Today’s Philanthropy: Giving Back While Perpetuating Inequality and the Power of Big Money

Although he died in 2006, the Rev. William Sloane Coffin, longtime pastor of New York’s Riverside Church and a lifetime advocate for justice, speaks to our times: “Charity is a matter of personal attributes; justice, a matter of public policy. Charity seeks to alleviate the effects of injustice; justice seeks to eliminate the causes of it. Charity in no way affects the status quo….”

Coffin continues: “We comfort ourselves with the thought that because our intentions are good (nobody gets up in the morning and says, ‘Whom can I oppress today?’) we do not have to examine the consequences of our actions.  As a matter of fact, many of us are eager to respond to injustice, as long as we can do so without having to confront the causes of it.”  Charity “is desperately needed in an economy whose prosperity is based on growing inequality.”

The meaning of these words is echoed in Anand Giridharadas’s recent NY Times column, written to promote Giridharadas’s new book, being released today.  Giridharadas has studied the role of philanthropy from the inside as a Henry Crown Fellow at the Aspen Institute. Here is his critique: “At first you think: Rich people making a difference—so generous! Until you consider that America might not be in the fix it’s in had we not fallen for the kind of change these winners have been selling…. Of course, world-changing initiatives funded by the winners of market capitalism do heal the sick, enrich the poor and save lives. But even as they give back, American elites generally seek to maintain the system that causes many of the problems they try to fix—and their helpfulness is part of how they pull it off.”

Giridharadas continues: “What their ‘change’ leaves undisturbed is our winners-take-all economy, which siphons the gains from progress upward. The average pretax income of America’s top 1 percent has more than tripled since 1980, and that of the top 0.001 percent has risen more than sevenfold, even as the average income of the bottom half of Americans stagnated around $16,000, adjusted for inflation, according to a paper by the economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman.”

In The New Yorker, Elizabeth Kolbert examines Giridharadas’s new book and several others written to examine the social and political impact of the rapid expansion and power of philanthropy: “We live, it is often said, in a new Gilded Age—an era of extravagant wealth and almost as extravagant displays of generosity. In the past fifteen years, some thirty thousand private foundations have been created, and the number of donor-advised funds has roughly doubled.”  Kolbert quotes Darren Walker, the president of the Ford Foundation, challenging today’s philanthropists “to openly acknowledge and confront the tension inherent in a system that perpetuates vast differences in privilege and then tasks the privileged with improving the system.”

One problem is that an increasing amount of wealth is untaxed and, therefore, unavailable to public projects to benefit us all. The other side of that problem is that philanthropists themselves are defining the way problems should be solved, making grants that fulfill their specific priorities, and increasingly pushing the edges of their 501(c)(3) nonprofit status to promote their own public policy priorities—by funding the think-tank research that drives the grants they make, paying for the promotion of their ideas, and skirting the limits on direct policy advocacy by philanthropic foundations. Kolbert explains: “The result is doubly undemocratic. For every billion dollars spent on advocacy tricked out as philanthropy, several hundred million dollars in uncaptured taxes are lost to the federal treasury… In 2016, the tax deduction for charitable contributions cost the federal government at least fifty billion dollars.”

So… how has all this affected trends in public education policy? Especially during Arne Duncan’s tenure as Education Secretary, after he hired five former Bill and Melinda Gates Foundation staff people for key Department positions, his Department’s policy was directly shaped by priorities of the Gates Foundation and other philanthropies that share Gates’ goals. The very best investigation of the impact of philanthropy on public education policy is Joanne Barkan’s Got Dough? Public School Reform in the Age of Venture Philanthropy, published by Dissent in 2011.

Barkan begins: “The cost of K-12 public schooling in the United States comes to well over $500 billion per year. So, how much influence could anyone in the private sector exert by controlling just a few billion dollars of that immense sum?  Decisive influence, it turns out.  A few billion dollars in private foundation money, strategically invested every year for a decade, has sufficed to define the national debate on education; sustain a crusade for a set of mostly ill-conceived reforms; and determine public policy at the local, state, and national levels.  In the domain of venture philanthropy—where donors decide what social transformation they want to engineer and then design and fund projects to implement their vision—investing in education yields great bang for the buck.”

Barkan identifies the particular projects which are the priorities of the Big Three in education—Gates, Broad, and Walton—working in sync: “Whatever nuances differentiate the motivations of the Big Three, their market-based goals for overhauling public education coincide: choice, competition, deregulation, accountability, and data-based decision making.  And they fund the same vehicles to achieve their goals: charter schools, high-stakes standardized testing for students, merit pay for teachers whose students improve their test scores, firing teachers and closing schools when scores don’t rise adequately, and longitudinal data collection on the performance of every student and teacher.  Other foundations—Ford, Hewlett, Annenberg, Milken, to name just a few—often join in funding one project or another, but the education reform movement’s success so far has depended on the size and clout of the Gates-Broad-Walton triumvirate.”  Barkan has continued to track this issue; here is a 2014 update.

Barkan’s work focuses on the power of philanthropy driving education policy. It is important that Giridharadas and others are investigating more broadly how our society is being shaped by the growing concentration and power of money—along with tax policies that increasingly allow our wealthiest citizens to invest in their pet causes (and ideologically driven policies) instead of paying what ought to be their fair share of taxes.  As William Sloane Coffin challenges, “One of the attributes of power is that it gives those who have it the ability to define reality and the power to make others believe in their definition. Thus it is that private property in America has come to be considered all but sacred. Obviously this makes its redistribution difficult, even through taxation.”

Quotes from William Sloane Coffin are from Credo, pp. 60-64).