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Gospels of Giving for the New Gilded Age | The New Yorker
"Are today’s donor classes solving problems—or creating new ones?"



"
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. The Giving Pledge—signed by Bill Gates, Warren Buffett, Michael Bloomberg, Larry Ellison, and more than a hundred and seventy other gazillionaires who have promised to dedicate most of their wealth to philanthropy—is the “Gospel” stripped down and updated. And as the new philanthropies have proliferated so, too, have the critiques.

Anand Giridharadas is a journalist who, in 2011, was named a Henry Crown Fellow of the Aspen Institute. The institute is financed by, among other groups, the Carnegie Corporation, the Rockefeller Brothers Fund, and the Gates Foundation. The fellowship, according to its Web site, aims to “develop the next generation of community-spirited leaders” by engaging them “in a thought-provoking journey of personal exploration.”

Giridharadas at first found the fellowship to be a pretty sweet deal; it offered free trips to the Rockies and led to invitations from the sorts of people who own Western-themed mansions and fly private jets. After a while, though, he started to feel that something was rotten in the state of Colorado. In 2015, when he was asked to deliver a speech to his fellow-fellows, he used it to condemn what he called “the Aspen Consensus.”

“The Aspen Consensus, in a nutshell, is this,” he said. “The winners of our age must be challenged to do more good. But never, ever tell them to do less harm.” The speech made the Times; people began asking for copies of it; and Giridharadas decided to expand on it. The result is “Winners Take All: The Elite Charade of Changing the World.” “I hadn’t planned to write a book on this topic, but the topic chose me,” he writes."



"Inside Philanthropy is a Web site devoted to high-end giving; its tagline is “Who’s Funding What, and Why.” David Callahan is the site’s founder and editor. If Giridharadas worries that the super-wealthy just play at changing the world, Callahan worries they’re going at it in earnest.

“An ever larger and richer upper class is amplifying its influence through large-scale giving in an era when it already has too much clout,” he writes in “The Givers: Wealth, Power, and Philanthropy in a New Gilded Age.” “Things are going to get worse, too.”

Part of the problem, according to Callahan, lies in the broad way that philanthropy has been defined. Under the federal tax code, an organization that feeds the hungry can count as a philanthropy, and so can a university where students study the problem of hunger, and so, too, can a think tank devoted to downplaying hunger as a problem. All these qualify as what are known, after the relevant tax-code provision, as 501(c)(3)s, meaning that the contributions they receive are tax deductible, and that the earnings on their endowments are largely tax-free. 501(c)(3)s are prohibited from engaging in partisan activity, but, as “The Givers” convincingly argues, activists on both sides of the ideological divide have developed work-arounds.

As a left-leaning example, Callahan cites Tim Gill, who’s been called “the megadonor behind the L.G.B.T.Q.-rights movement.” A software designer, Gill became rich founding and then selling a company called Quark, and he’s donated more than three hundred million dollars toward promoting L.G.B.T.Q. rights. While some of this has been in the form of straight-up political contributions, much of it has been disbursed by Gill’s tax-exempt foundation, which has financed educational efforts, message testing, and—perhaps most important—legal research. “Without a doubt, we would not be where we are without Tim Gill and the Gill Foundation,” Mary Bonauto, the attorney who argued the 2015 Supreme Court case that legalized gay marriage, told Rolling Stone last year.

On the right, Callahan points to Art Pope, the chairman of a privately held discount-store chain called Variety Wholesalers. Pope has used his wealth to support a network of foundations, based in North Carolina, that advocate for voter-identification—or, if you prefer, voter-suppression—laws. In 2013, pushed by Pope’s network, the North Carolina state legislature enacted a measure requiring residents to present state-issued photo I.D.s at the polls. Then the North Carolina Institute for Constitutional Law—another Pope-funded group—led the effort to block challenges to the measure. (The I.D. law was struck down, in 2016, by a federal appeals court that held it had been “passed with racially discriminatory intent.”)

It is difficult to say what fraction of philanthropic giving goes toward shaping public policy. Callahan estimates that the figure is somewhere around ten billion dollars a year. Such an amount, he says, might not sound huge, but it’s more than the annual contributions made to candidates, parties, and super-pacs combined. 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.

