How Billionaire 'Philanthropy' Is Fueling Inequality and Helping To Destroy the Country

[xchrom]

http://www.alternet.org/economy/philanthropy-trouble

Peter Buffett, the second son of billionaire investor Warren Buffett, worries that the state of philanthropy in America “just keeps the existing structure of inequality in place.” At meetings of charitable foundations, he says “you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left.”

Describing the stunning growth of what he calls a “charitable-industrial complex,” his recent New York Times op-ed reads in confessional style: “People (including me) who had very little knowledge of a particular place would think that they could solve a local problem.”

An insider’s critique from someone like Peter Buffett is certainly welcome. Charitable giving, after all, has seen a meteoric rise in recent years, virtually unchanged amid a historic global recession. In what the National Committee for Responsive Philanthropy calls a “New Gilded Age of Philanthropy,” the ballooning fortunes of the 1% seem to mirror levels of giving by foundations:




As Buffett suggests, this growth in elite largesse, totaling $316 billion in 2012, has done little to combat economic inequality. But the problem isn’t just one of ineffectiveness. A recent paper published in the Journal of Economic Inequality shows philanthropy hasn’t simply failed to meet its goals; it’s made the situation worse.

[TBF]

1. He's correct -

the thing with philanthropy is that it is another band-aid trying to prop up capitalism.

It is used by the wealthy to give an illusion that they actually care what happens to the other 90% of the planet, while they collect their tax deduction for "donating". Meanwhile, folks who can't find job will decide to start yet another "non-profit" in which they will collect donations and while they are not "profit-seeking" they can certainly give themselves a salary etc.

It's a sham.

[alcibiades_mystery]

2. Exactly right...it is also neoliberal in its essence

as one begins from the (false) premise that we have no other means of meeting human needs. Relying on the fortunes of so-called philanthropists, or even small voluntary donations from a large group of ordinary folks, has never been adequate to human need.

[TreasonousBastard]

17. No, it hasn't been, and a few years ago several bishops were...

shocked at the idea, proposed by some libertarian fools, that Catholic Charities could make up for killing off WIC and other programs.

They said flat out that they were a drop in the bucket and it's the government's job to deal with the big problems.

The point, however, is not so much the amount of money, but in attitude. All of the great, and many not so great, religions have had charity as a core of their beliefs, and their leaders and founders have made a point of giving. This was not simply to get and give the money, but as a moral counterpoint to a certain innate selfishness we tend to, and to focus what charitable instincts we have.

It really should not make much difference whether it's private or public charity.

[handmade34]

3. yup

their way of telling us what we need....

[marmar]

4. k/r

[awoke_in_2003]

5. "global recession"

The wealthy are not affected by that. Recessions are for little people

[TreasonousBastard]

6. And here I thought this was going to tell me...

why I shouldn't give money to the Red Cross or my local charities and outreaches for the homeless. I just gave $150 bucks last night to such a program-- was I wrong? And should the Gates Foundation really just fold up and give all its money to the IRS? Or, preferably, me?

Guess not. Instead, it goes into a somewhat admittedly legitimate screed about billionaires funding programs that help themselves, but doesn't make the important distinction between funding a hospital wing and a self-serving economic study. One is philanthropy, the other business.

Truth in advertising, people.

Of course billionaires are going to be self-serving. How the hell did most of them get that money in the first place? And, they do have the money to propagate some lousy ideas. But, blaming them for every little thing that goes wrong is kind of silly.

[progressoid]

11. Which is why the title has "philanthropy" in quotes.

the point is that these billionaires' call their donations "philanthropy" when, in fact, they are business transactions. And unless we are billionaires, this article doesn't apply to our relative pittance donations to the Red Cross etc.

[TBF]

12. It's not about whether you personally are a good or bad person

it is about systemic challenges and whether capitalism is serving the majority of people. Your defense of billionaires (and the system) is cute. And by cute I mean disgusting.

[TreasonousBastard]

15. You call that a defense? And what is your preferred alternative...

to the present system? A workable one, I hope. And one which has already shown to be effective in bringing whatever goals you might want to see for society.

For the record, I don't believe in private property rights and would love to see wealth and income caps-- they sort of exist in Europe and Japan, but are more by force of custom, not law.

Oh, and instead of an estate tax, an income tax on the heirs.

But, I'm absolutely, positively convinced that nothing I mentioned here, and some other things that might really shock, will ever happen in my lifetime, so I deal with what is.

