In a recent Wall Street Journal opinion piece, Karl Zinsmeister argues that 2019 witnessed a new “war on philanthropy.” As Zinsmeister discusses in the article, the commentariat around philanthropy has reached a new pitch of criticizing billionaire philanthropists. From David Koch’s “manipulation” of democratic politics to Robert Smith’s gift to pay off $34 million of student loan debt, billionaires on the left and the right are subject not only to skepticism but to outright criticism.
This war on philanthropy does not appear to be slowing either. As recently as this past Sunday, Amazon billionaire Jeff Bezos was panned for his measly $690,000 gift to help Australian wildfire relief efforts. Since this level of giving only amounts to a very small percentage of his salary, it apparently lacks real generosity. It is an odd time indeed when giving away nearly one million dollars to relief efforts fails to meet the standards of decency.
The thrust of Zinsmeister’s argument is that those waging this war on philanthropy fail to recognize that the philanthropic sector is profoundly democratic. While the ultra-wealthy do contribute a significant portion of giving in America (which stands to reason), the millions of nonprofits in our nation are supported by hundreds of millions of average Americans, too.
As Zinsmeister argues, philanthropy is not “an instrument of plutocracy.” On the contrary, “America’s highly decentralized philanthropy is one of its most pluralistic and democratic elements. Philanthropy disperses authority, gives individuals direct opportunities to change their communities, and lets nonmainstream alternatives have their day in the sun.”
I must admit that Zinsmeister seems a bit too bullish on the democratic nature of philanthropy. The expanding wage gap and consequent wealth inequality do seem to hearken a “new gilded age.”
This is Steve Dubb’s concern in a Nonprofit Quarterly piece responding to Zinsmeister with some important data points. Zinsmeister is correct that the total charitable dollars in America continues to rise each year (even if that number ostensibly went down slightly in 2018 when accounting for inflation). But Dubb is also correct to point out that the total number of donors has been going down for years.
More dollars are flowing to charities from fewer individuals. This doesn’t quite amount to a “billionaire boys club” in the nonprofit sector, as some worry. But neither does it represent some purely democratic institution. Indeed, this trend should cause concern.
Though Dubb accurately reports the data and accurately identifies the trends as problematic—that there is a burgeoning class divide in philanthropy—he nevertheless misidentifies the real problem.
First of all, Dubb laments billionaires giving away “too much” money. What would we have instead, a cap on how much money the wealthy can donate? I am sensitive to the risks associated with wealthy donors wielding too much influence—but I am much more concerned about the strapped budgets of nonprofits of all sizes. God forbid that we discourage elite giving just so that the rich can wield less power!
We should notice, too, the schizophrenia within the war on philanthropy. Critics of philanthropy worry about the disproportionately large donations by the ultra-wealthy. Meanwhile, Bezos is criticized for only divesting himself of $690,000.
This war suffers from sloppy thinking and internal contradictions.
Dubb says that “even if the takeover is not complete, elite dominance is hard to miss.” This makes sense if we are exclusively enamored by elite cultural centers and bloated philanthropies—but the country is much bigger than the narrow interests of well-heeled philanthropies in Silicon Valley, New York, and D.C.
Bill Gates thinks that his philanthropy gives him more influence than a politician (which Dubb finds aggravating to say the least). True indeed that this is a privilege available to very few individuals. Nevertheless, the vast majority of total charitable dollars runs from average citizens to average nonprofits.
In other words, elite billionaire giving amounts to outsized influence in discrete cases—but when we look at the entire charitable sector, billionaire philanthropy amounts to a small (if growing) portion of charitable giving. Careful thinking—assessing the issue in its entirety—requires that we look more comprehensively at charitable giving rather than letting the few at the top suck all of the oxygen and attention out of the room.
As we might suspect from a progressive perspective, Dubb’s article looks to the government as the locus of the problem and, more importantly, the locus of the solution. While Zinsmeister celebrates the ability of the nonprofit sector to strengthen civil society, help the disadvantaged, test out new ideas, and much else without government intervention, Dubb is insistent that real change can and should come from the government.
The most proximate culprit he finds is the new and higher charitable tax deduction which allegedly disincentivizes giving by average Americans. As I’ve argued before, while this fear is not unintelligible, it is still mistaken. Individuals are not donors because of a tax deduction. Individuals are donors because they want to advance a mission, they want to help their neighbor, strengthen their community, feed the hungry and clothe the naked—and much else besides. The charitable deduction has put more money in the pockets of millions of Americans and cannot reasonably be blamed for a shrinking number of donors (a phenomenon which long preceded the 2018 Tax Cuts and Jobs Act).
Shifting donor demographics—more charitable dollars (a good thing) from fewer households (a bad thing)—has a two-fold cause. First of all, increasing wealth inequality in America. As more money is pooled at the top, it is increasingly difficult—both in fact and as a matter of perception—for middle-class Americans to give money away.
Stagnant wages certainly make giving more difficult for millions of Americans. More than this, though, the perception (advanced by television, movies, and our increasing interconnectedness) that most people have more stuff than us—and so we should have more stuff to be happy—makes engaging a charitable mindset increasingly difficult.
More proximately, however, the bigger issue is our thinning social fabric.
Again, individuals donate money to help their communities and their neighbors. When civic participation and civic associations are on the decline, we don’t know our neighbors. When we don’t know our neighbors, we care less about our neighbors. There may be several issues making charity more difficult for many Americans—wealth inequality not least among them—but the deepest issue is our anonymity to, and distrust of, one another. It is far easier to “engage a charitable mindset” if I know and care about my neighbors.
There are legitimate questions to be raised about our nation’s wealth disparity and the disproportionate influence that wealthy Americans wield today. But waging a “war on philanthropy” and criticizing the billionaire class for giving both too little and too much is not a constructive path.
As long as there is money, it will be unequally distributed. As long as there are richer and poorer people, the richer people will wield more influence. The benefit of philanthropy and the nonprofit sector is that it provides an avenue for even average Americans to have their say.
Middle-class Americans might never endeavor to overhaul public education—but they can set up a local nonprofit to help local youth get a better education. Average citizens might never endeavor to “cure all disease”—but they might start a local initiative to relieve the suffering of the sick in their back yard.
Better than criticizing the billionaire class, we might begin by opening our own purse strings. Average generosity from average Americans investing in their average communities has the capacity to invigorate community life and strengthen our social fabric. Into the void of our anemic civic life steps the billionaire donor class—but a healthier and stronger civil society would work against donor control and limit their influence, while better leveraging their generosity to achieve shared goals.