The End of Philanthropy
Nan Ransohoff, Head of Frontier and Climate at Stripe, is one of the most influential figures in global philanthropy: you know when, whilst making an online purchase, we’re asked to add a few euros to the total to offset our carbon footprint? We’re buying from one of the many companies that use the Stripe payment platform and have accepted Ransohoff’s proposal to participate in long-term CO₂ removal.
In a recent article predicted a third phase of American philanthropy driven by the enormous amount of money that AI will make available. Adding together the assets of the OpenAI Foundation, which owns 26 per cent of the company, the donation commitments made by the founders of Anthropic, and the employees’ DAFs (donor-advised funds), the total capital is estimated at $370 billion. Assuming, conservatively, an annual disbursement of 10 per cent of the capital, this would generate a flow of $37 billion a year, more than double the disbursements of the Gates Foundation; if we assume an increase in the value of the shares and a higher percentage of disbursements, the figure rises, according to Ransohoff, to $100 billion. Today, the annual flow of American philanthropic donations amounts to $600 billion.
The third phase followed on from the first, which emerged at the turn of the 19th and 20th centuries thanks to industrial giants such as John D. Rockefeller, Andrew Carnegie and Henry Ford. Andrew Carnegie, in his book *The Gospel of Wealth*, established the principle that it is more effective for an entrepreneur to manage their philanthropic activities directly whilst still alive; Rockefeller put this principle into practice by entrusting the leadership of his foundation to Frederick Gates, the first professional philanthropy manager. The second phase, which began in the 1990s, was led by the founders of the digital and internet era, with Bill Gates as its emblematic figure (Bill & Melinda Gates Foundation): this phase focused on rigorous data measurement, cost-effectiveness analysis (‘effective altruism’) and the global scalability of results.
What is changing now? Available capital has accumulated rapidly; the focus is now on future global threats, such as the impact of AI and biological and climate-related disasters, whereas in the past it was on poverty and disease; foundations are integrated into the corporate structure and are not set up at the end of a career: in this context, the bottleneck becomes the operational capacity of the philanthropic system to utilise the available capital effectively.
Ransohoff argues for the need to create a new ecosystem comprising funders – such as OpenAI or Anthropic employees; capital allocators – intermediaries that distribute capital, such as the OpenAI Foundation, existing professional foundations and ad hoc family foundations; ‘builders’ – start-ups launching initiatives to solve the problems on which this new form of philanthropy focuses. According to his calculations, managing 50 billion will require around 5,000 new professionals capable of assessing, approving and monitoring approximately 50,000 grants per year; and, finally, thousands of ‘major founders who will create large organisations’ capable of deploying the capital made available to effectively solve the identified problems.
