Power of Private Philanthropy Endangers the Public

Back in 2006 as part of a pledge to “give back” his accumulated wealth, investor Warren Buffett turned over $30 billion to the Bill and Melinda Gates Foundation and at the same time added to smaller foundations he had created for his three children.

This weekend in an extraordinary opinion piece in the New York Times, The Charitable-Industrial Complex, Buffett’s son Peter, a musician, describes what he calls his journey as a philanthropist.

“I noticed,” writes Peter Buffett, “that a donor had the urge to ‘save the day’ in some fashion.  People (including me) who had very little knowledge of a particular place would think they could solve a local problem.  Whether it involved farming methods, education practices, job training or business development, over and over I would hear people discuss transplanting what worked in one setting directly into another with little regard for culture, geography or societal norms.”

“As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few,” Buffett declares,” the more heroic it sounds to ‘give back.’ It’s what I would call ‘conscience laundering’—feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.”

in a book called Consumed, published a year after Warren Buffet turned over the bulk of his fortune to the Gates Foundation, political philosopher Benjamin Barber discusses the explosive growth of philanthropic giving as part of our society’s rush to privatization:

“First a privatizing ideology rationalizes restricting public goods and public assets of the kind that might allow the public as a whole to rescue from their distress their fellow citizens who are in jeopardy; then the same privatizing ideology celebrates the wealthy philanthropists made possible by the market’s inequalities who earnestly step in to spend some fragment of their market fortunes to do what the public can no longer do for itself.  Better philanthropy than nothing, but far better than philanthropy is a democratic public capable of taking care of itself with its own pooled resources and its own prudent planning.  The private philanthropist does for others in the larger public what they have not been enabled to do for themselves, as a public; democracy, on the other hand, empowers the public to take care of itself.”  (131)

In public school policy two obvious examples of the growing power of the philanthropic sector are the investment of the Bill and Melinda Gates Foundation in developing econometric Value Added Measures (VAM) for the evaluation of school teachers and promoting that government require this kind of technocratic reform, and in supporting school privatization through the Charter-District Collaboration Compact program at the Center for Reinvesting Public Education at the University of Washington.  Staffers from the Gates Foundation have filled the Arne Duncan Department of Education from the beginning.

The most obvious way to curb the power of huge philanthropy is to increase taxes on those amassing vast fortunes. Taxes are, of course, the way we fund the public sector.  As Warren Buffett has famously pointed out, the tax system today is skewed to the degree that he pays taxes at a lower rate than his secretary.

Building the political will to curb the power of private wealth also requires us to name the problem.  Peter Buffet helps us here.  He calls the spreading of philanthropic wealth as an act of charity, “philanthropic colonialism.”