Stanford and Philanthropy

Remember that magazine cover anoninting Allen Stanford "the original philanthrocapitalist"? Well it turns out that he really did love giving money away to various charities. Texas television is reporting that "The Children's Assessment Center, American Heart Association, Museum of Fine Arts, Museum of Natural Science and Theater Under the Stars are or have all been beneficiaries" of Stanford's largesse; to that we can add his sponsorship of The Ultimate Gift, a movie about a child's journey of discovery and the connection between wealth and happiness. And he was expert at coming out with stuff like this at the drop of a hat:

We believe that there is a moral and social responsibility to lend support to initiatives that strengthen the development and nurture the growth of children. Our philosophy is that nothing strengthens and benefits a community more than healthy, happy children, and that is why I am so proud and honoured that Stanford is committed to supporting St Jude Children's Research Hospital in North America and the University Children's Hospital in Zurich. We are also sponsoring several children's health programs in Latin America and the Caribbean region and look forward to contributing to the betterment of any community in which we operate.

Philanthropy is a great way to increase one's standing in just about any community, and if you're running a Ponzi scheme, the main thing you need lots of is trust and standing. A few more stories like this, however, and philanthrocapitalism's name -- which was never all that great to begin with -- will be irreversibly tarnished. More generally there's the simple fact that fast-talking and slightly sleazy rich guys, like Stanford or Roger Hamilton, seem to be irresistibly attracted to philanthropy, which at best makes it much harder for genuine philanthrocapitalists to prove their bona fides.

This is one reason why I'm suspicious about the prospects for for-profit philanthropy: the idea might work in theory, but it hasn't ever worked particularly well in practice, and it's far too likely to get hijacked by exactly the wrong kind of person. At least Stanford didn't get his favored charities to invest with him, as Madoff was wont to do.