Is Philanthropy Bad for Democracy?

Sunday, April 28, 2019

What is it

In a liberal democracy, individuals should have the freedom to give money to charities of their choice. But there’s a difference between charitable giving from ordinary individuals and philanthropic giving from extremely wealthy individuals. Whose interests are served when the wealthy give? Should the state continue to encourage big philanthropy with massive tax breaks for the rich? Or should it focus more on taxing extreme wealth? Is big philanthropy destroying democracy? Josh and Ken take alms from Stanford political scientist Rob Reich, author of Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do Better.

Listening Notes

Josh and Ken begin the show by debating whether philanthropy is driven by compassion or ego. Ken believes that philanthropy is borne out of a desire to better the world and that it has a positive impact — funding research and building institutions, among other things. Josh, on the other hand, views philanthropy as a way for the elite to disguise the unscrupulous means by which they made their money. Rather than reward the wealthy for spending money on “monuments [for] their own vanity,” he argues, they should be taxed more. Citizens, instead, should decide how the money is spent. 

The hosts are joined by guest Rob Reich, political scientist at Stanford University and author of Just Giving: Why Philanthropy is Failing Democracy and How It Can Do Better. The thinkers discuss the issue of private donor influence on public services and how it undermines democracy. As an example, Ken points to the private police force that patrols Chicago’s Hyde Park neighborhood and is hired and paid for by the University of Chicago. Rob criticizes this use of private funds to direct a public service of the most basic sort and argues that these funds should be directed to the government instead. Josh questions the efficacy of shifting private funds to the government, asking whether we can be certain that the government will spend the money more wisely. Rob’s response is that while there is no guarantee, democracy is not meant to be a mechanism for maximally-effective public spending anyway. Its purpose instead, he claims, is to allow citizens to have a voice and to make progress over time. This ability can be limited, however, if funds are constrained by private donors and the strings that they might attach to their contributions. 

In the final segment, the hosts and Rob discuss the future of philanthropy. Rob points to one potential instigator of change: a tax bill passed by Trump that allows only the wealthiest individuals to itemize their charitable contributions. This bill, he believes, will make it more apparent that charitable giving is a mechanism for the rich created by policy and may incentivize people to fight against philanthropy as a deterrent to their interests. Finally, the hosts discuss the implications of the perpetuity of foundations. Rob makes the case that foundations should have a time-limited existence so that the “dead hand of the donor” cannot control future generations.

  • Roving Philosophical Report (seek to 6:57) → Holly J. McDede takes a closer look at debates about whether to accept donations from the elite, which have gone on from the Gilded Age to present day. She delves into the case of the Sackler family, which owns the company that produces OxyContin, and its members’ attempts to use philanthropy to boost their social clout and be seen as patrons of the arts rather than creators of an opioid crisis. 
  • Sixty-Second Philosopher (seek to 45:57) → Ian Shoales examines philanthropy’s role over time in sustaining art and culture.
 

Comments (4)


Harold G. Neuman's picture

Harold G. Neuman

Friday, April 12, 2019 -- 10:41 AM

I made some remarks about

I made some remarks about philanthropy on an earlier post. The gist of those was something like: Philanthropy is another way for rich people to support their personal beliefs and ambitions, and look good while doing it. I am unimpressed with corporate philanthropy as well, because corporations want economic success and are not ethically averse to disingenuous or unethical ways of going about getting it. How 'things, in the broadest sense of the term, hang together, in the broadest sense of the term' is not so easy to determine when there is a lot of money and prestige at stake. It all gets pretty 'fuzzy'...
but, as Lou Dobbs once opined, we do have the best government money can buy. Which does say SOMETHING...just what that something is is indeterminate.