“It’s not just that the megaphones operated by 501(c)(3) groups and financed by a sliver of rich donors have gotten louder and louder, making it harder for ordinary citizens to be heard,” Callahan notes. “It’s that these citizens are helping foot the bill.” That both liberals and conservatives are exploiting the tax code is small consolation.

“When it comes to who gets heard in the public square, ordinary citizens can’t begin to compete with an activist donor class,” Callahan writes. “How many very rich people need to care intensely about a cause to finance megaphones that drown out the voices of everyone else?” he asks. “Not many.”"



"
Critiques of “The Gospel of Wealth” didn’t have much impact on Andrew Carnegie. He continued to distribute his fortune, to libraries and museums and universities, until, at the time of his death, in 1919, he had given away some three hundred and fifty million dollars—the equivalent of tens of billions in today’s money. It is hard to imagine that the critiques of the new Carnegies will do much to alter current trend lines.

The Gates Foundation alone, Callahan estimates, will disburse more than a hundred and fifty billion dollars over the next several decades. In just the next twenty years, affluent baby boomers are expected to contribute almost seven trillion dollars to philanthropy. And, the more government spending gets squeezed, the more important nongovernmental spending will become. When congressional Republicans passed their so-called tax-reform bill, they preserved the deduction for charitable contributions even as they capped the deduction for state and local tax payments. Thus, a hundred-million-dollar gift to Harvard will still be fully deductible, while, in many parts of the country, the property taxes paid to support local public schools will not be. It is possible that in the not too distant future philanthropic giving will outstrip federal outlays on non-defense discretionary programs, like education and the arts. This would represent, Callahan notes, a “striking milestone.”

Is that the kind of future we want? As the latest round of critiques makes clear, we probably won’t have much of a say in the matter. The philanthropists will decide, and then it will be left to their foundations to fight it out."
philanthropicindustrialcomplex  charitableindustrialcomplex  2018  elizabethkolbert  charity  philanthropy  inequality  andrewcarnegie  gildedage  inequity  disparity  wealth  inheritance  hughpricehughes  society  williamjewetttucker  patronage  ethics  wealthdistribution  exploitation  billgates  warrenbuffett  michaelbloomberg  larryellison  anandgiridharadas  aspenconsensus  georgesoros  socialentrepreneurship  laurietisch  darrenwalker  change  democracy  henrykravis  billclinton  davidcallahan  power  taxes  thinktanks  nonprofit  activism  timgill  publicpolicy  politics  economics  us  influence  artpope  votersuppression  law  superpacs  donaldtrump  equality  robertreich  nonprofits  capitalism  control 
august 2018 by robertogreco
If you really want to make a difference Mark Zuckerberg, let go of your power | Global Development Professionals Network | The Guardian
"The Facebook CEO is the latest ‘philanthrocapitalist’ to try to make a better world. But when the rich meddle with development, can they ever disrupt the status quo?"



"Occupy would never have been funded by a large philanthropic organisation, but the spontaneous global movement is almost wholly responsible for putting the issue of inequality on the political map. Large private donors are prepared to fund technocratic causes, and in more enlightened cases – “democracy”, but they’re not prepared to relinquish power and control themselves. In fact, they only serve to concentrate power further into an increasingly narrower set of ideas about how change happens.

For example, the Gates Foundation makes a decision about vaccines and requires governments to match fund the donation to access it. Those governments then have to choose between saying no to funding for vaccinating, or diverting funds from something else, such as public health or education. Gates made the de facto decision for that government. His new agricultural alliance was similarly defined: bring together large agri-business and government to improve agriculture in Africa on a technology-rich, large-land-holder led platform. Green agro-ecology approaches, despite having been proving significant success in the region where it has been applied, get sidelined.

Parmar sees this as even more sinister. “There are other priorities other than those that are publicly stated – increasing the level of power, through increasing their networks in non-western countries,” he says.

The funding arena has become increasingly narrow, focused on issues like health or education. Very few focus on voice, power or challenging the mainstream. Anyone who has filled out long funding application forms, struggling to come up with short-term targets and outcomes, will have felt the limits of the donor relationship. Indeed, most foundations are now more focused on “value for money” than ever before, in spite of the fact that development is complex, and attribution for success can’t usually be ascribed to any one intervention.