[TBF]

16. I don't reply to red-baiting. nt

[JDPriestly]

27. Funding a foundation to write a history of the philanthropist's family is a classic one. I have

seen that.

[TreasonousBastard]

31. I've seen that, too. They think they're so clever...

and some truly believe they have something worthwhile to contribute, as opposed to actually having something to contribute.

My whole point in sticking my nose in here is that you can't pigeonhole anyone. We get all het up when someone tries to define all the poor and homeless as the same, but it's OK for us to define the rich as all the same.

Donald Trump is an example of the useless rich. He built a few things, but mostly blew the family fortune. And yet he writes books about his genius. Carl Icahn takes us back to the robber baron days, where nothing is created but his fortune. A fortune made largely through destruction.

But, then there's Bill Gates, who built an empire and in the end gave most of it away to feed people in Africa. And Andrew Carnegie, an enigma who believed his employees would just piss away decent wages if he paid them, but believed his place was to make a fortune to give away to help those workers.

There was an article somewhere a while back about a bunch of Wall St. dudes and Silicon Valley millionaires who, in their 30's or 40's, just decided they had enough money and started to find ways to give a lot of it away. I personally met a guy many years ago who sailed his boat down to St. Maartin, fell in love with the place, sold his boat and bought a bar with the money. Called his Wall St. office and told him he quit. There's a lot of that going on. Not enough, though, so how do we encourage more?

And what about the Kochs? We hold them as evil incarnate, but they seem to truly believe their business practices are for the good of the world, not just themselves. And they do give away a lot of money in the right places. So, just how do we work out slowing them down and getting some more environmental responsibility out of them while still seeing gas at the pumps?

[ctsnowman]

7. K & R

[WillyT]

8. K & R !!!

[unblock]

9. some excellent food for thought. capitalism rewards geniuses of supply with tons of money

but then this money is spent by these same people, who are hardly geniuses of demand. this is a problem whether they spend it on yachts, mansions, exotic cars, or philanthropy.

the giving in philanthropy is partly a telling point that this "titans of industry" recognize that our system has its failings and this is the best they appear able to do to remotely address it.

the fact is that any system that lets any one amass tens of billions of dollars is fundamentally flawed and no amount of philanthropy can cure that problem. someone like bill gates or the walton family are able to amass such astounding sums because it's accepted that they simply do not need to share the wealth more when they accumulate it in the first place. wal-mart has screwed over many, many suppliers and short-changed employees; and microsoft has put many other software companies out of business by leveraging off their operating system near-monopoly and/or buying them out at unreasonably low prices, and then overcharging customers who have had few alternatives.

there's not nearly enough money in philanthropic giving to address the problems that arise from this messed-up system and the people who are giving it are not wise enough in using such funds effectively.

[hfojvt]

23. the point is not that they are stupid

you make it sound like you think they really ARE trying to help people, but they are just too stupid to know how.

But some of their "charitable" giving is like this

"The Kochs have tapped many useful allies, academic and non, in their collegiate ploys. A year before the FSU story, Inside Higher Ed exposed how administrators at Clemson University cultivated the Koch Foundation to build its “Institute for the Study of Capitalism,” receiving $1 million for the effort. BB&T, the financial institution whose former chairman and CEO John Allison heads the Koch-backed Cato Institute, regularly pays universities to chair favorable professors, typically in economics. Cooperative institutions are rewarded with Koch dollars as a bonus. American University’s Investigative Reporting Workshop found 10 such universities, where BB&T-chaired professors coincided with Koch cashflow."

Oh, look, they gave $1,000,000 to "education". An "education" which will teach young people THEIR philosophy. Young people will then "learn" the awesomeness of free enterprise, the evils of regulation, progressive taxes, unions, and social welfare spending. Their beautiful minds will not be troubled to hear anything about poverty or inequality.

Isn't education great, Ms. Hill?

[unblock]

24. i agree, you're making a different point.

i think some of them are genuinely trying to help, some of them are merely trying to salve their consciences, and some of them are just cynically getting tax-deductible advertising/politicking.

in any event, my point is that at best they are trapped in the ways of thinking that led them to success gathering up the wealth in the first place. the greed, the authoritarianism, the me-ism, etc. it's remarkably hard to have those attitudes, and have them so richly rewarded, and then be a truly effective giver. these people just can help but try to turn some of whatever they do back to their own advantage.

why on earth would bill gates, who dropped out of college, simply donate to a college with no strings attached? it doesn't make sense. he might, in fact, donate to a college, but it would be done in a self-serving way and/or corrupting way.

