The Ethical Issue of Contemporary Philanthropy: Uintended Negative Consequences of Philanthropy

INTRODUCTIONThe word philanthropy is rooted in the ancient Greek word 'philanthropia'. Philanthropia is a combination of the words 'philos' for 'loving' and 'anthropos' for 'human being. ' In the context of studies on modern philanthropy, its definition often varies depending on the individual scholars and their academic areas of specialization. Payton (1988) defined philanthropy as 'voluntary action for the public good. ' Van Til (1990) defined it as 'the voluntary giving and receiving of time and money aimed toward the needs of charity and the interests of all in a better quality of life. ' Salamon's definition is 'the private giving of time or valuables (money, security, property) for public purposes' (Salamon, 1992). Salamon's definition is similar to the notion of 'charity'. Payton and Van Til's definitions have broadened the boundaries of philanthropy regarding its actors and sectors. Their definition includes efforts to apply philanthropy not only in the service of charitable causes but also to other causes such as the environment, medicine, the arts, education, and human rights. Further, this definition embraces individuals' actions and those of organizations and corporations. In this article, we adopt the Van Til's definition and involve a broad array of causes and actors.The philanthropic actors are individuals, foundations, philanthropic organizations, and businesses that engage in 'corporate giving' (Schuyt, 2010). Nongovernmental organizations (NGOs) are also featured in this cast. The agents/ organizations including foundations and NGOs that act on philanthropic intentions are collectively called 'not-for-profit. ' Research on ethical perspectives in philanthropy is still quite limited compared to that on for-profit organizations (see e.g. recent review article on Business Ethics by Moriarty, 2016). In particular, the field of marketing by private corporations is one that generates considerable debates on ethical issues (Vassilikopoulou, Siomkos & Rouvaki, 2008). The existing philanthropy literature has mostly focused on the motives of donors, management of not-for-profit organizations, and fundraising strategies. It developed in response to the greater interest of not-for-profit organizations in efficient and effective management and to the competition for limited resources among not-for-profit organizations, especially at times when economic hardship has resulted in fewer resources.Philanthropy is an important source of financial support for social change (Kayser & Budinich, 2015). A wide range of normative questions can be raised about the practice of philanthropy, but research in the not-for-profit context has not addressed the subject of ethics to a significant extent (Agarwal & Malloy, 1999). In particular, research on the consequences and impact of philanthropy has not been paid sufficient attention. One of the reasons why research on the potential negative impact of philanthropy has not been well-documented is that not-for-profit organizations typically have not yet embraced qualitative and quantitative impact measurement methods and resources despite the recent emphasis on impact measurement. Also, not-for-profit organizations are concerned about current and potential donors' response to such information. Indeed, if such evaluations were to demonstrate a negative impact of these organizations' activities, they could face donor criticism and potentially encounter major obstacles to fund-raising.Compounding the reluctance of not-for-profit organizations to measure their impact, the general public tends to make the assumption that the not-for-profit sector operates ethically. This rationale provides a less compelling environment for researchers (Agarwal & Malloy, 1999). Jeavons (1994) suggested that "the basis for much of these organizations' support is the expectation that they will be vehicles for building a more caring, more just society. " Due to this traditional assumption, when unexpected scandals arise in the not-for-profit sector they give it a more negative reputation among the public compared to scandals in the for-profit sector. …