How Giving to Charity Will Help You Get Rich Quick

On Monday, I met Jim Whitton, a director of The

Hunger Project, in a midtown cafe. The Hunger Project (THP) is a well-run

non-profit which works efficiently and tirelessly towards sustainable poverty

reduction in the developing world. With Whitton was Roger Hamilton, the chairman

of something called the XL Group,

which has just announced

that it will give $5 million over five years to THP’s programmes in India. The

formal commitment is being made today, at the Clinton

Global Initiative.

The deal is a winning one for all concerned. The Clinton Global Initiative

has done what it was set up to do, which is catalyze commitments to improving

the planet. The Hunger Project receives a large donation. And Roger Hamilton

gets to be mentioned in the same breath as Bill Clinton, helping to give his

XL Group kudos and respectability.

Hamilton loves to talk about creating his network of "social entrepeneurs,"

who give at least 10% of their profits to charity, and who will be a powerful

force in terms of global poverty alleviation. In fact, Hamilton just loves to

talk. He talks with great conviction and at great length, and he has turned

his ability to talk into what I’m sure is a very lucrative business. For $3,300

you can hear him talk at his Entrepreneur

Business School ("a journey of self and entrepreneurial discovery"),

while for a mere $105 you can buy his 6-CD set called Wealth

Dynamics ("a revolutionary technology that will guide you on your path

to wealth"). Meanwhile, his magazine

is a peculiar mix of inspirational stories with advertisements for "franchising

opportunities" and the like.

Of course, there’s no shortage of get-rich-quick merchants, and I find it interesting

that Hamilton has hit upon giving money to charity as the way in which he distinguishes

himself from the rest of the pack. Every time you sign up for one of his products,

you feel good about it, because you know that he’s giving some of the proceeds

to charity and in fact that you and your fellow XL entrepeneurs are all pulling

together in the service of a greater cause – while making lots of money,

of course. The strategy seems to be working, too, at least for XL Group if not

for its members.

This, then, is one reason why I still feel a little uncomfortable about the

idea of for-profit philanthropy. In theory, and when it’s practiced by the likes

of Pierre Omidyar or or Richard Branson, it’s a great idea and can

work very well. But it can also create major conflicts of interest, as we

saw with Banco Compartamos. And I fear that if the idea really starts to

catch on then it risks being hijacked by the likes of Roger Hamilton, and people

will view it with even more suspicion than they do already.

This entry was posted in development. Bookmark the permalink.