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The tech titans wont beat disease itll be the little people

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Facebook founder Mark Zuckerberg and his wife Priscilla Chan may feel good about donating $3bn to medical research, but its a drop in the ocean

So, is $3bn a lot of money? Of course it is. Is $3bn enough to banish or manage all disease in the world within the next 84 years? Of course it isnt. Mark Zuckerberg and Priscilla Chan have announced a plan to invest 3bn in medical research over the next 10 years. They claim this sum will enable them to play a key role in curing, preventing or managing all disease by the end of this century.

In comparison to what governments spend on basic medical research, $3bn is, of course, a negligible amount. From 2015 to 2016, the UK government is investing 5.8bn in science and research funding. Making a conservative assumption that this amount stays broadly stable for a decade the government will have contributed 58bn (or $75bn) towards science and medical research during the same time-span that Zuckerberg and Chan have pledged $3bn.

Then theres the US government. Most of its basic medical research is channelled through the National Institutes of Health (NIH), federally funded health institutes that have been responsible for some of the biggest medical breakthroughs in history. The NIHs budget from 2014 to 2016 was more than $30bn annually $90bn in three years. Assuming this stays fixed, the US government will direct more than $300bn towards medical research and science over the next 10 years.

Zuckerberg and Chans hearts might be in the right place. They may genuinely believe that their money is exceptional, that their pledged $3bn is imbued with some sort of entrepreneurial elixir that will magically transform the figure from what it represents in reality less than 1% of the US governments budget for health research to what they proclaim their money will do: render disease obsolete by 2100.

But there are justifiable reasons to treat their proclamations with scepticism. Not from a place of resentment or a Scrooge-like dislike of charity, but because the refusal to examine the plausibility of their claims risks a disservice to the millions whose charitable donations amount to a sum that is far greater than what US tech billionaires contribute.

The vast majority of charitable expenditure in the US comes from the millions of poor and middle-income citizens scrimping and saving and putting aside proportionally more money from their take-home salaries than the US rich contribute as a ratio of their incomes.

The first reason to temper the hype around Zuckerberg and Chans gift is the obvious: it hasnt been spent yet. Its a mere pledge. And there are precedents for not taking philanthropists at their word when they vow to surrender their fortunes.

The last 10 years have been littered with examples of philanthropists reneging on promised billions. Richard Branson made a much-publicised pledge in 2006 to spend $3bn on clean energy technologies over 10 years . By 2014, as Naomi Klein reported, his outlay was less than $300m.

Chan and Zuckerberg may well be acting in good faith. They seem sincere. And its touching the way they speak about their daughters life and the way she inspires them.

But theres also reason to worry well never know how much money theyre actually contributing to charitable causes, regardless of how many press conferences or TED talks were treated to over the next decade.

The entity they have established to disburse their wealth the Chan Zuckerberg Initiative is legally insulated from the disclosure requirements that traditional US philanthropic foundations face. We may never know and we have no legal right to know whether any of the promised money is actually going to charity at all.

Bill
Bill Gates, the Microsoft co-founder, with his wife, Melinda, at a meeting in 2011 with villagers in Jamsot, near Patna, India. Photograph: Aftab Alam Siddiqui/AP

How is this possible? Because the Chan Zuckerberg Initiative is a for-profit limited liability company. By establishing such a vehicle for their giving, the couple are legally able to direct all of their so-called philanthropic gifts towards for-profit investment ventures. They could legally offer an unknown amount to, say, a golf buddy to set up a string of fast-food franchises and then brand this venture as charitable even when its not.

This might seem outlandish, but there are plenty of precedents to suggest that it could happen. The last 20 years have seen the philanthropic landscape shift in strange ways, permitting the unfathomable to become commonplace with unclear benefits for the most impoverished people living in wealthy nations and for those in poor countries.

The biggest change in philanthropy has been the emergence of something that the sociologist Darren Thiel and I term rich-to-rich giving. Increasingly, philanthropists such as Bill and Melinda Gates are choosing to offer massive, non-repayable charitable grants to some of the worlds wealthiest corporations, driven by the assumption that enriching already rich companies will lead to trickle-down benefits for the poor.

Scholastic, Mastercard, Sanofi these are just three companies picked at random from the Gates Foundations public registers of grants disbursed over its 16-year existence. In Scholastics case, the Gates Foundation offered millions to the company, positioning it to profit handsomely from providing educational materials to high schools; when it comes to Mastercard, the money is aimed at helping the credit card company to expand its business operations in Nairobi; in Sanofis case, on medical research towards underfunded diseases.

Pharmaceutical R&D, education materials, expansion in Nairobi these are just causes, but are the recipients worthy of the gifts, given how little financial risk theyre actually assuming? In each of these cases, the money was a direct grant with no onus on the companies to repay the donations, regardless of how profitable the grants become.

Even as corporate America shirks from its tax obligations, lobbying for ever greater tax exemptions across the world, corporate populists like the Gateses seem determined to reward highly lucrative pharmaceutical and credit card companies with free money.

The economist JK Galbraith used to scornfully compare trickle-down economic policies to what he described as the horse and sparrow theory of economic growth: the idea that if you feed the horses enough oats, something will pass through to the road for the sparrows.

The new philanthropist kings are generous with their oats. The horses are certainly well fed. But what about the sparrows? Remarkably, even as wealth gaps between the rich and the poor grow more alarming, even as average wages stagnate, the unsung multitude of everyday citizens manage mini-miracles of giving every day.

In 2014, Americans gave more than $350bn to charity. It was the highest total amount in 60 years. Of that amount, foundations such as the Gates Foundation cumulatively offered only 15%. The vast majority 72%, more than $258bn in total came from individual donations. And of those individuals donations, a great deal came from those who could afford to give the least. For decades, study after study has shown that lower-income Americans give proportionally more of their incomes to charity than do upper-income Americans, as Judith Warner has pointed out in the New York Times.

And thats on top of what citizens already contribute through simply paying their tax. Its the struggling sparrows bolstering the budgets of bodies such as the National Institutes for Health, leading to impressive gains in life expectancy, in drops in global maternal mortality, in major breakthroughs in HIV/Aids research, in improvements in cutting malaria and polio deaths.

Yes, wealthy philanthropists have contributed. But if you look at what governments spend on medical research, gifts from individual philanthropists stack up in only the tiniest way.

Read more: https://www.theguardian.com/technology/2016/sep/23/mark-zuckerberg-priscilla-chan-bill-gates-charity-philanthropy

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