Coupled with the trend towards governments limiting the ability of charities or grassroots organisations to campaign in many parts of the world – from India to China, and increasingly on western shores – development NGOs, enabled by the funding community, are at risk of becoming little more than contract agencies who deliver basic public services while further entrenching a system of inequality and divisions. If governments are stripping citizens’ rights, if communities are divided, if resources are extracted only to benefit the wealthy elite, then we will be aiding and abetting the status quo, leading to a shrinking and less vibrant civil society in the long run. And a less vibrant and agile civil society signals a reduction in long-term development for the many. “Is there a model of power and development which is more focused on local concerns through local participation itself?” asks Parmar.

A powerful letter written by Jessie Spector, the executive director of Resource Generation, urges Zuckerberg to let go of power and to fund root causes. In an ideal world, Zuckerberg never would have been allowed to accrue this much wealth and dictate how it would be spent. But in the world of realpolitik, I would take Spector’s recommendations further, and say to Zuckerberg: set up an independent entity; don’t sit on the board; set some guidelines about tackling root causes like corporate power or tax justice; ensure smaller organisations have access to the funds without jumping through excessive hoops; make sure it’s governed openly by a broad group of stakeholders, representing gender, race, class, none of whom can sit on the board indefinitely and finally, agree to relinquish control. Only then can Zuckerberg truly begin to make a positive difference with his wealth and dent the power dynamics that dominate the funding community."
deborahdane  philanthropy  philanthrocapitalism  inequality  democracy  wealth  2016  markzuckerberg  georgesoros  billgates  power  control  influence  jessiespector  gatesfoundation  charity  charitableindustrialcomplex  robberbarrons  philanthropicindustrialcomplex  capitalism 
january 2016 by robertogreco
Mark Zuckerberg and the Rise of Philanthrocapitalism - The New Yorker
"The announcement, on Tuesday, by Mark Zuckerberg and his wife, Priscilla Chan, that, during their lifetimes, they will donate to philanthropic causes roughly ninety-nine per cent of their Facebook stock, which is currently valued at close to forty-five billion dollars, has already prompted a lot of comment, much of it positive. That is understandable. The fact that Zuckerberg, Bill Gates, Warren Buffett, and a number of other billionaires are pledging their fortunes to charity rather than seeking to pass them down to their descendants is already having an impact.

Last year, the Bill & Melinda Gates Foundation, which was founded in 2000, dispensed almost four billion dollars in grants. A big slug of this money went toward fighting diseases like H.I.V., malaria, polio, and tuberculosis, which kill millions of people in poor countries. Zuckerberg and Chan have also already donated hundreds of millions of dollars to various causes, including eradicating the Ebola virus. In their latest announcement, which they presented as an open letter to their newborn daughter, on Zuckerberg’s Facebook page, they said that the Chan Zuckerberg Initiative, the new philanthropic organization that they are setting up, would focus on “advancing human potential and promoting equality.”

It’s not just the size of the donations that the wealthy are making that demands attention, though. Charitable giving on this scale makes modern capitalism, with all of its inequalities and injustices, seem somewhat more defensible. Having created hugely successful companies that have generated almost unimaginable wealth, Zuckerberg, Gates, and Buffett are sending a powerful message to Wall Street hedge-fund managers, Russian oligarchs, European industrialists, Arab oil sheiks, and anybody else who has accumulated a vast fortune: “From those to whom much is given, much is expected.”

Speaking at Harvard in 2007, Gates attributed this quotation to his dying mother. (A slightly different version of it appears in St. Luke’s gospel.) In 2010, Gates and Buffett challenged fellow members of the ultra-rich club to give away at least half of their wealth. Since then, more than a hundred billionaires have signed the “Giving Pledge.” Some of these mega-donors, such as Buffett, are content to let others direct their donations. (In 2006, he signed over much of his fortune to the Gates Foundation.) Increasingly, however, wealthy people are setting up their own philanthropic organizations and pursuing their own causes—a phenomenon that has been called “philanthrocapitalism.”

That is the positive side. It is also worth noting, however, that all of this charitable giving comes at a cost to the taxpayer and, arguably, to the broader democratic process. If Zuckerberg and Chan were to cash in their Facebook stock, rather than setting it aside for charity, they would have to pay capital-gains tax on the proceeds, money that could be used to fund government programs. If they willed their wealth to their descendants, then sizable estate taxes would become due on their deaths. By making charitable donations in the form of stock, they, and their heirs, could escape both of these levies.

The size and timing of the tax benefits to Zuckerberg and Chan are uncertain, but they are likely to be large. In the initial version of this post, based on the open letter Zuckerberg and Chan posted on his Facebook page, and on the opinions of several tax experts, I said that the couple, in donating stock to the new philanthropic organization, would gain immediate tax credits equal to the market value of the stock, some of which could be rolled over into future tax years. Typically, that is what happens when a rich person donates stock to a family foundation or to certain types of L.L.C.s constituted for philanthropic purposes, such as ones owned by family foundations.

On Wednesday, in a follow-up post on Facebook, Zuckerberg provided more details about the couple’s plans. Evidently, the L.L.C. that he and Chan are setting up will not be seeking tax-exempt status. “By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively,” Zuckerberg wrote. “In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not.”

Even if the Chan Zuckerberg Initiative doesn’t obtain tax-exempt status, over time its activities will most likely have a big impact on the taxes its founders pay. The I.R.S. treats ordinary L.L.C.s as “pass-through” structures, and shifting financial assets to such entities doesn’t usually generate any immediate credits or liabilities. But whenever the Chan Zuckerberg Initiative issues grants to nonprofit organizations, it will almost certainly do so by donating some of its Facebook stock, and that will generate tax credits for Zuckerberg and Chan equal to the market value of the stock at that time. As the years go by and the Initiative steps up its charitable activities, these credits seem likely to add up to very large sums.

Unlike a regular family foundation, the L.L.C. may also generate some tax liabilities for Zuckerberg and Chan. If it invested in a commercial enterprise, such as an online-learning company, taxes would be owed on any profits the investment generated. And if, as Zuckerberg also pointed out, the L.L.C. sold some of the Facebook shares that he and Chan have donated to it, they would have to pay capital-gains taxes on the proceeds. But since the couple will control the L.L.C., they will be able to decide how it finances itself, and whether it sells any stock.”

If what Zuckerberg is doing were an isolated example, it wouldn’t matter much for over-all tax revenues. But the practice is spreading at a time when the distribution of wealth is getting ever more lopsided, which means the actions of a small number of very rich people can have a bigger impact. In 2012, according to

By transferring almost all of their fortunes to philanthropic organizations, billionaires like Zuckerberg and Gates are placing some very large chunks of wealth permanently outside the reaches of the Internal Revenue Service. That means the country’s tax base shrinks. As yet, I haven’t seen any estimates of the over-all cost to the Treasury, but it’s an issue that can’t be avoided. And it raises the broader question, which the economists Thomas Piketty and Anthony Atkinson, among others, have raised, of whether we need a more comprehensive tax on wealth.

Arguably, there is another issue at stake, too: democracy.

Although organizations like the Gates Foundation portray themselves as apolitical, nonpartisan entities, they aren’t completely removed from politics. Far from it. The Gates Foundation, for example, has been a big financial supporter of charter schools, standardized testing, and the Common Core. (It has also given some money to public schools.) Zuckerberg, too, has also provided a lot of money to charter schools. They featured prominently in his costly and controversial effort to reform the public-school system in Newark, New Jersey, which Dale Russakoff wrote about in the magazine last year. In the letter posted on Facebook, Zuckerberg signalled that he isn’t done with such efforts. “We must participate in policy and advocacy to shape debates,” the letter said. “Many institutions are unwilling to do this, but progress must be supported by movements to be sustainable.”

My intention, here, isn’t to enter the education debate. It is simply to point out what should be obvious: people like Zuckerberg and Gates, by virtue of their philanthropic efforts, can have a much bigger say in determining policy outcomes than ordinary citizens can. (As Matthew Yglesias pointed out on Vox, one of the advantages of registering the Chan Zuckerberg Initiative as an L.L.C. is that it can spend money on political ads.) The more money billionaires give to their charitable foundations, which in most cases remain under their personal control, the more influence they will accumulate. And relatively speaking, anyway, the less influence everybody else will have.

Some Americans—not all of them disciples of Ayn Rand—might say that this is a good thing. I have already cited some of the Gates Foundation’s good works. Isn’t Michael Bloomberg, with his efforts to reform gun laws, promoting the public interest? Isn’t George Soros, through his donations to civil-rights organizations, lining up on the side of the angels? In these two instances, my own answers would be yes and yes; but the broader point stands. The divide between philanthropy and politics is already fuzzy. As the “philanthrocapitalism” movement gets bigger, this line will be increasingly hard to discern.

