Warren Buffett's Son Just Denounced Philanthropy

I imagine there are an awful lot of people who are not too happy with Peter Buffett right now. As the son of Warren Buffett, one of the wealthiest men and biggest philanthropists in America, the younger Buffett runs in precisely the circles he criticized in his recent New York Times op-ed, "The Charitable Industrial Complex."

The portrait Buffett paints is not a flattering one. He calls out wealthy people who engage in, “conscience laundering — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.” The problem with this, Buffett explains, is that it, “just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over.”

Buffett cites the booming nonprofit industry ($316 billion was donated in the United States last year, and there were more than 9.4 million nonprofit employees) and increasing inequality as evidence that our philanthropic model is broken.

Don’t go putting away your checkbooks just yet. Buffett has a valid point; oversimplified, one-size-fits-all approaches that ignore the nuances and cultural sensitivities are unlikely to solve anything. The top-down systems that many of our global stakeholders (including the IMF and World Bank, to name a few) have put in place are not helping create a sustainable model for economic success, and may even be contributing to the problems of poverty and global inequality.

But it would be a mistake to interpret that as an indication that we should stop our charitable giving. For one thing, there are a number of organizations doing amazing work that would not be able to survive without the generosity of donors.

I’ve seen and been impacted by much of this work firsthand. I tutor a young woman through The Boys and Girls Club of America. The organization paid for many of her college applications, and awarded her scholarship money that enabled her to attend the University of California, Riverside. My own education was thoroughly enriched by the University of Colorado, Boulder’s two-year INVST leadership program, which focused on experiential learning and training for environmental and social justice.

Buffett’s critique of the charitable-industrial complex is oversimplified, much like the policies and practices he condemns. His argument doesn’t acknowledge that many organizations are working from the ground up with their communities to create solutions to fill needs (in education, family planning services, and journalism, to name a few) that aren't otherwise being addressed.

Buffett seems to forget that every issue has another side, and that the opposition is often looking for any advantage to slip ahead and push its agenda. In 2008, many Californians who supported gay marriage were complacent about Proposition 8 because polls suggested that its defeat was imminent. An influx of funding from Utah and the Church of Latter Day Saints then gave the bill the push it needed to barely pass into law.

No matter our individual political leanings, we have a responsibility to make intelligent, informed decisions about what we support with our beliefs, words, and our money. Fortunately, we have tools and information to help us navigate the process.

Buffett’s is an important voice in a conversation that will hopefully lead us toward a more effective model for economic development and philanthropy. But don’t think for one moment that it gives any of us permission to stop doing our part by contributing to the causes we care about.