relied largely on the State. Britain’s economic crisis is, however, an opportunity to accelerate change. Thirty years of market reform has been good for Britain’s rich and our society has become more unequal. We need to rewrite the social contract between the rich and the rest, to make giving a vocation for those who succeed in our economy.
The winners of capitalism, individuals and companies, need to recognise that they have a responsibility to the rest of society, not merely to pay their taxes. Philanthrocapitalists think that the winners from our economic system should give back. Starting with the areas most vulnerable to public-spending cuts — universities, the arts and overseas aid — our political leaders should be setting out a plan for how private giving can not only plug the gaps left by reduced government expenditure but also harness the skills of our successful entrepreneurs to reinvent the way in which our country is run.
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? Matthew Bishop and Michael Green are the authors of Philanthrocapitalism: How Giving Can Save the World (£9.99, published by A&C Black on January 25) www.philanthrocapitalism.net