Blog 16.09.21

Avoiding billionaire dependency

George Soros is restructuring his sprawling foundation, causing anguish among staff and fundees.

The wailing and gnashing of teeth at George Soros’s Open Society Foundations during its painful restructuring is a warning of the perils that face campaign groups who become financially dependent on billionaires with a bone to pick.

Wealthy people and their family foundations – the megaphilanthropists – provide much of the funding behind healthcare campaigns (especially anti-smoking) and climate initiatives. 

For example, the BBC revelations this week on the alleged bribing of Robert Mugabe by British American Tobacco (BAT) came from a joint investigation with the Bureau of Investigative Journalism.  The Bureau receives funds for health investigations from Vital Strategies, a US foundation partly funded by Michael Bloomberg, an ardent anti-smoker.  

Greener than mummy

That the wealthy and their offspring (always greener than daddy and mummy) are funding those fighting for social and environmental justice is a very good thing.  It’s a form of levelling up towards a more just society, helping to balance the powerful influence of corporations defending their vested interests and the status quo.  

The danger lies in advocacy groups getting flabby from easy money.  As the current crop of billionaires look to give away their fortunes (Bezos, Bloomberg, Buffet, Gates, Soros et al), campaigners have grown used to a firehose of easy cash as they build their do-good empires.

It’s when the spigot is turned off that the flab is revealed.  Or as Warren Buffet says of poorly-run companies: “Only when the tide goes out do you discover who’s been swimming naked.”

It’s an extremely low tide at the Open Society, funded entirely by George Soros. The left-leaning 91-year-old financial wizard is better known for making £1 billion in a single a day by betting against the ability of the Bank of England to defend the value of the pound when Britain foolishly joined the European Rate Mechanism (ERM) in September 1992.   

The Open Society is a sprawling multi-national organization promoting human rights and democracy – and virtually everything woke in between.  Its budget in 2020 was $1.2 billion. It funds over 50,000 organisations that promote its causes. These range from supporting the persecuted free press in challenging places, to campaigning to eradicate racial and sexual bias in algorithms used by governments and corporations.

Soros reckons his foundation has lost its intended anti-authoritarian focus and he is restructuring it to get it back on track. And he has every right to: it’s his money, his organization, his bone.  But his plans have caused an enormous amount of institutional and personal anxiety: manifested in unseemly hissing and bitching among the far-flung functionaries.  Over 150 employees – around one in 10 – have been made redundant and fundees are getting pay-offs to prepare them for a frugal life without Soros.

Anguish

The anguish has brought accusations by staff of cruelty, hypocrisy, racism, sexism, etc – all the things the foundation fights against.  

We should not be surprised.  Relying on the largesse of billionaires for your living will always be perilous.  After all, making that sort of money is not down to luck.  It takes a strong and persevering will that never dies.

The many advocacy groups now supping at the tables of the rich would be well advised to diversify their funding sources and seek multiple donors. Unlike corporations, billionaires – no matter how woke – are people with attitude and personal peccadillos. 

The year before Soros broke the Bank of England, he was taken to an employment tribunal after the sacking of his personal cook. Her misdemeanor: using a bottle of Château Lafite to make a wine sauce.  The butler said she was instructed to use a “youngish Beaujolais” but she thought the boss deserved better.  He clearly disagreed.

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Author:
Peter Knight

Chairman and co-founder

Clients:
IKEA, A Global packaging company, A leading global food company




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