Another Incisive Critique of Venture Philanthropy

This post is about today’s venture philanthropy, a world so foreign to most of us that I think we need a frame to help us get our bearings.  Here with some familiar principles is the gifted preacher, and longtime pastor of New York City’s Riverside Church, the late Rev. William Sloane Coffin:

“The way we are cutting taxes for the wealthy and social programs for the poor, you’d think the greedy were needy and the needy were greedy.” (CREDO, p. 61)

“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.” (CREDO, p. 60)

“Given human goodness, voluntary contributions are possible, but given human sinfulness, legislation is indispensable.  Charity, yes always; but never as a substitute for justice.” (CREDO, p. 56)

These statements speak to the operations of today’s mega-foundations, the recipients of the fortunes of the super-rich.  Donations to philanthropic foundations are tax-free, the counter-democratic idea being that the rich can define, with the assistance of the staff they employ, what’s good for the rest of us. These days mega-foundations are defining the “solutions” to some of the world’s greatest challenges—global agriculture, global health, and in our own country, public school reform—in ways that many of us do not understand.  Foundations are defined as charities, but increasingly they influence the legislation that shapes our primary institutions and they drive the policies of international agencies like the World Health Organization.  According to Lindsey McGoey’s new piece in the fall Jacobin magazine, The Philanthropy Hustle, they blur the lines between between charity and business.  McGoey’s subject is the Bill and Melinda Gates Foundation, the world’s biggest philanthropy, whose endowment is $42 billion, and which every year makes grants of $3 billion.

“(M)ore and more, corporate philanthropy is not about corporations giving money to charity,” explains McGoey. “Corporate philanthropy today is about private, tax-exempt donors such as the Gates Foundation giving their charity to corporations.”  McGoey continues: “(I)t’s not true that foundations must direct grants only to charitable entities.  They are free to offer donations to for-profits that fulfill the foundation’s charitable mission—an extremely permissive criterion that donors such as the Gateses are interpreting in novel and unprecedented ways.” Much of McGoey’s  discussion is unrelated to education—the Gates’s Foundation’s gift of $11 million in 2014 to Mastercard to create a wireless payment system in Kenya—gifts to international organizations that encourage the use of expensive hybridized seeds in the developing world, seeds that may be unaffordable for farmers.

Then there are the “gifts” to for-profits that have been shaping what has become understood in the United States as “corporate education reform.”  “In 2010, the Gates Foundation offered $1.5 million to ABC News and a little over $1.1 million to NBC in 2011 ‘to support the national education summit.’  The following year, the Gates Foundation gave another million to NBC, this time for the more vague purpose of ‘inform(ing) and engag(ing) communities.'”  McGoey reports that in 2011 the Gates Foundation granted Scholastic $4,463,541 to support “‘teachers’ implementation of the Common Core State standards in Mathematics.” Gates donated $817,468 in 2012 to Tutor.com, a large on-line tutoring company that charges school users for its services, “to create an ‘on-demand’ professional development system geared at math training for middle and high school teachers.” Gates has granted more than $3.5 million to BetterLesson Inc., which “circulates free online lesson plans to teachers but charges schools a service fee.” All of this is justified because these services are said to help teachers implement the Common Core Standards across the nation’s public schools, a Gates priority, but at the same time Gates is directly supporting the bottom line of these businesses.

McGoey wonders whether all this matters: “Obviously, a number of Gates Foundation’s grants have directly benefited private companies, their management teams, and their shareholders.  The question is, even if this contravenes IRS private benefit rules, does it really matter?  On the one hand, the money going to for-profits is a lot less than grants geared to non-profit organizations—the foundation has given away over $33 billion to date, and the vast majority has gone to non-profits.  On the other hand, it’s not just about the money—it’s the precedent.  If a grant to Scholastic or Mastercard can be justified as charity—then why not a tax-deductible donation to Goldman Sachs or News Corp or Monsanto?”

McGoey concludes her piece with a hundred-year-old warning from the Guilded Age about philanthropy’s limitations: “‘I can conceive of no greater mistake,’ commented William Jewett Tucker, a theologian who went on to to become president of Dartmouth College, ‘than that of trying to make charity do the work of justice.'”

I encourage you to read McGoey’s article.  Here are posts on this blog on the subject of the Bill and Melinda Gates Foundation.

Public Schools Serve the 99%, Are Increasingly Driven by Wealthy Donors and Thinkers

Public education is the quintessential institution of the 99 Percent—the families of the roughly 50 million children and adolescents enrolled in public schools across America.  The problem is that the interests of the children in the nation’s more than 90,000 public schools are not currently driving education policy.  If you wonder about the truth of this allegation, you need only read recent reports about all the ways the One Percent are buying and promoting research, promoting particular programs, and investing in public policy and the politicians who dominate state governments.

American education is being shaped by the vast fortunes of today’s mega-philanthropies like Gates, Broad and Walton, by Wall Street investors and hedge fund interests, by giant corporations like Pearson who influence policy through the American Legislative Exchange Council, by the Silicon Valley crowd—the Michael and Susan Dell Foundation, and Laurene Jobs and Eli Zuckerberg, even by Reed Hastings, the Netflix titan.  Part of this is the result of tax laws that favor those in the investment class—both inadequate tax rates for the wealthy and laws that give privileged treatment to large fees collected by hedge fund managers.  It is alleged, of course, that such tax policies will encourage investment and grow the economy, but today’s tax policies enrich those at the top while leaving the public unable to fund essential infrastructure and public institutions.

