Impact Investing and Venture Philanthropy’s Role in Sowing the Seeds of Financial Opportunity
Gates and other venture philanthropist’s have ‘pioneered’ and ‘seeded’ new education markets through direct funding and by shaping ‘education reform’ policies. Charter schools are an essential component of this mission… allowing impact investors to be the drivers of the education reform industry’s final mission: to fully dismantle public education by way of “anywhere, anytime learning” and “personalized” technologies.
In the late 19th century many U.S. industrialists – Andrew Carnegie, John Pierpont Morgan, John D. Rockefeller and others – who amassed immense wealth through the exploitation and degradation of workers (including children), began to establish philanthropic trusts and foundations. Oil monopolist John D. Rockefeller (senior) described this social mission as a divinely inspired “business of benevolence.” Accordingly, historian Benjamin J. Soskis reports that Rockefeller declared in 1906:
I believe that the power of making money is a gift from God… I believe it is my duty to go on making money and still more money, and to use the money I make for the good of my fellow man according to the dictates of my conscience.
As such, philanthropists of this time channeled charitable gifts to civil society and aid-based organizations charged with facilitating the cultural reproduction of American values derived from the Protestant ethics that sustain U.S. capitalism: individualism, self-reliance, hard work, meritocracy, discipline and obedience. In terms of the benevolent role of philanthropists during this period, Soskis frames it this way:
This conflation of the obligations of business and businessman was encouraged by the concept of stewardship, the dominant means by which Americans understood the responsibilities of wealth in the nineteenth century. By the dictates of stewardship, men could not claim ultimate ownership over their possessions, but held them only as trustees for some higher authority—in the concept’s Protestant manifestation… By bridging the realms of accumulation and redistribution, stewardship linked provisional property rights with the responsibilities that attended those rights. Stewardship provided a bridge between the imperatives of service and self-interest, a causeway over which proponents of corporate philanthropy would make their unsteady way in the decades to come.
Through this doctrine of divine providence, these charitable “Captains of Industry” advanced everything from universal public education, immigrant assimilation and poverty mitigation to the arts, public health and science and medical research. Naturally, this giving came with a social engineering agenda. For example, as documented in my article “The Despotic Origins of Public Secondary Education,” their financial and political support for universal public education was intended to bolster U.S. hegemony, by furthering U.S. industrial capitalism’s imperialist pursuits as tied to the nation’s foundational structures of heteropatriarchy, white supremacy and settler colonialism. Relatedly, the article goes on to document how:
At the turn of the 20th century, capitalism’s proclivity for crisis was fomenting rebellion within the U.S. through massive labor strikes, struggles for universal suffrage and relief from poverty as a major depression gripped the nation due to overproduction. In response, the nation’s political and economic elite significantly expanded U.S. pursuits of overseas markets for American goods and investment capital… [rationalizing] U.S. military intervention. These events required the intensification of the social control apparatus of U.S. nationalism – well oiled by its highly effective and profitable role in the conquest of North America – as a means [in part] to deflect attention towards an external “threat.”
Thus, this tycoon driven endeavor served the ideological and practical social mission of cultivating greater social cohesion (i.e. social control) when the nation’s undemocratic design was increasingly unambiguous and insurrection was presenting a clear and present danger to its foundational social order.
To achieve these aims on a more structural level, Prussian inspired common schools established in the 19th century served as the model for the establishment of compulsory secondary education in early 20th century America. According to these altruistic “stewards” of the public good, mass public education needed to be standardized, vocational and efficient as a means to serve their larger “social mission” of preparing students for their future roles in the 20th century industrial workforce. This philanthropic agenda was made explicit in 1914 when the National Education Association passed a resolution that read, in part:
We view with alarm the activity of the Carnegie and Rockefeller Foundations—agencies not in any way responsible to the people—in their efforts to control the policies of our State educational institutions, to fashion after their conception and to standardize our courses of study, and to surround the institutions with conditions which menace true academic freedom and defeat the primary purpose of democracy as heretofore preserved inviolate in our common schools, normal schools, and universities.
Fast forward to the 1990’s when “venture philanthropy” emerged, shifting the social mission of philanthropy to focus on neoliberal structural adjustment programs, which dictate austerity measures in the service of elite financial investors. Since philanthropic foundations are established and controlled by billionaires whose wealth and power is derived from human exploitation and environmental degradation, this modern pursuit should not come as a surprise. The personal interests of this opulent minority are directly tied to today’s financialized economy as investors and as members of politically influential networks that oversee global financial markets. As such, in the 21st century venture philanthropists have focused their efforts on constructing new financial markets through what is referred to as “mission investing,” “social impact investing,” or just “impact investing.” Impact investing is a continuation of the sixty-year colonizing mission of the IMF, World Bank, World Trade Organization, “Troika” and the United States government; yet with a “friendlier,” but more duplicitous methodology.
To get a sense of the benevolent framing of this imperious global project, one only has to read its beneficiaries’ promotional materials, such as the Monitor Institute’s 2009 publication, “Investing for Social & Environmental Impact: A Design for Catalyzing an Emerging Industry:”
The New Yorker moving into her first home, the student in Tanzania studying under electric light, the small-business owner in Cambodia expanding her payroll—none of these people would recognize one another as co-participants in the same emerging industry. Neither, perhaps, would the commercial banker placing debt in the Acquisition Fund, the high-net-worth individuals investing in E+Co, or the German worker whose pension fund invested in microfinance through Blue Orchard. Yet these are all examples of the proliferation of activity occurring as a new industry of impact investing emerges. This industry, which involves making investments that generate social and environmental value as well as financial return, has the potential to complement philanthropy and government intervention as a potent force for addressing global challenges at scale.
The Monitor Institute claims to be “a social enterprise that surfaces and spreads best practices in public problem solving and pioneers next practices – breakthrough approaches to addressing social and environmental challenges.” Monitor is a subsidiary of Deloitte Touche Tohmatsu Limited, a leading multinational financial institution that provides audit, assurance, tax, consulting, advisory, actuarial, corporate finance, and legal services to “select Impact Investing and Venture Philanthropy’s Role in Sowing the Seeds of Financial Opportunity | Dissident Voice: