What’s the Meaning of Big Philanthropy?

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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.”

Comments

[Pushpin]

Please. "...small, widely disbursed donors who co-create the social sector"??

I mean, even in a communist henhouse there's gotta be one big cock.

Face it: big donors are spermanent. They define the "money shot".

(No offense, Ruesga, but I got your "full humanity" right here.)

[Pantos Serfidosky]

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.

In old country, is word for this:  Duh.

[Countess Apraxina]

"Apraxina," my father warned me, "the peasants will always be revolting."

[Albert Ruesga]

No offense taken, Monsieur Pushpin, although I'm not the only gazelle that visits this watering hole.

Pantos Pantosovich, there are plausible alternative theories, nyet? I myself don't buy the wealth redistribution theory partly because that's not what foundations do. Foundations fund an enormous variety of nonprofit organizations, some of which deliver services to poor people, others of which stage plays for senators' wives.

These nonprofit organizations do play a key role, I believe, in helping to create some measure of social cohesion, in part by keeping the experience of the poor from becoming too intolerable. But that's not what I would call "wealth redistribution."

When critics characterize private philanthropy as a "social safety valve redistributing just enough wealth to keep people in low-income communities from becoming uncontrollably militant," they attribute to it a nefarious purpose. In the first Gilded Age, the foundation was a new creation, the killer app that drove the "First Great Wave of Philanthropy," to borrow M. Stannard-Stockton's language. Wealthy people have been establishing foundations at a steady clip ever since, motivated by many factors, including a genuine desire to do the right thing. I suspect few of these more recent philanthropists have been motivated to give because they feared that otherwise the peasants would pick up their torches and pitchforks and storm the mansions of their overlords.

[Bruce Trachtenberg]

Some of these comments about whether there's a less than charitable motive behind philanthropy reminds me of the old story about the woman who tells the doctor she's worried because her husband keeps acting like a chicken. When asked why she hasn't tried harder to get him to stop, the woman replies: "We need the eggs."

We can all plumb the depths of our imagination to come up with "nefarious" reasons foundations are formed. But I also say "we need the eggs."

[The Happy Tutor]

Eggs and the Capon too.

[Pantos Serfidosky]

I make argument of this with female friend. She say, "Stop, Pantos, you wrinkle my brow."

In gentleman way I am good person and so try to see her point in view.

But here is egg:

Turn out she like brow with wrinkle, was clever test of Pantos "full humanity". Pantos fail, but live to fight more than one day. (Is why two egg.)

[Pushpin]

Pantos Pantosovich, mind your knitting. There's still plenty of dung to heap.

This dude, Gerry, made a salient comment here. An insufficient excerpt:

Ok, so we praise the gift even if the giver is suspect? At least he didn't use [it] for more goons? Presumably he had enough cash to pay as many goons as he wanted and the library money was still left over. First he steals the surplus from his workers by violently surpressing them, and then we are to applaud his generosity?

Who dat?

[The Happy Tutor]

Author of The Gospel of Wealth.

[Dr. Trotsky]

These nonprofit organizations do play a key role, I believe, in helping to create some measure of social cohesion

Correct me if my untutored impression is off, but wouldn't the primary goal of this cohesion be a group of wealthowners cohering with each other? See the dinner scene in Tristana: the saintly lady invites the poor, the halt and lame, the insane. They take over and run riot.

Incoherent rabble.

[Sally Wilde]

The giver is suspect -- of what? Of having asked the senator for a boon while playing a round of golf with him? Of having paid his workers market wages? Of having put unhealthy snacks in the company vending machines, or having cheated on his taxes?

[Albert Ruesga]

Dr. Trotsky: Wouldn't you have the kind of class coherence you describe without nonprofit action? What would it take? A few rounds of golf?

I see nonprofits contributing to social cohesion in various ways: they strengthen bonds between members of poor communities and the middle class professionals who provide services to them and who give voice to their needs and aspirations; they use the arts to channel and transform class hostilities; they create borderland spaces in which conflicting social claimants can deliberate and work through their disagreements. They provide this social glue in ways too numerous to mention here.

[Dr. Trotsky]

Albert,

I was not questioning the value of nonprofits, simply suggesting that social networking can reinforce as well as break through class lines. Philanthropic orgs become a SIG (special interest group) where members meet, establish relationships over fine wines, sometimes become clubby. The putative beneficiaries of their largesse are where?

I spend some of my time working in a nonprofit. Over time it's lost some of its passionate people, and has become increasingly staffed with people (likes hiring likes) who are indistinguishable from corporate execs, who focus on numbers and seem to forget, or not understand, the larger mission. Of course this is simply an anecdote from a sample of one.

Your own post suggests some of the necessary critical perspective from which to begin to address the laudatory accomplishments of nonprofits that you list, not without a certain irony, I suspect.