Here is how the political philosopher Benjamin Barber describes our situation: “First a privatizing ideology rationalizes restricting pubic 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.” (Consumed, p. 131)

This week the NY Times provided new evidence of the power of wealth in public education in Kate Taylor’s piece on the power of the One Percent in policy and philanthropy affecting the students in the New York City Public Schools.  Taylor reports that Bill de Blasio, NYC’s new mayor, is less well connected than his predecessor Michael Bloomberg; de Blasio’s lack of access to the One Percent is hurting philanthropic giving to a private foundation that supports enrichments and experimentation in New York City’s public schools:

“Mr. Bloomberg and his first schools chancellor, Joel I. Klein, were connected to a world of wealthy donors in a way that Mr. de Blasio and his chancellor Carmen Farina are not.  The Fund (for Public Schools), which was started in 1982, was little known until Mr. Klein recruited Caroline Kennedy, a friend of his wife’s, to oversee it.  Ms. Kennedy attracted a high-powered board and persuaded some of New York City’s biggest corporations to lend their support.  Many of the major education philanthropists who emerged in the last two decades were also philosophically aligned with Mr. Klein, who infused the school system with the DNA of the private sector.  He promoted privately run charter schools as an alternative, used test scores to guide important decisions, and replaced schools deemed to be failing.”

Mayor de Blasio was elected by New Yorkers on a platform that disdained inequality in the city— a tale of two cities, separate and unequal—and he is being punished for abandoning the investment class.  His schools chancellor Carmen Farina is a lifetime public school educator with a sterling reputation as a public school leader.  Taylor reports that the Fund for Public Schools has raised only $18 million in the fiscal year that will end on June 30; under Mayor Bloomberg, the Fund averaged $29 million in annual philanthropic gifts. There has also been ongoing  pushback against de Blasio and his education policies from Wall Street interests who call themselves Families for Excellent Schools and who have underwritten the massive “Don’t Steal Possible” television ad campaigns that promote the well connected charter chains over the interests of traditional public schools.

And again this week on a national scale, Anthony Cody challenged Bill Gates and the work of the Bill and Melinda Gates Foundation. Cody, a retired science teacher from the public schools of Oakland, California and now a writer, has taken upon himself the responsibility for challenging, from the point of view of a public school teacher, the policies of the Bill and Melinda Gates Foundation.  Cody has insisted on meetings with Bill Gates and leaders at the Foundation, and last year he published a book, The Educator and The Oligarch: A Teacher Challenges The Gates Foundation In a blog post earlier this week, Cody once again confronts Bill Gates, who spoke recently of the Gates Foundation’s work on education in a CNBC interview.

In the interview Gates defended the priorities of the Gates Foundation: charter schools, mayoral control of school districts, portfolio school reform strategies and the dangerous power of elected local school boards and teachers unions as entrenched institutions.  Cody charges Gates has not paid attention to the damage such philanthropic investments have caused:  “The man is  highly intelligent, and describes himself as a ‘technocrat.’  He speaks as if he were a scientist, citing research and statistics to support his views and even calling the work his foundation sponsors ‘experimental.’  But I have worked closely with scientists before, and one thing I have noticed is how carefully they attend to the results of their experiments.  And in medical science, great care is taken to monitor potential adverse effects on human subjects.  If there are signs that harm is occurring, experiments must be discontinued, even if they are not complete.  Gates has used billions of dollars to promote an experimental course of reforms… yet he seems remarkably incurious about the results we are already seeing.”

Five years ago Diane Ravitch raised the alarm about the power of mega-philanthropy in education policy.  “(I)t is worth reflecting on the wisdom of allowing education policy to be directed or, one might say, captured by private foundations.  There is something fundamentally antidemocratic about relinquishing control of the public education policy agenda to private foundations run by society’s wealthiest people; when the wealthiest of these foundations are joined in common purpose, they represent an unusually powerful force that is beyond the reach of democratic institutions.  These foundations, no matter how worthy and high-minded, are, after all, not public agencies.  They are not subject to public oversight or review, as a public agency would be.  They have taken it upon themselves to reform public education, perhaps in ways that would never survive the scrutiny of voters in any districts or state.  If voters don’t like the foundations’ reform agenda, they can’t vote them out of office.  The foundations demand that public schools and teachers be held accountable for performance, but they themselves are accountable to no one.  If their plans fail, no sanctions are levied against them.  They are bastions of unaccountable power.” (The Death and Life of the Great American School System, pp. 200-201)

As the gap between the wealthy and the rest of us has grown wider, the power of private money has increasingly undermined the public system of education that has historically distinguished our society.  With all the problems and challenges that can be legitimately directed at public schools, public education remains the only institution where it is possible systemically to address the needs and protect the rights of our society’s children.  As public institutions they are accountable to citizens if we choose to hold them accountable and to make them work.