[mountain grammy]

10. Oh My God.. Thank you Peter Buffet. I've been saying this for years.

The 1% of my little resort town built us a $5million repertory theater. It's beautiful, but only used 3 months of the year. Meantime, half our streets are unpaved and our elementary school closed two years ago. Most locals have no health insurance and are barely living on 3-5 months of steady work and crumbs the rest of the year.

The right wingers running the TAX EXEMPT charity that built the theater crow that no government money was used to build this theater... indeed. $5million was TAX EXEMPT, while our taxpayer funded schools are closing.

"..philanthropy hasn't simply failed to meet it's goals; it's made the situation worse." You're goddam right it has!

[JDPriestly]

28. +1000

[Egalitarian Thug]

13. The "Charitable foundation" is the new Trust. n/t

[Starry Messenger]

14. k&r

Taxes not "charity".

[lumberjack_jeff]

19. The irony is that high taxes create more charity.

People don't give because they have a lot of money, they give because it avoids taxes.

[Starry Messenger]

22. I thought I read that corporate taxes are quite low in the US.

I was thinking we need to tax a little closer to the source. I know that billionaires do this with their personal fortunes to dodge taxes. Which I still think there must be a loophole there we can close, but I'm on my way out the door to work and can't look it up right now.

I keep thinking of Michael Moore talking about the higher tax rates of the post-war era and how people were still quite wealthy.

[lumberjack_jeff]

18. If you're a nonprofit in the arts, life is good.

You want a grant to take an orchestra someplace? Fund a interpretive dance troupe whose schtick is blue suits? No problem!

It's not so good if you're a social services nonprofit for people with developmental disabilities or mental illness. All our grant applications mention art programs for this reason. If your disability doesn't impair your ability to make art (or at least crafts) that rich people will buy, then you're okay, otherwise not so much.

[JDPriestly]

29. People like to give to children.

Try funding shelters for homeless men of color. It's tough as you point out. I agree with your post. Thanks.

[hfojvt]

20. one key to both articles seems to be the quotes

the word "philanthropy"

The problem is not perhaps real philanthropy, but the thing that passes for "philanthropy".

Because, as I have mentioned before, things like the Cato Institute and the Heritage Foundation are also technically "philanthropy". So rich people, absurdly enough, can get a tax deduction for donating to groups whose mission is to shape public policy in ways that benefit the rich.

They do not mention another problem I have with philanthropy - from my own point of view. If I give, say $100, to Feeding America, then my money is not just going to feed hungry people. Some of it is also going to pay the $400,000 salary of their CEO and other upper management.

Maybe only a small fraction, and those are very large organizations, but as a guy making $12,000 a year, I don't really want to contribute even a nickel to somebody's $400,000 salary.

[JDPriestly]

30. If you are only making $12,000 per year, you should not be giving much to charities.

The problem for non-profits is that successfully writing grants or managing a large program, for instance, require staff that is articulate, can write and plan and prepare budgets then answer to a white shirt and tie board of directors. So non-profits can't pay very low salaries once they are doing a lot of work. The start-ups can, but once they get a heavy-duty board of directors and some complex programming, they have to pay at least middle class salaries.

Running a medium-sized to fairly good-sized nonprofit is a tough job. Not worth a $400,000 salary. But you won't get a CEO for $12,000 per year either unless the non-profit if a religious organization that provides housing, and meals, etc.

[Safetykitten]

21. So, someone on the inside let the cat out of the bag. Interesting and what I thought.

[Omnith]

25. Charity hasn't helped Africa much

[JDPriestly]

26. I witnessed this from the vantage point of grant writing for a non-profit that served the homeless.

It isn't a matter of bad people. It is a matter of too great a disparity of wealth.

I spoke to a European visitor who had ventured to the toy warehouse and sales area in downtown LA today. That area is right adjacent and within our Skid Row. He was horrified and reminded us that you just don't see poverty like that in Austria.

Speaks very poorly for American philanthropy. Where does the money go? Well, one place is private schools for the children of the rich and of the "right" religion (depending on the view of the philanthropist). That is just one example of a good cause that does not speak, however, for those in greatest need.

We need a special commission to review philanthropy, giving and the use of the tax code exemption for charitable giving. The commission should take an inventory of the pressing social problems in the country and then juxtapose that with the charitable contributions and where they are going.

A mathematical study of the ratios of giving to the severity of problems would be quite interesting, quite embarrassing for the rich, I suspect.