Meet the Private Equity Tycoon at the Forefront of America's New Phony Philanthropy

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http://www.alternet.org/corporate-accountability-and-workplace/meet-private-equity-tycoon-forefront-americas-new-phony



There used to be a thing we called “philanthropy.” Even though the concept of corporate-funded charity has raised thorny ethical questions since its Gilded Age birth (asking, for example, why companies give money away while workers struggle), the idea historically at least had some coherence. Industrial titans like J.D. Rockefeller and Andrew Carnegie took profits from their firms, however troubled their origins, and generally channeled them toward the disadvantaged and afflicted, funding public libraries, museums and disease research among other socially useful projects. The rich, in other words, idiosyncratically and undemocratically, gave to the poor.

In our new Gilded Age, however, even this arrangement seems like a golden vision from a picture-book past.

Stephen Schwarzman, the private equity tycoon who cofounded the Blackstone Group, is the face of a new kind of philanthropy. To borrow the language of Silicon Valley and Wall Street, he has “innovated” novel ways in which the rich can give back to themselves, cementing and heightening their power while claiming they’re doing the rest of us a favor. Ostensibly charitable ventures need no longer benefit the disadvantaged at all; they just need to be marketed that way.

In the late ’90s, even before he amassed much of his $6.5 billion fortune, Schwarzman conducted an early trial of this idea at his alma mater Yale, proposing a $17 million donation in exchange for renaming the freshman dining hall for him. The offer was ultimately turned down after Yale discovered it was actually “a contribution to one of Blackstone’s investment partnerships on Yale’s behalf.” The university wouldn’t receive money until the fund was liquidated, essentially exposing it to a bet on the donation’s ultimate size. Years later, Schwarzman found more success with a $100 million gift to the New York Public Library, but only after a dispute over how many times his name would be engraved into its façade, another brand-building gambit that soured in the end.

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1. kick

[HughBeaumont]

2. The turn-of-the-century Robber Barons were only generous because of legacy . .

. . . not because they had any hot desire to part with even one red cent of their wealth.

http://www.brookings.edu/research/opinions/2007/03/18useconomics-easterbrook

Now subtract Buffett and his generous gift from the group, and the rest of them begin to look downright miserly, handing to others a mere $7 billion of a combined net worth of $584 billion—or just over 1%. Numbers from the philanthropy watch organization Giving USA show that Americans as a whole annually give away about 0.5% of their net worth. So, except for Buffett, society's top givers donate to others at only a tad higher rate than the population as a whole. That's, well, pathetic. And that's just counting top givers, not the super-rich who give away little or nothing.

Microsoft mogul Paul Allen, net worth $16 billion, gave away $53 million in 2006, according to Slate—one-third of 1% of his fortune. Software magnate Lawrence Ellison, net worth $20 billion, gave away $100 million—half of 1%. Pierre Omidyar, founder of EBay, net worth $7.7 billion, gave away $67 million—less than 1%. Nike tycoon Philip Knight, net worth $7.9 billion, gave away $105 million—slightly more than 1%.

Donations of this sort, in the multimillion-dollar range, inevitably mean a lot to charities or schools, and of course it is certainly preferable that the super-rich give millions rather than nothing at all. But for those whose net worth soars into the billions, even $100 million is a pittance compared with what they have the means to give. Financier George Soros, net worth $8.5 billion, in 2006 gave away $60 million, which sounds like a lot until you reflect that it is less than 1%. Soros rails against the inequities of capitalism. Yet when it comes to his own disproportionate stash, that's another story.

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Carroll speculates that the super-rich won't give away money they know they will never use for two reasons: because they love money, and because extreme wealth confers power. We know already that people who give their lives over to loving money surrender their humanity in the process. As for clout, Carroll quotes Howard Hughes: "Money is the measuring rod of power." That $53 billion ensures Gates will be treated with awe wherever he goes. If he gave away 78% of his wealth like Carnegie did, he might be universally admired, but he would no longer be treated with the same degree of fawning reverence. He might even, someday, find himself in the same room with someone who has more money!

[cprise]

3. K&R