P O S T E D B Y A L B E R T
This post is a reworking and re-publication of an earlier article titled, “Big Philanthropy’s Threat to the American Way.”
My colleague Sean Stannard-Stockton is convinced that “[t]he Second Great Wave of Philanthropy will be characterized by the emergence of small, widely disbursed donors who co-create the social sector. But big foundations are going nowhere.”
I’m less convinced. Big foundations will continue to set the agenda in ways big and small. They have a special meaning and promise that the field will never be able to ignore.
It was during the time of the great robber barons of the late 19th and early 20th centuries that the first—and some of the largest—American foundations were created. In our own Gilded Age, the captains of industry outdo one another with their philanthropic gifts as corporate profits increase and wages continue to shrink as a proportion of the nation’s GDP.
According to some critics, it’s no accident that grand philanthropic gestures coincide with moments in our history when wealth becomes concentrated in very few hands and the gap between the rich and the poor becomes significantly large. They argue that now, as in ages past, philanthropy has functioned as a social safety valve, redistributing just enough wealth to keep people in low-income communities from becoming uncontrollably militant.
I don’t know how to assess that kind of argument.
Dramatic philanthropic gestures are not confined to our shores. Not long ago, Hong Kong billionaire Li Ka-shing announced that he would give a third of his $19 billion fortune to charity. This was followed days later by news that Mexican billionaire Carlos Slim, the world’s third richest man, would match peso for peso any amount invested by Mexican or foreign foundations in Mexican social work. Over time, I believe we can expect to hear more announcements like these from people who made their fortunes in states with relatively weak social safety nets. It’s much less likely, for example, that a Swedish philanthropist will emerge to grab the headlines from the Buffetts and the Gateses. That country has a progressive tax that functions to redistribute wealth, and a cradle-to-grave welfare system that obviates the need for many privately supported charitable organizations.*
In the United States, the social safety net is tenuous and under constant attack. Because foundations often fill the gaps left by retreating sources of public support, they’re sanctioned by government and given fairly wide latitude in their operations. But if they go too far—if, as Bill Schambra, director of the conservative Bradley Center for Philanthropy and Civic Renewal warned, they begin to “undermin[e] traditional sources of authority”—then it’s these sources of authority who mobilize to curtail their power.
We see this in Schambra’s warning, near the end of his op-ed, that the forces of law and good order** “may not be so complaisant about philanthropy’s license” if it “drift[s] carelessly and inadvertently into … a revolutionary undertaking.” We see it also in the constant vigilance that nonprofits need to exercise in order to preserve important advocacy rights.
Clearly some conservatives, represented by Schambra and others, are concerned that under the leadership of liberals like Gates, Buffett, and Soros, philanthropy will become the snake that bites its own tail. Rather than forever satisfying themselves with dressing the wounds inflicted by the inevitable convulsions of American-style capitalism, or with performing triage on those who don’t fare well under its rules, these philanthropists might simply decide to change the system. If unchecked, they might succeed in helping to pass meaningful campaign and lobbying reform. They might help introduce a national healthcare sytem, or shore up support for a public safety net worthy of the richest nation on earth.
Perhaps it’s our attenuated sense of social responsibility that makes big philanthropy’s interventions appear necessary in the first place. But big philanthropy also has, I believe, the potential to be a civilizing force can help us evolve toward our full humanity.
Innovation in the sector, as my colleague Sean points out, is important. But sheer scale can’t be easily ignored.
* The White Courtesy Telephone Center for Advanced Studies recently adduced Ruesga’s Law, represented symbolically as φ α g / (s • w), and read as “phi is proportional to g divided by the product of s and w.” Here φ is the measure of philanthropic activity in a given state, g is the state’s GDP, s is the degree to which industries in that state are socialized, and w measures the state’s degree of “welfarization.”
** In this passage, Schambra deputizes “the American people.”