July 4, 2022

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Would the World Be Better Off Without Philanthropists?

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Organized philanthropy, like most things, looks different on the inside than it does from the outside. “Philanthropy” comes from the Greek for “love of humanity,” and public perceptions of it have usually centered on donors and how humanity-loving they really are. The good guys are generous rich people who give to causes we all approve of, like combatting climate change; the bad guys give in order to launder their reputations (like the opioid-promoting Sackler family) or to advance unsavory goals (like the anti-environmentalist Kochs). Either way, the salient questions about philanthropy, for most people, have to do with the size and the quality of a donor’s heart and soul.

In real life, the interaction between big-money philanthropy and philanthropy-reliant institutions like universities, charities, and museums is more of a business negotiation than a morality play. Philanthropists rarely make the large, unrestricted gifts that the receiving institutions really want, and so the two parties bargain: over the purpose and the control of a gift, over the form of credit, over how much the institution has to raise from other sources as a condition of the gift’s being made. In the world of philanthropy, all this is just another day at the office. Yale recently formed a committee to study its relations with donors. That came after the director of its celebrated “grand strategy” program resigned in protest when two major donors tried to exercise what appeared to be a contractual right to create an advisory board for the program. It would be a mistake to view this case as evidence that such requests are rare, or that universities rarely agree to them.

If you give modestly to your alma mater, you might get to check a box that indicates generally how you’d like your gift to be used—or you might not. If you give five million dollars, you can be much more specific, possibly creating an entirely new center or an endowed chair devoted to a subject of particular interest to you. If you’re thinking of giving fifty million dollars, you can have as much of the time of the president of your alma mater as you’d like, and the two of you might talk about redirecting the future of the whole institution.

In the contemporary world, philanthropy is distinctively American. We give about four hundred and seventy billion dollars a year—more if you count donations of time, physical labor, and material. America’s total is ahead of any other country’s, even as a percentage of G.D.P., because, in part, we’re more market-friendly than most affluent countries, with more private wealth and less government provision. The past four decades have generated an especially large number of fortunes, and bigger, bolder philanthropy as a consequence. Philanthropy calls to mind Freud’s maxim “Where there was id, there ego shall be”: how you made your money shapes how you give it away. The robber-baron-era founders of vast industrial corporations like General Motors, U.S. Steel, and Standard Oil often created vast new institutions—hospitals, universities, museums. Today’s technology and finance billionaires, in keeping with their business careers, use terms like “strategic philanthropy” and “venture philanthropy” to describe attempts to disrupt traditional arrangements.

During any gilded age, there’s a dance between politics and capital. Rich people depend on favorable political conditions to build and preserve their wealth. Mega-philanthropists use that wealth to influence government far more than they’d be able to merely by voting on Election Day. They can set up think tanks that promote policies they approve of, and they can enlist public resources for their endeavors. The charter-school movement is an obvious example of philanthropy creating a large-scale alternative to a traditional government function which remains part of government, with taxpayer support. The tech mogul Eric Schmidt, through his foundation Schmidt Futures, paid salaries for members of the White House Office of Science and Technology Policy, which is staffed with a number of past and present Schmidt employees.

Aggressive and self-confident philanthropic activity has, inevitably, generated a backlash. Changes in economic opinion that followed the 2008 financial crisis showed up in attitudes about philanthropy: it’s the shift from Matthew Bishop and Michael Green’s “Philanthrocapitalism: How the Rich Can Save the World,” published in 2008 and written before the crisis, to Anand Giridharadas’s “Winners Take All: The Elite Charade of Changing the World,” published a decade later. The Giving Pledge, which was launched by Bill Gates and Warren Buffett in 2010 and has more than two hundred signatories who have pledged to give away at least half their wealth, puts the focus on philanthropists’ generosity, but an increasingly common focus is their power. There’s now a radical disjunction between public celebrations of big givers and their gifts, on the one hand, and a growing body of critique of philanthropy, on the other. A sorting out is in order.

“Philanthropy: From Aristotle to Zuckerberg” (Bloomsbury), a long but highly readable survey by the British journalist Paul Vallely, is helpful in framing the major questions about philanthropy. In the ancient world, Vallely argues, philanthropy was about aristocratic patrons footing the bill for schools and other forms of cultural infrastructure; it wasn’t about helping the poor and needy, or purifying the soul of the donor. Vallely locates what he considers philanthropy’s original sin in the Protestant Reformation, which directed attention to the moral failings of charity’s recipients—hence a long string of meddlesome social improvers, exemplified by Mrs. Jellyby in “Bleak House.” Questions about the proper division of labor between government and philanthropy, and about the treatment of recipients, have been around for ages, he shows. The advent of big philanthropy—much of it overseen by the salaried staffs of endowed foundations—added a new level of scale, permanence, and ambition as philanthropists took on missions traditionally associated with government. The obvious tensions arise. Vallely writes, “Foundations are unaccountable, both politically and in terms of the disciplines of the market: they are governed by trustees who are elected, not by the public, but by existing trustees. In this sense they are profoundly anti-democratic.”

