Charitable Philanthropy and the (Non-)Governance of Foundations

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In recent months, considerable public attention has been focused on questions of transparency and accountability of civil society organisations around the world. Grassroots and advocacy NGOs are especially being targeted for scrutiny, harassment and black-listing by various government agencies and the media.

Much less attention has been paid to the transparency and accountability of grant-making charitable foundations, which actually fund the activities of such grassroots organsations in many cases. Several recent media reports though have begun to highlight the problems associated with governance of such philanthropic foundations.

In August, during the recent American presidential elections, Donald Trump’s campaign raised the issue of influence-peddling by a close nexus between Clinton Foundations and Hillary Clinton. Investigations available in the public domain have since established that a vast majority of donors, especially big ones, were foreign governments and business corporations, all of whom had gained access to then Secretary of State Hillary Clinton. Donors included Russian uranium interests to Saudi oil magnates. Former President Bill Clinton, then Secretary of State Hillary Clinton and their daughter Chelsea were the main trustees of several inter-related entities.

Then came the media report in India in September that Rajiv Gandhi Charitable Trust had received donations from Zakir Naik’s Islamic Research Foundation (IRF) in 2011. Subsequent government action to ban IRF has further revealed that such a relationship between the two entities was not a one-off. The Trust was founded by Mrs Sonia Gandhi and her children; she and Rahul Gandhi remain trustees.

In October came  similar news from South Korea. At the heart of the present political scandal facing the incumbent president, Ms  Park, are two charitable foundations—Mir & K-sports. These two charitable foundations received nearly $70 million from big business groups in South Korea to promote culture and sports. Ms Park’s personal advisor and close friend for the past 40 years—Ms Choi Soon-sil—was the main promoter of these charities. The gathering political storm may result in the resignation of President Park.

These examples are merely those which have come to light in the public domain. How many other grant-makers have been operating in similar unaccountable and somewhat questionable fashion, not only in India but around the world? New corporate foundations and philanthropies are gaining momentum in many emerging economies. How such vast sums of resources are being mobilised, and then granted to other charities, is a matter of concern in many societies. The political-business nexus  between charitable philanthropies—large grant-making foundations and trusts in particular—and their ‘owners’ or founder trustees can only be understood if governance of such grant-making foundations is made more transparent and accountable in the public domain. Many Indians came to learn about the Tata Trusts, their charitable activities and their control over governance of Tata companies in the country only after media reports surrounding the sudden change in leadership of Tata Sons.

Philanthropies and grant-making foundations have important contributions to make in promoting social justice, economic well-being and participatory democracy. Institutional frameworks for transparent and accountable functioning of such grant-making, charitable philanthropies needs to be strengthened and modernised.

 

 Photograph from https://pixabay.com/en/give-and-take-road-sign-donation-556151/

 

 

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