Philanthropy’s History Full of Hackers, Not Hacks

Written by: Ryan Schlegel

Date: December 17, 2015

This summer, social media mogul Sean Parker wrote in the Wall Street Journal about all that makes Silicon Valley philanthropy different from the philanthropic mainstream. Heralded by Inside Philanthropy and The New York Times as a new “manifesto” for tech wealth philanthropy, his piece was greeted mostly with praise. After all, his theory of philanthropy – that we should make risky “big bets” to create change, and that “hackers” like him should use the tech expertise and irreverent worldview that made them rich to change the world – is mostly aligned with the popular strategic philanthropy movement.

But it is possible to arrive at the right conclusions based on flawed premises. By setting Silicon Valley philanthropists apart from their industrial magnate ancestors and dismissing the “largely antiquated institutions” that make up mainstream philanthropy, Parker did a disservice to the sector’s rich history and the agile, innovative foundations often at the vanguard of social change.

Parker starts his piece by describing a “new global elite” whose fortunes have risen in the last 30 years along with advances in telecommunications, social media and personal computing. As the young upstarts behind the companies that revolutionized the global economy have matured, they have begun to divert their energy and their wealth to philanthropy. They have built a philanthropic empire based in Silicon Valley with global reach. Parker is right to emphasize just how immense this philanthropic tidal wave is. The Bill and Melinda Gates Foundation, for example, is larger than any other foundation in the world by orders of magnitude – and it didn’t exist 20 years ago.

But some of Parker’s assertions are hard to justify, particularly that “this newly minted hacker elite is an aberration in the history of wealth creation.” He says he and his cohorts became fabulously wealthy at a young age, and are “intensely idealistic.” They are problem-solvers who look for a “clever hack” for every social ill. All this, Parker claims, brings the new tech philanthropists into conflict with the “strange and alien world” of stodgy, entrenched foundations of the likes founded by Carnegie and Rockefeller a century ago.

But how different is this hacker mindset, really, from that of their heavy industry forbearers? Both Carnegie and Rockefeller achieved great success in their younger years. At 31, Rockefeller owned the largest oil refinery in the world. At 26, Carnegie was the national Superintendent of the Military Railways. Both were intensely idealistic. At 33, Andrew Carnegie had already put in writing the ideals that would become his famous Gospel of Wealth, and at 47, Rockefeller provided the money to found Spelman College, just the first in a string of visionary investments motivated by his radical abolitionist family roots. Today’s generation of tech entrepreneur philanthropists share a passion for iconoclasm and tackling global issues with new ideas that was at the heart of American philanthropy’s founding generation a century ago.

Parker’s manifesto goes on to lament the sclerosis of modern institutional philanthropy, and positions hacker philanthropists as the ones to cure it. Philanthropists talk about impact, Parker says, but they “seldom have the tools to measure it” and trade mostly on “recognition and reputation, not effectiveness.” He scolds philanthropists for too often favoring “safe” gifts over radical risk-taking. But this blanket condemnation ignores the bold work being done by leading progressive foundations like the Ford Foundation, and the advances in measuring social change work many of them have pioneered. Atlantic Philanthropies’ gargantuan investment in health care reform was a mixed bag, whose effectiveness was measured against a theory of change with a generous timeline and tolerance for risk. Their success at helping push the Affordable Care Act over the finish line – and the successes experienced by other progressive funders taking big risks to effect social change, such as The Gill Foundation’s work on marriage equality and the foundations that helped pass Prop 47 in California – challenge Parker’s pessimism about the philanthropic sector.

It’s crucial that we in the social sector understand our history, and that we approach our future work with a clear understanding of the landscape of social change. Parker’s hacker philanthropy manifesto rings true insofar as it encourages the new titans of tech philanthropy to take risks and think big. But if his ethos of giving ignores the goals and strategies it might share with the “establishment” philanthropists Parker derides, it risks chasing hackable problems and revolutionary solutions at the expense of the people actually affected by injustice and oppression.

Ryan Schlegel is research and policy associate at the National Committee for Responsive Philanthropy (NCRP). Follow @NCRP on Twitter.

CC image of Sean Parker by JD Lasica. CC image of bust of Andrew Carnegie by Ross G. Strachan.