Between 2001 and 2011 the number of non-profit charities increased by 25 percent. $316 billion was given away in 2012 in the United States alone. Yet inequality has grown, and nations are struggling to deal with a refugee and migration crisis.

This is part of what Peter Buffett, son of billionaire investor Warren Buffett and head of the NoVo Foundation, provocatively calls the “charitable-industrial complex” – and it may be perpetuating global poverty. Maria Armoudian spoke with Buffett about the charitable industrial complex and the concept of philanthropic colonialism.


Maria Armoudin: Let’s start with the idea that you wrote about in the book, so-called philanthropic colonialism. What exactly do you mean by this?

Peter Buffett: It’s interesting because the colonialist framework for me started when I was involved with the American Indian culture and learned all sorts of things historically about our country that I never learned in school. I got sensitive to the idea of a culture coming into another framework that they didn’t know or understand and essentially, in the case of America, trying to completely get it out of the way. So in a much milder form I started to hear stories about philanthropic work, and was guilty of it myself, where somebody would think, “Well this sounds like this would be the perfect answer to that particular problem”, while coming from the outside and having no [understanding of] the intricacies and nuances on the ground. So I guess I coined the term philanthropic colonialism. [Everyone] on the ground jump up and down in glee when they hear a funder say that because they know first-hand what happens when somebody with money comes into a place to say, “I’ll solve your problem for you”.

MA: What are some examples of the unintended consequences of this particular phenomenon you’re talking about?

PB: There was a very well-meaning attempt to stop the spread of HIV and AIDS in parts of India. [It often] gets spread through the brothels and through the red-light districts, so there was the idea of making sure condom use was widespread by distributing them… in the hope that they would be used. And the first real underlying problem that that does is it legitimises brothels and red-light areas. It says, “Okay, we’re just going to make them better”. But if you spend any time with girls that have been trafficked in these areas the last thing you want to do is legitimise it. So there is that layer of it. [The] next layer is the shifting pricing structure because of it; the girls will get paid more if they have unprotected sex. Now some people say, “Well, that must mean there is still more protected sex and isn’t that better because they’re getting more money[?]” [I say], “Not really: it is a much larger problem than that. That might be a little bit of a consequence. But the larger point is it’s legitimising the practice and putting these girls in even more complex situations that are not of their preference in the least.

MA: The other thing that I thought was really interesting was this juxtaposition of you getting to sit in on some of these conversations that you witnessed because of your dad and seeing the left hand creating the problem and the right hand trying to solve the problem. Who is creating the problem? Even though I think most of us have a sense of who you are talking about. But for those who don’t quite understand what you mean by that, who was in the room?

PB: It’s true that there is this tendency to say, “Tell me more”. This is the complexity of the world we live in today. When you’re in the room with any entity that is a global corporate enterprise, they’re the ones with the most money and therefore they are at these larger gatherings. These are well-meaning people. That is the other part that is often left out. No-one is doing this on purpose. But you’ve got shareholder value and quarterly returns and a drive to do things as efficiently as you can for all those reasons. That means that you might be degrading the environment, you might be offering lower wages and so there is poverty and hunger and all the things that go with that. There is a host of issues that accompany any corporation that is trying to serve its shareholders the best it can, while on the other hand it is creating issues on the other side of the globe around wages, environmental issues, health issues, and all sorts of things. So when the foundation side of this particular company, or a foundation that has its corpus invested in these companies, there is another whole layer to this [where] it might be a foundation head doing the best they can, meanwhile they’re making money to do good by investing the very dollars in a corporation that is undermining them and the work they’re trying to help solve. So there are these various layers where the one hand is creating the issue that the other is trying to solve or make better in some way.

MA: Never mind that all of our pensions are connected as well into these problem making systems?

PB: Well that is the thing; it is so inextricably linked. The truth is people are clamouring for jobs [while] insisting at their local Target or Walmart for lower prices. Those are inextricably linked, and you’re going to end up with jobs going overseas and creating other problems because of that to get the lower prices which then put people out of jobs.

MA: You noted in your op-ed piece that while inequality is rising the non-profit sector is growing?

PB: Correct, and people have pointed out that. It stayed about two percent of GDP since the Seventies. But it still is true that there is more affinity groups and gatherings and it’s definitely talked about a lot more and practiced, I think, quite a bit more by high profile people than it was in the Seventies. There is a whole different kind of lens on philanthropy today than there was twenty or thirty years ago, or more.

