Read 08.02.17

"In many ways, today’s new philanthropy is exciting and inspiring. In other ways, it’s scary and feels profoundly undemocratic… Philanthropy is becoming a much stronger power center and, in some areas, is set to surpass government in its ability to shape society’s agenda. To put things differently, we face a future in which private donors— who are accountable to no one— may often wield more influence than elected public officials, who (in theory, anyway) are accountable to all of us." - David Callahan 

            Philanthropy is a difficult subject to discuss. In contrast, its theories are simple: you donate money, money garners interest, interest conducts research, research publishes studies, studies attract attention, attention attracts donations. And in between, policies get drafted and experimented. But how much do we, or at least, I, really know about the gears that turn this cycle of “moral” spending?

            To Callahan, modern philanthropy is a double-edged sword. This may not make sense at first. Isn’t philanthropy a good thing? How could there be a negative consequence to giving? To fully understand Callahan’s perception, we have to see what exactly philanthropy looks like today.

"Today’s big philanthropy is arising in an era when the wealthy already seem to control so much territory in America– whether it’s politics through their campaign contributions or ownership of the tech and media companies that shape our culture. Now, through their giving, they are wielding even more influence." (8)

            As stated, it isn’t uncommon to see the wealthy participate in philanthropy. Given their surplus of money and hopefully good intentions, it makes sense that they use their funds to advance their personal ideas of utopia into reality. The question is, to the views of these few people who rest at the top of the pyramid reflect the views of the public? As Callahan phrases, there is a lack of regulation in overseeing how the 1% (metaphorical) shapes society.

"While CEOs can be overthrown by shareholders, and senators rejected by voters, nobody can stop billionaires from using great wealth to push their schemes for society, however misguided." (9)

But what if we give them the benefit of the doubt? The money they’re spending is used to fund research and development that theoretically, should make the world a better place for everyone. And I agree, we hear of scientific breakthroughs and revolutionary advancements that are funded by such donations. However, as Callahan states, it isn’t the risk of their donations being misguided or misused, but “that their rising power will further push ordinary Americans to the margins of civic life in an unequal era when so many people already feel shoved aside by elites and the wealthy” (9).

            So here we have a “tension between philanthropic freedom and civic equality” (292). Do we keep allowing huge donors to influence public policies or restrain them to ensure that everyone’s voice is heard equally? “The stakes are rising as private donors become more powerful in American society and, at the same time, existing oversight becomes less able to keep up and to protect the public interest” (293). There doesn’t seem to be an easy solution (as do most complex problems in society). Callahan suggests three things:

1.     More transparency of who’s funding what

2.     Limiting politicized philanthropy that may not reflect the public’s voice

3.     Increasing accountability of the philanthropic sector.

            Number three is a bit trickier, since the effects of philanthropic giving is difficult to quantify. Additionally, it would require regulation for which non-profits are receiving how much from who. “Broadly speaking, while we know it’s largely the wealthy who make use of the charitable tax deduction, we don’t know which communities or groups benefit from those gifts and how” (300). Furthermore, it could be argued that applying these regulations would restrain the likelihood of really making a change, by implementing an extra middleman that oversees spending. “A recent study found that even as the number of nonprofits has grown in recent years, the enforcement capacity of the public watchdogs overseeing nonprofits— most notably, offices of state attorneys general— has largely remained flat” (302).

What do I think of all this?

            Overall, I agree with Callahan on his points. I do believe that wealthy donors use their funds to better the world we live in, although I wouldn’t be surprised to see a few bad apples taking advantage of tax-exempt charitable giving. On the note of balancing philanthropic freedom and civic equality, I was reminded of another book: The End of History and the Last Man by Francis Fukuyama. Given that I read this back in high school, I have a limited understanding of the book, but it’s overall points were clear. There is no superior or the right way of governance. From dictatorship to communism and democracy, each practice has its own pros and cons. The conclusion is, society is just a reflection of the leaders’ thoughts. What matters is the moral compass of those who lead. In the case of philanthropy today, the circumstances are similar. We have to trust the wealthy that they spend their money in ways that do not solely advance their own agenda, but the people’s. It is inevitable that the rich hold more influence than the average person. Money means something in society, and it won’t lose its significance anytime soon. So, if the rich stays rich, how can we achieve civic equality? I believe the answer lies in transparency, as Callahan points out. We have to accept the fact that the wealthy will spend their money how they see fit. However, when such donations/spending’s are released to the public, we obtain the ability to react to them, as we see fit. This creates a relationship in which wealthy donors must keep in mind the public backlash that might result from conflicting interests, as they attempt to shape society. However, I wonder how this would play out if the people, when uneducated and unfamiliar to a specific subject, raises their voice against decisions that could benefit society. In such cases, it would be the donors’ responsibility to convince the people accordingly, limiting philanthropic freedom by requiring extra effort from those who want to solve societal problems. This brings us back to the challenge of balancing philanthropic freedom and civic equality. Unsurprisingly, there is no clear-cut solution. Regardless, I am excited to see how philanthropy will continue to change the world we live in today.

