Democratic Capitalism and Philanthropy in a Global Economy

Abstract

Democratic capitalism has become the popular paradigm in the modern world, and it is spreading further through globalization. It is a model based on growth, expansion and constant innovation. However, it is accompanied by social problems which may worsen despite overall gains in wealth. In this paper, we suggest that democratic capitalist societies may benefit from the application of what has been a primarily American institution: Philanthropy. We present the Entrepreneurship-Philanthropy Cycle, which demonstrates the relationship between wealthy entrepreneurs, philanthropic contributions and economic opportunity. As a nonmarket and nonstate mechanism, philanthropy is unique in its structure and operations, and may offer the ideal approach to solving social problems. We suggest that both the internationalization of American foundations, and the growth of domestic philanthropy, can help developing countries offset social problems. JEL-classification: O10, P10, I30

The Role of Contextual Factors in Private Sector Engagement: A Case Study of Private Sector Contribution to COVID-19 Mitigation in Nigeria

“…These characteristics, in line with the entrepreneur-philanthropy nexus espoused by Acs and Phillips ( 14 ), predispose the private sector leaders to use their resources for the greater good of society. This is consistent with the theory of corporate social responsibility, which notes that private businesses and establishments have philanthropic obligations to the society wherein they operate ( 13 ).…”

“…This is described in the entrepreneur-philanthropy model, which opined that successful entrepreneurs are often inclined to make a philanthropic investment that is specifically aimed at addressing a targeted societal problem ( 13 ). The key stakeholders of the private sector initiative against the COVID-19 pandemic in Nigeria are well-established entrepreneurs with business interests across different sectors of the economy.…”

Exploring contemporary entrepreneurial philanthropy

“…The literature reflects a growing interest in the relationships between wealth creation, income inequalities and philanthropy (Acs and Desai, 2007; Harvey, 2010; Krugman, 2009), but largely absent from this is serious consideration of the motives and modus operandi of the entrepreneurial philanthropist. We follow the definition of entrepreneurial philanthropists proposed by Harvey et al, who suggest that entrepreneurial philanthropy is defined by ‘the pursuit by entrepreneurs on a not-for-profit basis of big social objectives through active investment of their economic, cultural, social and symbolic resources’ (2011: 428), emphasizing the active involvement of entrepreneurs in the search for opportunities to address economic and social inequalities.…”

“…The world’s media has raised awareness of entrepreneurs’ involvement in philanthropy focusing attention on the philanthropic ventures of prominent entrepreneurs including Bill Gates, Warren Buffett, Paul Allen and Pierre Omidyar, endowing them with a celebrity-like status (BBC, 2011; Buffett, 2010). However, a review of the entrepreneurship literature reveals that beyond the work of a handful of researchers, including Acs and Phillips (2002) and Acs and Desai (2007), philanthropic activities undertaken by entrepreneurs are afforded little attention. Our intention in this article is to address this research gap, using capital theory to analyse and explore the current involvement of wealthy, successful entrepreneurs engaged in significant acts of philanthropy.…”