MA: You’ve said that in a way this is conscience laundering that keeps this system in place and it just perpetuates the injustice.

PB: I think it does, because people thought, if you just look on the surface of the piece, that I was indicting philanthropy as this awful thing. What I’m really saying is… that it is part of the systemic problem, it somehow gets a pass because it’s doing good things. I’m not saying it’s the problem, I’m saying that there is a lot of symptoms that show up because systemically there is something, I think, deeply flawed in what is going on right now.

MA: How many of those meetings did it actually take for this to dawn on you?

PB: That is a great question because we have been working in the philanthropic world at the scale we have for the last seven years This philanthropic colonialism concept came out early on, within the first year or so [of me] saying that. And then you start piecing the puzzle together by going places, experiencing things, and talking to more people. I went to the first Clinton Global Initiative in 2005 and learned a tone, it was life-changing in some ways in terms of our focus. So there is value as well as starting to observe the complexity of the whole thing. But it was over the seven years and then finally it all kind of clicked.

MA: Some of the means that these charities are approaching what they think will create sustainable economies like microlending and financial literacy might just be what you said feeding the beast. Do you think that it is? 

PB: It can be. I think that some of the practices and the idea of, “Let’s just get people into our economy” is very destructive. It’s interesting how a lot of people will say we’ve got to get people living on more than two dollars a day. Well, who wouldn’t agree with that? Except I would flip that on its head and say we should all get closer to living on two dollars a day. And that is extreme, but the idea is that it’s not about pulling people into this economy. We should think about how [we can] all get back to a more community-based decentralised relationship economy that is fundamentally very different than what we’re looking at today. I do not understand why anybody needs billions of dollars and multiple houses and boats and all this crazy stuff. When I was a kid it was, “Finish your dinner, there is someone starving in India” or something [like that]. Now we see these people, they are real, they have stories, and this is no longer something we can put under the rug.

MA: Your dad is one of the most successful, if not the most successful investor, [having made billions]. Have you talked with him about this? What is his response?

PB: I was a kid during the sixties in the Civil Rights movement, and my parents were both active and involved and deeply caring people. In fact my dad knew then when he was much younger and didn’t have the kind of money he [has] that he had a particular talent that would probably make him a lot of money. That was an understatement. But that is what he said. He certainly knew that early on and knew that it should go right back into the world that helped him do what he loved every day, because for him it’s not, “Look at all this money, now I can buy all this stuff”. It’s like, “Wow I love going to the office six days a week doing what I do, all this money seems to be piling up. I want to give it away to the society that gave me this great gift of doing what I love”.

MA: And he has been doing that. As you said, he has set up these foundations and he’s donating his money in very large chunks back to society, and he pays his staff very well.

PB: Yeah, he is a fair guy, and the people will say, “Well, oh you know, he just doesn’t want to pay taxes”. Even if he had to pay whatever rate on it, he’d still do the same thing. It’s the gesture of saying, “Look, I am so fortunate that I was able to do what I love every day”. back. It’s pretty simple.

MA: Let’s move to your own foundation and link it into one of the directions that you are trying to go in. You said, “I don’t know that I’m really calling for an end to capitalism itself, I’m calling for humanism.” But given the structures of these things that you’ve noticed, and I’ve noticed as a political scientist of modern-day capitalism, how can humanism be infused when it’s part of the legal structure itself?

PB: That is a great question… I didn’t want to get into the economic structure debate because I knew that there could be one, and I think there should be one, but I wanted to bring it around [from] transactions to relationships. We have lost that over the past hundred years. All of this stuff is new, they are only a couple hundred years old. So we’re learning as we go, and instead of drawing fire by saying specifically, “This is a flawed structure”, I’d rather say, “This is a systemic problem”. Let’s look at [the] various pieces to the puzzle and find an answer that results in relationships, humanism, putting the person first before the best return on investment, essentially.

MA: Let’s move to the NoVo Foundation that you are co-chair of and what it is that you are trying to do with that. I looked at your mission statement, it’s quite profound really to foster transformation from a world of domination and exploitation to one of collaboration and partnership.