So by all means, let us praise Zuckerberg and Chan for their generosity. And let us also salute Gates, who started the trend. But contrary to the old saying, this is one gift horse we should look closely in the mouth."

[via: http://hackeducation.com/2015/12/23/trends-business/ ]
philanthrocapitalism  charitableindustrialcomplex  2015  facebook  markzuckerberg  johncassidy  philanthropy  influence  corruption  democracy  power  charity  capitalism  gatesfoundation  taxes  billgates  thomaspiketty  inequality  anthonyatkinson  dalerussakoff  newjersey  education  michaelbloomberg  georgesoros  priscillachan  warrenbuffett  policy  politics  philanthropicindustrialcomplex  control 
december 2015 by robertogreco
"To Hell with Good Intentions" by Ivan Illich
"Next to money and guns, the third largest North American export is the U.S. idealist, who turns up in every theater of the world: the teacher, the volunteer, the missionary, the community organizer, the economic developer, and the vacationing do-gooders. Ideally, these people define their role as service. Actually, they frequently wind up alleviating the damage done by money and weapons, or "seducing" the "underdeveloped" to the benefits of the world of affluence and achievement. Perhaps this is the moment to instead bring home to the people of the U.S. the knowledge that the way of life they have chosen simply is not alive enough to be shared."

"I am here to entreat you to use your money, your status and your education to travel in Latin America. Come to look, come to climb our mountains, to enjoy our flowers. Come to study. But do not come to help."

[via: http://twitter.com/johnthackara/status/88500793115815936 ]

[Update 6 May 2013: An article came up today that brought me back to Illich's lecture: http://www.pioneerspost.com/news/20130410/letter-young-social-entrepreneur-the-poor-are-not-the-raw-material-your-salvation ]

[Update 27 July 2013: new URL for "Letter to a Young Social Entrepreneur: the poor are not the raw material for your salvation" http://www.pioneerspost.com/comment/20130410/letter-young-social-entrepreneur-the-poor-are-not-the-raw-material-your-salvation

and a pointer to Robert Reich's "What Are Foundations For? Philanthropic institutions are plutocratic by nature. Can they be justified in a democracy?" http://www.bostonreview.net/forum/foundations-philanthropy-democracy? ]

[Also available here: http://schoolingtheworld.org/resources/essays/to-hell-with-good-intentions/ ]

[Update 6 April 2016: referenced again http://www.laphamsquarterly.org/roundtable/missionary-go-home
and an alternate link http://ciasp.ca/CIASPhistory/IllichCIASPspeech.htm ]
education  culture  politics  travel  activism  ivanillich  1968  humanitariandesign  designimperialism  mexico  do-gooders  goodintentions  middleclass  us  latinamerica  poverty  hypocrisy  blindness  self-importance  deschooling  charitableindustrialcomplex  liamblack  robertreich  gatesfoundation  plutocracy  democracy  robberbarons  power  control  warrenbuffet  billgates  georgesoros  foundations  philanthropicindustrialcomplex  capitalism 
july 2011 by robertogreco
The Crisis & What to Do About It - The New York Review of Books
"The salient feature of the current financial crisis is that it was not caused by some external shock like OPEC raising the price of oil or a particular country or financial institution defaulting. The crisis was generated by the financial system itself...Excessive reliance on those mathematical models did untold harm....The new paradigm has far-reaching implications for the regulation of financial markets. Since they are prone to create asset bubbles, regulators such as the Fed, the Treasury, and the SEC must accept responsibility for preventing bubbles from growing too big. Until now financial authorities have explicitly rejected that responsibility."
georgesoros  finance  markets  2008  greatdepression  recession  corruption  creditcrunch  risk  investment  bubble  regulation  economics  capitalism  crisis  money 
november 2008 by robertogreco
FT.com / Comment & analysis / Comment - The worst market crisis in 60 years
"The 60-year super-boom is a more complicated case."..."The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse."
economics  georgesoros  finance  bubbles  recession  money  markets  investing  global  credit  crisis  trading  future  trade  banking  globalization 
january 2008 by robertogreco

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