Nonprofit Chronicles

Journalism about foundations, nonprofits and their impact




Foundations say they want to challenge inequality. The truth is, they often perpetuate it. For better or worse, Bill Gates, Michael Bloomberg, the Buffett family and a growing number of hedge fund and technology billionaires use their large-scale giving to extend their influence at a time when rich people already have inordinate clout. This undermines democracy by further concentrating power in the hands of a few.

So, at least, argues David Callahan in his new book, The Givers: Wealth, Power and Philanthropy in a New Gilded Age. The founder and editor of the digital journalism website Inside Philanthropy, Callahan has written a smart and fair book, backed up by lots of reporting, even if he can’t quite decide whether to be inspired or alarmed by the way the new power elite uses philanthropy to extend its influence. He writes:

Cheerleaders for philanthropy see nearly everything that big givers do as positive, while critics can be just as myopic and, at times, paranoid. The deeper I’ve dug into today’s mega-giving, the more I’ve come to feel whiplashed between hope and fear. This is a trend that is profoundly exciting and inspiring–but also very scary if you’re worried about civil equality in the world’s oldest democracy.

What’s clear from The Givers is that, for many mega-donors, philanthropy is one more way to advance their agendas around such heated issues as education, climate change and abortion.

How you feel about this philanthropic power probably depends on whether you agree or disagree with the views of any given philanthropist.

“It’s great when you like what they’re doing,” Callahan said during a recent book talk at the New America Foundation in Washington. “It’s not so great when you don’t like what they’re doing.”

Some examples:

Education: The Gates Foundation aggressively promoted the Common Core standards that define the knowledge and skills students should gain in their K-12 education. It did so by spreading more than $200m across the political spectrum, to big teachers unions, business organizations, associations of state officials and think tanks on the left and right. “What followed was one of the swiftest and most remarkable shifts in education policy in U.S. history,” wrote Lyndsey Layton, in the Washington Post in 2014. Gates bristled at the idea that he has too much political influence. “I don’t think wanting education to be better is a right-wing or left-wing thing,” he told her. But, as Callahan writes: “Bill and Melinda Gates, two private individuals, have helped determine what tens of millions of American children in public schools will learn every year–and how they will learn, with changes in the teaching of math and other subjects.” The Gates send their children to private school.

Climate change: With a $50m donation, the biggest gift to the Sierra Club in its history, Michael Bloomberg, who was then mayor of the city of New York, financed an aggressive war on coal plants that helped close more than 200 plants. Lots of other forces came into play, of course, including cheap natural gas and the lower costs of renewable energy, but Bloomberg was so pleased by his return on investment that he gave the Sierra Club another $30m in 2015. Good news? Sure, if you care about climate change, but not if you live or work in places that depend on coal. Recently, Bloomberg Philanthropies said it will grant $3m to three organizations building new economies in coal communities.

Abortion: You won’t learn much about the Susan Thompson Buffett Foundation from its website, perhaps because the foundation, which is chaired by Warren Buffett’s daughter, Susan A. Buffett, devotes most of its philanthropy to sexual and reproductive health and abortion rights, according to Callahan. In 2015, according to its Form 990, the Omaha-based foundation gave away about $350m, with more than $50m going to national Planned Parenthood, millions more going to its local affiliates, and big donations going to abortion providers and advocates of abortion rights including the National Abortion Federation, the NARAL Pro-Choice America Foundation and the National Women’s Law Center. (Disclosure: My wife works there.) This is fine with me. It’s not fine, presumably, with voters and elected officials who believe that abortion is murder.

CallahanIn The Givers, Callahan  writes that rich philanthropists are, quite literally, remaking the landscape of cities and countries. Billionaire George Kaiser is giving $350m to underwrite a vast riverfront park in Tulsa. By putting up their own money, Barry Diller and his wife secured public funds for parks and public spaces on New York’s West Side, a wealthy neighborhood, at a time when parks have fallen into disrepair in places where the city’s poor live. “What sort of way was that to to make decisions about public spaces?” Callahan asks.

Sometimes, all it takes to accumulate philanthropic power is to be born into the right family. Howard Buffett is, by all accounts, a thoughtful and decent man, but it’s a bit odd, isn’t it, that he is spending tens of millions of dollars to build hydroelectric plants in the Congo? (Imagine the reaction if a Chinese billionaire brought similarly grand ambitions to America.) The children of Michael Bloomberg, fracking billionaire George Mitchell, tech titan David Packard, Walmart founder Sam Walton and numerous Rockefellers are among those who wield unearned power.

Most Americans would prefer democracy, Callahan writes:

We don’t like the idea of having our destinies shaped by a bunch of trust fund kids, most of whom are only faintly acquainted with the real-life struggles of ordinary people or the challenges faced by small businesses or how key parts of social–like, say, public education, work on the ground.

Callahan is especially concerned by philanthropy that is expressly intended to influence public policy. “Should you give the same tax deduction to a campaign to abolish food stamps as you would to a donation to a local soup kitchen?” he asks, pointedly. 

All that said, we live in a democracy, however imperfect, that exercises checks on philanthropic power. Philanthropists have mostly failed to remake public schools, or to drive aggressive efforts to curb climate change. Funders on the left and right have joined forces to support criminal justice reforms, saying that our country has an “overcriminalization” problem and an “overincarceration” problem, but Attorney General Sessions is ordering tougher sentencing, including for nonviolent drug offenders.

At the very least, though, Callahan reminds all of us — reporters, academics, citizens — that philanthropy needs more scrutiny. The default response to charitable giving by the wealthy is gratitude. But if we think about philanthropy, not merely as an expression of generosity, but as an exercise of power — tax-subsidized power, no less — we’ll approach well-to-do philanthropists and well-endowed foundations with the skepticism they deserve. 


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