PB: If you are going to do it, you might as well go for it as far as we’re concerned. And Jennifer and I both really thought that we’ve got to get back to knowing our [neighbours], knowing ourselves, knowing our community. How do we do that? Because what I found is that if you look somebody in the eye you start to have a different feeling about things than if they’re under the rug or non-existent. And if you knew who your banker was, if you knew who your farmer was, if you knew where these things came from and had relationships – which has been going on for thousands of years – I think we’d have a different world today. Basically I think we’d have something where there hopefully was no need for charity, that the root word of philanthropy which is the love of people is really what we’re going for. So we figured, why not hang that out on our shingle?

MA: Let’s talk about some of the ways that you’re doing that. One is you’ve got a focus on women and girls in particular. First of all, what drew you to focus on women and girls, and what are you doing to support their development and potential?

PB: [For] a couple of reasons. One, only a girl will be the mother of every child, no one argues with me on that point. So when you do support a girl in terms of health, education, and all these possible ways you’re going to support a whole next generation, boys or girls, because it really isn’t ultimately about one gender or the other, it’s about everybody. [Focusing on girls] is a faster way to get there, it’s a more efficient way to get there. If you’re going to support a girl, you look in the aid world, the development world, and where the dollars are deployed, they rarely are deployed to a young girl or a young woman. [If it does] it will stay in the family, in the community – it just has a different outcome generally than it does if you give it to an institution or to a man. So you add the efficiency with the fact that she is going to be the mum and it’s going to stay in the community and you get a better result.

MA: And you also said that there are people showing examples of these other ways to live, these other kinds of communities that truly create greater prosperity for all, what are some examples?

PB: We’re only trying to create conditions for change, we are not sure how change is going to come and we’re not going to try and define what it looks like, but we are going to try and create conditions. So we work with various projects around local living economies and ways to foster a shift back to a decentralised, more of a relationship-literal economy in terms of people that are working on different frameworks around the money system. This is mostly old stuff just renewed in terms of how communities can be more resilient. [The 2008 financial crisis] helped us, that was in our favour sadly, but in a good way. It made everybody look at their neighbour and go, “Oh, maybe this is where I should focus my money, in a bank that doesn’t know me, or my food from a farm that I’ll never see, or these various components to my life that are the lifeblood relief of my daily existence”.

MA: Does the title of your book “Life is what you make it” [match] the structural and systemic realities that you’re criticising?

PB: It’s interesting because what I’m really trying to do is reframe or rediscover the real meaning of words, and the first one is probably “privilege” or “wealth” or “success”. And I then go into telling my story, which is I grew up in Omaha and I went to a public school and I had the same English teacher my mother had, and all these things were a privilege, growing up in a neighbourhood of people who knew you and loved you and nurtured you and made you feel safe. So it’s really trying to get back to what makes us whole as opposed to the mythology around who I must be, where it’s all about the money and isn’t it great to be rich. I joke about the fact that I only recently became Warren Buffet’s son. Nobody really cared or knew and that is great. That allowed me to live my life without my dad’s help in terms of financial stability or something. I talk about how self-respect comes from earning your own reward. If I had a dad that wrote me a check every time I fell down I wouldn’t know how to get up. So it’s really a book and a message around essentially redefining certain concepts around what privilege really is, and that it’s all about figuring it out yourself as opposed to somebody doing it for you.

MA: Yet when you talk about the systemic issues, people who don’t grow up in the safe neighbourhood or people who don’t grow up with that sense of safety and community and are exploited would struggle with that.

PB: Absolutely. I actually wrote a blog about that because I sat down with some girls who were sold into sex trafficking early on and I said. “How do you say life is what you make it as somebody like that?” And you don’t. You listen and you learn and you’re trying to figure out how to shift systemically what is going on in whatever way one can. My wife and I are fortunate that we might be able to do things others can’t, but you never know where it could come from. There are way too many people that can’t say “life is what I make it” – there is no question about that. So I am definitely addressing mostly people with money, kids regardless of the university level. I do a lot of shows there and the whole idea is do what you can with what you’ve got to make this world more equitable for all. No question.

Peter Buffett has an acclaimed career that spans more than 30 years as an Emmy Award-winning musician, composer, philanthropist and author. He co-chairs the NoVo Foundation, one of three foundations founded by his father Warren Buffet. He is the author of Life Is What You Make It: Find Your Own Path to Fulfillment

This interview was originally aired on the Scholars’ Circle. Find more here.