CSR, or Corporate Social Responsibility, is a phenomenon that free-market gurus like the late Milton Friedman railed against, and that concerned non-governmental organisations often rush to embrace. Yet, both of these seemingly paradoxical reactions to CSR are arguably misinformed: they falsely take the rhetoric of CSR at face value and believe that its proponents are actually concerned with improving corporate social responsibility to the broader population, not just to their shareholders.
A more thorough analysis of CSR suggests that its main function is to artificially sustain an unsustainable capitalist world order, thereby maintaining profit in spite of increasing social irresponsibility. Thus, one of the primary purposes of CSR is to constrain the advent of social revolutions. Such practices, which are promoted by the more liberal corporate elites, serve to sustain oligarchic forms of democracy and postpone the occurrence of its more authoritarian variant, fascism. In this regard, not-for-profit corporate foundations act as one of the most important vehicles for promoting CSR.
Contrary to conservative not-for-profit corporations, which tend to join with Friedmanites in deriding CSR, their liberal counterparts correctly maintain that a world without some form of corporate social responsibility is not conducive to capitalism's ongoing viability. Indeed, by acknowledging that massive and unregulated corporate power is potentially easily undermined by popular resistance, liberal power-brokers recognise the need to provide a controlled outlet valve for popular discontent. This enables them to prevent popular power from coalescing in a way that could challenge elite prerogatives. Thus, not-for-profit corporate foundations use the economic resources of their for-profit parent companies to help steer progressive activists into political channels that present no serious threat to the status quo. Sadly, the most problematic part of such anti-democratic strategising is that it is rarely talked about outside of elite corporate circles.
Like many other unaccountable and undemocratic organisations, not-for-profit corporations often downplay the magnitude of their influence on society. While academics are keen to point out the influence of other key hegemonic institutions, such as the mainstream media, the sway of philanthropic organisations is rarely challenged. Consequently, in most cases even critical researchers accept the benign-sounding rhetoric of philanthropic bodies and ignore, or belittle, any of their influences on democratic processes. This neglect is reflected by the fact that, in the second half of the 20th century, one of the most important books critiquing not-for-profit corporate foundations, titled Philanthropy and Cultural Imperialism, was published, not by political scientists, but by educational theorists. Thankfully this excellent book, out of print for many years, has just been republished by Indiana University Press.
Despite the relative silence around the influence of not-for-profit foundations, evidence has slowly accumulated to demonstrate that, contrary to popular belief, liberal foundations have profoundly shaped the contours of global civil society, actively influencing social change through a process otherwise referred to as either channelling or co-option. It is interesting to note here that, although some scholars have defended the need for foundations to shape democratic processes, they usually fail, as Joan Roelofs put it, to “probe the contradictions to both ‘free enterprise’ and democratic theory implied by the need for extra-constitutional planners.” (Foundations and Public Policy, 2003, p.5)
Thus, such powerful not-for-profit corporate funders have historically played a critical role in creating and coopting progressive individuals, social movements, and a wide array of non-governmental organisations. For instance, with regard to the US environmental movement, although the proportion of most environmental groups' incomes derived from foundations is relatively small, such funding has a disproportionate influence on policy decisions compared to membership dues. This is because (1) foundation funding is usually tied to specific environmental projects; (2) foundation board members are often offered influential positions sitting on the boards of the organisations they aid; and (3) foundations utilise proactive grant-making, whereby experts associated with the foundations guide environmental groups to concentrate on projects identified by the foundations themselves. This infiltration of social movements by liberal foundations has been referred to as 'philanthropic colonisation'.
By channelling resources to environmental groups with a moderate-liberal approach to social change, Daniel Faber and Deborah McCarthy suggest that liberal foundations have helped promote "the primacy of ‘professional-led’ advocacy, lobbying, and litigation over direct action and grassroots organizing, a single-issue approach to problem-solving over a multi-issue perspective, the art of political compromise and concession over more principled approaches, and the ‘neutralization’ of environmental politics in comparison to linking environmental problems to larger issues of social justice and corporate power." (Foundations for Social Change, 2005, p.178)
The problem is not that liberal philanthropy has no positive social benefits (which it does, of course, as in sponsoring the work of many radical activists, and even a handful of socialists). The problem is that, when considered as a whole, the overarching purpose of liberal philanthropy is to sustain corporate profits and legitimise the status quo, not to promote global peace and human emancipation.
Given that the not-for-profit foundation side of CSR is not quite all it is cracked up to be, is it logical to ask if the same is true about direct, allegedly apolitical, corporate philanthropy? Unfortunately, direct corporate philanthropy, institutionalised as CSR, suffers from much the same problems, as it is regularly used to maximise corporate profits. Perhaps the most useful exposition of this argument was surmised by Gretchen Crosby Sims in her PhD study Rethinking the Political Power of American Business: The Role of Corporate Social Responsibility (2003). The central thesis of Sim’s groundbreaking analysis of the CSR practices of Fortune 500 companies is that “these activities, which have been all but overlooked by political scientists, represent an enormous, largely hidden source of political power for corporations”. Indeed, even today, almost all researchers focusing on the means by which corporations influence politics strictly delimit their analyses to studying business Political Action Committee (PAC) contributions, soft money donations and/or lobbying. Strategic political philanthropy, thinly disguised by the rhetoric of CSR, remains untalked about and, thus, the ostensibly altruistic intent of business elites remains unchallenged.
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Originally published in the Corporate Watch Newsletter, issue 43, June 2009, http://www.corporatewatch.org/?lid=3401.
Michael Barker is a researcher and writer who 'rejected' his PhD thesis at the Griffith University, Australia. The title of his thesis was “Mediating Social Engineering: Moving Beyond Elite Manipulation of Democracy”. For more of Barker’s work, see his blog: www.michaeljamesbarker.wordpress.com.