Favorite Snippets:

“In just the past decade, the world of philanthropy has grown even more crowded with newcomers, further splintering it and ensuring its lack of any cohesive, shared mind-set. In turn, that fragmentation reflects what has happened with America’s upper class as a whole. The stampeding wealth boom of recent decades, spread across many industries and regions, hasn’t just vastly expanded the ranks of the rich; it’s greatly diversified who these people are and how they think.” (35)

“One global study of high-net-worth individuals found that for nearly half who engage in philanthropy a “sense of responsibility” is a top motive.” (38)

“Few ordinary people will ever have such an experience— of knowing that other people are living because we did something to give them that chance. When giving has impact, the empowerment that comes from it tends to spur greater giving.” (41)

“If you’re rich, you can pay the salaries of policy experts to advance your beliefs within the corridors of power. You can underwrite books and magazines to sway broader audiences. You can support lawyers who use litigation to achieve change. You can finance pop-up PR blitzes, like the Campaign to Fix the Debt.” (76)

“We hear a lot about how politically polarized America is these days. What we don’t often hear is that, like the rest of us, the wealthy are also more divided than ever. This means that even as the new philanthropic power elite has come to wield ever more influence, that clout is rarely directed in any one, uniform direction when it comes to the great issues of the day.” (89)

“Power comes in many forms in public life. But one of its most tangible manifestations is the ability to shape the communities in which millions of people live.” (94)

“For example, for a few thousand dollars, today’s donors can save a human life by giving for anti-malaria bed nets. Investing in vaccinations is another cheap way to have an impact. In effect… it’s a buyer’s market right now for philanthropists who want to make a difference, with plenty of low-hanging fruit to choose from in a world awash with needless suffering and preventable deaths.” (121)

“A broader point… is that philanthropy can have its greatest impact when it helps to scale up experiments that change how government operates. Even as critics accuse billionaires of trying to privatize education, parks, and other areas of public life, these donors often see their job quite differently’— as pushing a calcified public sector to step up its game and developing new solutions for government to invest in.” (132).

“A strength of philanthropists is that they can play the long game, without worrying about the next election or quarterly earnings report. They can chip away at a problem for years, against all political odds, waiting for a window of opportunity to finally open.” (154).

“The broader point here is that philanthropists of all kinds are getting more organized. And those pushing a policy agenda have been especially keen to team up with one another so that they can collectively wield more clout. On the other hand, donors are building overarching power networks that knit together philanthropists who broadly share the same ideological worldview. On the other, they are coming together around particular causes, as we saw with those focused on women’s issues.” (209)

“As further budget cuts kick in over the coming years, and mega-donors step up their giving, the shift toward private financing for scientific exploration, cultural expression, and advanced learning is likely to accelerate.” (241)

“The upshot is that we’re moving into an era in which dreamers who want to see big advances in areas like the arts, science, and higher education often feel they should be talking to people like Elon Musk, Paul Allen, or Alice Walton— the billionaires who actually have the resources to make stuff happen.” (260)

“Whatever the case, one thing is clear: It’s not just the new philanthropists who are wielding more power these days. It is those they are deputizing to dispose of their wealth, a group whose ranks are fast expanding as more foundations are born and grow. In coming decades, this segment of America’s elite class will loom ever larger in national life.” (282)

“In a democracy, all powerful institutions that affect our lives need vigilant oversight. Philanthropy is no exception. Right now, it’s one of the last major sectors of U.S. society that gets to basically do as it pleases, answering to no one. That can’t last. We live in an age of skepticism, remember, and the public trust in all institutions has fallen in recent decades. The charitable sector Is doing better than most others, but it hasn’t been immune from the overall trend. Judging by some of what we’ve seen in recent years— the backlash to Mark Zuckerberg’s outsized philanthropy, the intense criticism of charter school funders, the allegations about the Clinton and Trump foundations— more Americans are getting nervous about how the wealthy are using philanthropy as a tool of influence in an age of inequality. Those fears have risen even though most people are in fact clueless about just how much influence philanthropy does wield in U.S. society. As I’ve shown in this book, the power of the givers is much greater than many people realize.” (304)

“Too often, inequities in the charitable sector mirror those of society at large, with the people controlling most of the wealth calling most of the shots.” (307)

“Corporations are rightly obsessed with understanding consumer preferences so that they can improve their products and services (which is why we’re all bombarded with surveys from hotels, airlines, banks, and so on). Philanthropists should be equally fixated on pressing their ear to the ground in the communities in which they operate— and listening with a humble readiness to learn.” (308)