I completely understand the temptation for people to associate wealth with greed. As much as I may cringe when “cancel culture” comes after the leaders of our economy, it makes sense to me that the masses will rally behind this type of sentiment. But why the incessant second-guessing of the affluent class’s motivations – even when discussing charitable donations?
With the summer of the pandemic behind us and the season of giving around the corner, I see today as the right time to address this matter.
A rising critique from the Left, perhaps expressed most prominently by Anand Giridharadas in his charity-bashing book Winners Take All, is that philanthropy is some kind of anti-democratic ruse. Instead of letting Americans donate their hard-earned money to help those less fortunate and build a better world, the liberal economists would have us believe we’re better off legislating redistribution of wealth.
Critiques of philanthropy have entered the realm of the absurd, and it isn’t hard to rebut these vitriolic attacks with the simple fact that charity does actually help society. Big money is getting things done where big government lags, both at the grassroots level and in halls of power.
Even in the most advanced capitalist societies, poverty exists – and private money can address this challenge where hands are bound by bloated bureaucracy. It’s the flow of cash from the private sector that keeps economies pulsing. And when it comes to strengthening the institutions of democracy to feeding the hungry, donations are keeping humanity afloat.
The Left’s Cynical Critique
Critics, mostly hailing from the Left, say that donations from wealthy elites are undemocratic, distractions from the unjust ways that wealth is created, and are designed to benefit rich donors more than recipients. They claim that by allowing and incentivizing large philanthropic donations, we are reinforcing oligarchical structures.
This argument is vastly overstated. While it goes almost without saying that any system has room for improvement and that regulation over nonprofits is far from perfect, the criticism of philanthropy has gone too far – and discouraging donations, especially in these challenging times, can be devastating.
Responding to Giridharadas, Phil Buchanan, who heads the Center for Effective Philanthropy, notes that, “We can lament, as critics often do, that the wealthy aren’t taxed more heavily and, again, I agree. But, meantime, here we are with wealthy people who have a desire to give back. That instinct to give should be encouraged, not derided, as it increasingly is.”
Despite the negative claims, big giving can be extremely beneficial – and not just to the donors. Here are some key truths about philanthropy that the Left denies.
1. Philanthropy Is Genuine
The left touts anecdotal soundbytes about philanthropists gone bad, for example the Sackler family that used arts donations as a smokescreen to cover their profiteering on addiction. These examples, though few and far between, are fodder for the popular but unfounded claim that big donors never care about the causes they support.
For every one Sackler there are far more genuinely altruistic donors. Take, for example the recent announcement by Karmagawa, a non-profit foundation and social-media charity community, co-founded by stock trader and philanthropist Timothy Sykes and photographer Mattheau Abad. The foundation will distribute $1.6 million to 15 charities with local teams on the ground addressing a variety of emergency situations.
The aid will help suffering children and families in Yemen; the victims of the explosion in Lebanon and their families; to build schools, libraries and feed families that have been hit by the COVID-19 pandemic in Indonesia; and to help cleanup the oil spill in Mauritius and help their wildlife and natural habitat recover.
Giving at the grassroots level is known to be more effective at galvanizing change than large, bloated organizations. When donors like Sykes spread their money across multiple smaller organizations, and take the time to curate the causes they support based on need and potential impact, this indicates genuine dedication.
2. Philanthropy Influences Policy, for the Good
The left vastly exaggerates the degree to which philanthropy funds lobbies. While they claim that philanthropy is eroding our democracy and unfairly influencing politics, many mega donors are actually dedicating mega bucks to fixing our broken system.
Political philanthropists including hedge fund leader John Arnold and DaVita executive Kent Thiry invested a total of $40 million over the past decade on initiatives designed to curb partisan gerrymandering.
Liberal virtue signaling doesn’t outweigh the benefits of big giving – and there are plenty of givers on the Left that benefit from giving and utilize their wealth to exert influence. Bill Gates has poured millions of dollars into school reform efforts and manipulated legislation on charter schools through donation, and then attested to his ability to run a successful political campaign by virtue of his extreme wealth.
There’s no reason to get partisan or cynical about giving. Stating otherwise is nothing but doublespeak. As Sykes told me via email, “I think that if you use your power and your money and your foundation and you’re following the right way for good, not evil, I think that there’s a lot of potential… I will always be grateful for every single luxury, every single dollar.”
No matter who is signing the check, if that money is making an impact where big government fails to reach, it’s the critics who should be called cynical, and not the donors.
3. Philanthropy Is Good for the Economy
If “cancel culture” has its way, fear of bad press could chase away donors. One of the big critiques of charitable organizations is that they are abused as tax shelters. So what? Even if donors do get a tax break, that money is still getting to people and organizations that need it – how could that possibly be vilified?
Plus, philanthropy isn’t just good for the recipients, it’s also good for the economy. Critics downplay the important role private giving – and volunteering – play in a country where the nonprofit sector accounts for about 5% of the economy and 10% of the workforce.
Shaming donations, as Buchanan says, “is an insult to this country’s vast and diverse nonprofit world, supported in significant part by philanthropy, which employs one in 10 Americans.”
4. Philanthropy Gets It Done Better
In the most illusionary of critiques, those who slam philanthropy claim that taxes fund social programs. If the rich just paid income and capital gains tax instead of donating it, they’d tell you, then the country would be swimming in welfare state dollars and all would be well.
That’s really lovely, but also highly unlikely. Our bloated government is ill-equipped to adequately address the most pressing needs of America’s most marginalized groups. Nor has the government shown much aptitude at streamlining and improving its own processes, and more money won’t fix that.
To fill the gaps that the government leaves behind, we need generosity. Studies have found that Republicans who favor less government intervention donate more. This has nothing to do with the benefits of giving to the donor – it stems from a belief that the private sector can make an impact where the feds fail.
“Obviously, the government has more power, more funding, so they can be more effective,” Sykes said. “But a lot of these big government entities and even big charities, they get bogged down in red tape so individual donors, smaller charities sometimes can really get the job done, especially when there’s an emergency situation.”
Yes, Giving Does Good
One remarkable example of big money making big change is the astronomical philanthropy of Mackenzie Scott, Jeff Bezos’s ex-wife. With $1.67 billion committed to a wide variety of causes.
Scott’s generosity exposes those who scoff at donations as truly petty. When she announced her charity picks, Scott explained that the organizations she chose “offer a daily reminder that we can each carry more than we imagine. And they offer an opportunity to invest our good fortune in change, no matter what form our good fortune has taken.”
Scott is not alone. Many corporate big hitters are propelling genuine change with philanthropy – for example, Warren Buffett, the Walton family, George Soros, and 47 other philanthropists who collectively gave out $15 billion in 2019 alone.
Even if donors do get a tax write off, $15 billion is nothing to scoff at. Millions of Americans benefit from philanthropy, and this makes throwing shade on generosity ridiculous and paranoid.