Harold G. Neuman's picture

Harold G. Neuman

Saturday, April 20, 2019 -- 10:34 AM

I had an alternative thought

I had an alternative thought (no, not an alternate fact---those are for someone else to assert; deny; refute or just laugh at...). the question was: Is philanthropy bad for democracy? Maybe the question ought to be framed the other way round? Democracy, for whatever else it could or should be, does not require philanthropists, or their largess, in order to function, equitably and according to certain constitutive and institutional facts and rules. If we look at campaign contributions and other sorts of financial aid, in support of political gain, the personification of democratic ideals and principles takes on another, less idealistic hue: some of the SOMETHING, referred to in my comment of 4/12/2019. Think about it this way, if you please: democracy which is based more on money changing hands than on one person, one vote, can hardly be squared with the democracy envisioned by our forebears. Or, to rework the now-less-than-historic phrase coined (by someone) and repeated by Mr. Dobbs: the best government money can buy IS NOT the best government. I know this runs counter to the current, popularly accepted norm. But, there are only so many ways of looking at this. I'm just calling it the way it looks. No matter how one looks at it, philanthropy is getting a bad rap, and THIS democracy does not give a flip...

mirugai's picture

mirugai

Tuesday, April 30, 2019 -- 3:53 PM

I completely agree, as I

I completely agree, as I usually do, with HGN. And when I don't agree, he prompts me to re-evaluate my own positions...this is called "doing philosophy." Here is a post I ran on philanthropy recently that still applies to this discussion.

Charitable Contributions

Walking with a friend the other day, we came upon graffiti on a wall: “Tax the Rich.” My friend said “amen.” I said “It’s not about how much to tax, it’s about what the taxes are going to be used for.” (Of course in a real democracy the people would probably have the right not just to vote on the tax rate, but to vote on government spending too. Congress seems paralyzed to handle these matters anyway.)
Let’s say I’m upper middleclass in the income department. I already pay about 70% of my income to taxes (federal and state income, social security, sales, property, excise, tolls, licenses and permits, utility taxes, etc.). That’s a lot of taxes I already pay. We are the (second?) richest country in the world; could the amount of money wasted on warfare and imperialism and hegemony, and graft, and duplicating federal and state governmental organizations, pay for what we really need such as universal health care, free education and daycare, and guaranteed national income ($75K tax free), and infrastructure upgrade? (There should also be a cap on individual earnings of $1M per year, with the obligation to pass on the individual earnings over that down the path to each person in line in the company or family, always max $1M.)
Charitable contributions? The government in theory gives a deduction for contributions for services and support that it should ideally provide. But the elaborate system set up to allow an organization to authorize the deductibility promotes huge salaries and perks for the organizers, and all kinds of bullshit that actually keeps significant funds from reaching the intended goals. US taxpayers should get a tax deduction for charitable giving to individuals in need that are not IRS designated charities. Do you know that the IRS trusts us to pay business expenses of $25 or less without the necessity for a receipt? Why not the same for charitable giving to people in need who are not 501c3’s? Or why not trust us for giving of $100 or less? Or $1000? I meet people, working people, all the time who are so broke that they can’t take care of basics. I help them out; but even though I am doing something I think any decent government would do for them, I cannot claim a tax deduction for my contribution. The system is set up to benefit the “charitable” organization, not the purported recipients of the donations. Try to find a public record of the salaries and perks of a charitable institution.
The government is giving tax deductions to taxpayers who want to “save mountain lions” (now so “saved” that they can eat babies in urban shopping malls?), but I can’t get a tax deduction for helping my friend who can’t afford a necessary surgery.

Anoelll's picture

Anoelll

Tuesday, April 30, 2019 -- 7:08 PM

: Once one puts money in a

: Once one puts money in a charitable foundation, there is a tax write off and the money no longer belongs to the person that set up the foundation. The money has to be given to valid charitable organizations. Trump treated his “charitable foundation” as his own personal slush fund. How widespread is such abuse where a person has a substantial tax deduction and then uses the money as his/her own?

 
 

Rob Reich, Professor of Political Science, Stanford University

 
 
 

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