Large-scale philanthropists usually want to do more than sift through grant applications or distribute their largesse to the same set of beneficiaries year after year. Instead, like many institutions these days, they produce mission statements, establish priorities and goals, and try to make financial commitments that are time-limited yet have “impact.” But philanthropists and their beneficiaries often struggle to prove that a sizable gift has made a significant difference in the world. As big as big philanthropy is, it’s dwarfed by both government and business. If you want to give a hundred dollars to a scholarship fund at a school, the money will almost certainly go into the fund and then be disbursed as scholarships. If, a few steps up the ladder, you want to give your church a significant gift to build a new meeting room, the church will build the room and hold meetings in it. But gifts that have a truly broad and undeniable effect? Those are rare, especially when they entail, as they usually do, funding one thing (like an activist group) in the hope of achieving another (like a substantial policy change). That’s why one sees a familiar set of philanthropy success stories repeated endlessly, like the Ford and Rockefeller Foundations’ initial funding of the Green Revolution or the Carnegie Corporation’s role in establishing the public-broadcasting system.

Vallely ends his book by dividing his principal concerns into two categories. “Strategic Philanthropy” denotes major donors’ transformational ambitions, which raise questions about whether they have the standing to try to change society and whether they can do so effectively. “Reciprocal Philanthropy” denotes the problems related to the power relations between giver and recipient. Once you’ve conceptualized the ways in which philanthropy can be problematic, though, what you want is a precise, rigorous moral accounting of the endeavor in its current form. That’s what Emma Saunders-Hastings, a young political philosopher, provides in her new book, “Private Virtues, Public Vices: Philanthropy and Democratic Equality” (Chicago).

People tend to celebrate philanthropy when they agree with its goals and to condemn it when they don’t—say, objecting to the Charles Koch Institute as a malign attempt to turn economic power into political power but celebrating the Natural Resources Defense Council, which has backing from rich liberals, as a force for good. Saunders-Hastings will have none of that. She also doesn’t much care whether donors’ money was made in clean or dirty ways, or whether their intentions are pure or self-interested. She applies the same merciless logic to all forms of philanthropy that allow donors to exercise outsized influence, either politically or personally.

What Saunders-Hastings most dislikes about philanthropy is the “relational inequality” that it produces. “Some people’s altruism puts other people under their power,” she writes. Philanthropy creates “objectionably hierarchical social and political relationships.” She sees unacceptable paternalism anytime philanthropists try to dictate the behavior of their recipients, or otherwise assume that they have a better idea of what’s in their recipients’ interests than the recipients do. Charter-school funders, she notes, rarely send their own children to charter schools and may choose schools for their kids that have a completely different educational model, stressing independent thought and creativity rather than drill and discipline. Even if you are a small-scale philanthropist who gives modestly to, for example, a religious hospital that tries to impart to its patients its version of the virtuous life, Saunders-Hastings isn’t letting you off the hook: “It is possible to condescend even from moderate heights.” Nor is it O.K. when gifts to a scholarship fund elicit thank-you notes from specific students to specific donors, because such expressions of gratitude carry a tincture of social inferiority.

Saunders-Hastings repeatedly insists that democracy is superior to philanthropy as a way of addressing society’s needs. If you’re used to thinking that our democratic system is in bad shape, that can sound jarring. But she’s working in the tradition of what philosophers call “ideal theory”; the aim is to sketch out what a good system would be, assuming that everyone fully complied with its rules. That idealized model helps you work out the principles so that, when you’re considering how the world actually works, you have them as a reference. For her, democracy, “the political manifestation of respect for people’s status as equals,” is far preferable to philanthropy, which involves “the rich usurping control over a society’s common life and matters of common concern.” Philanthropic donation isn’t meaningfully different from mega-giving to political-action committees: “both are ways for the rich to use their money to influence social and political outcomes.”

A common justification for philanthropy is that it offers a non-governmental approach to social reform. Books on philanthropy often bring up Alexis de Tocqueville’s astonishment at the number of civic associations he encountered as he toured the United States in the eighteen-thirties—the idea is that philanthropy belongs to a long tradition of civil-society organizations, which stand apart from government. This is another argument that Saunders-Hastings has little use for. She notes that Tocqueville’s America, unlike ours, had a high degree of social equality; he was describing a country where associations were created by and for ordinary people, and so were not comparable to present-day philanthropies run by the rich. And Tocqueville, an aristocrat writing long before the emergence of the welfare state, was comfortable with the idea of superior people providing for their inferiors. This clashes with the relational equality that Saunders-Hastings prizes. “It is objectionable when things that are owed to recipients as a matter of justice are supplied (exclusively) through discretionary charity rather than through political entitlements,” she writes.

Saunders-Hastings also cautions against assuming that philanthropy is really separate from government. In the nineteen-nineties, the political scientist Theda Skocpol dug up historical evidence demonstrating that, even before the Civil War, many aid organizations were national rather than local, and were vigorous political participants, lobbying to secure public benefits for their members. Saunders-Hastings points out that philanthropy benefits greatly from favorable governmental treatment. Donations to nonprofit organizations are tax deductible, at a cost to the U.S. Treasury of more than fifty billion dollars a year, and only people who itemize their deductions (that is, affluent people) get this advantage. Foundation endowments are not taxed. What’s more, donors often try to leverage their gifts to influence the direction of much larger flows of government spending. Most state laws, Saunders-Hastings also notes, require recipients to adhere to donors’ specified intentions, even after the donors are long dead—more evidence of an enduring hierarchical influence that she considers corrosive to democracy.

Nicholas Lemann
2022-05-23 06:00:00

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