The Importance of Criticizing Philanthropy

An aggressive—even at times an antagonistic—engagement between the public and their benefactors shouldn’t be considered a mark of incivility. It should be considered a democratic imperative.
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John D. Rockefeller with his son, John Jr., in 1915. (Wikimedia Commons)

Last month, readers of the Chronicle of Philanthropy, the trade journal of the nonprofit world, were treated to a memorable op-ed. It was written by John Arnold, a 40-year-old former Enron natural-gas trader and hedge-fund founder who, with his wife, ranked third on the 2013 list of the nation’s most generous benefactors. “Attacks and Vitriol Will Not Deter Me From Supporting Fixes to Public Policy,” the piece’s headline announced, and it went on to document the “intensely personal public attacks” Arnold had endured in retaliation for his contributions to the causes of education, criminal justice, and pension reform. He was falsely charged with attempting to make his donations surreptitiously, he claimed, and had been the target of “selective reporting” regarding his partisan sympathies (smeared, for instance, as a “right-wing ideologue,” without a mention of the fact that he raised money for Obama). And he’s been subjected to a steady stream of “juvenile insults” (one critic quipped that he had the “jug-eared face of a Division III women’s basketball coach”). That last one, evidently, stung.

These days, we’ve grown used to billionaires staking claims to victimhood; witness, for instance, venture capitalist Tom Perkins comparing the media’s focus on income inequality to the Nazi’s perpetration of Kristallnacht. But such laments tend to involve the “makers” grousing about their rough treatment at the hands of “takers.” Arnold’s op-ed aired a different grievance: He spoke not as an accumulator of a fortune, but as a redistributor of one. This was the defiant cri de coeur of the persecuted philanthropist.

It’s always a bit uncomfortable to see a private citizen taking his knocks in the public square. We probably shouldn’t take much pleasure in the spectacle. Yet in the midst of this latest Gilded Age, as the prerogatives of concentrated wealth march onwards with little resistance, an aggressive—even at times an antagonistic—engagement between the public and their benefactors shouldn’t be considered a mark of incivility. It should be considered a democratic imperative.

For much of the 20th century, philanthropists could expect a less-than-welcome reception from much of the public. When Standard Oil-founder John D. Rockefeller attempted to secure a federal charter for his Foundation, politicians and progressive journalists competed with one another to denounce his project. (Congress rejected the request and Rockefeller settled for incorporation in New York). According to critics, these new foundations, unprecedented in their scale and scope, posed a direct challenge to federal authority; as the head of a Progressive-era congressional investigation into their practices declared, they represented “a menace to the future political and economic welfare of the nation.” The debate about the legitimacy of large benefactions became so heated that in 1909 one New Orleans newspaper quipped that philanthropy had become “the recognizable mark of a wicked man.”

At mid-century, Americans witnessed another surge in the suspicions directed toward philanthropy and yet another series of Congressional investigations into foundations. This time the ill-winds blew mostly from the right; these latest, populist, and often reactionary assaults associated foundations with the liberal and internationalist political orientations of the Eastern establishment. Philanthropy, these critics charged, engaged in “thought control” by determining the information the public had access to; abetted tax evasion and perpetuated dynastic wealth; and posed a threat to small businesses, and, more generally, to the traditional American way of life. As the chief counsel of that first Progressive-era congressional investigation explained, while its work was grounded in the concern that “foundations would be the tool of reaction,” by midcentury, “the most articulately expressed fear has been that the foundations have swung from that position far to the left, and now they are endangering our existing capitalistic structure.” Yet whether issuing from the left or the right, these attacks converged around a recognition of the threat that great private wealth posed to American democracy. Philanthropists came to take this suspicion for granted, especially when they were compelled to make public justifications of the tax privileges they enjoyed; public ambivalence to their vocation was one of the burdens of the great wealth they bore.

Then, for a brief, balmy season at the closing decades of the century and at the opening of the new one, something changed: Philanthropy began to enjoy the benefit of the doubt. As the public’s faith in the efficacy of government to address the nation’s most pressing problems began to plummet, a faith in philanthropy received a compensatory boost. The increased favor also stemmed from the fact that, as the rich got richer, there was more to give. 

Charitable giving in the United States jumped from $13 billion in 1996 to nearly $32 billion a decade later. Although it only accounted for a relatively small fraction of the total, a few major benefactions issuing from the emerging tech and financial industry titans grabbed the public’s attention. The media's fascination with the promise of philanthropy peaked in June 2006, when investor Warren Buffett pledged more than three-quarters of his massive fortune, some $31 billion in all, to the Bill and Melinda Gates Foundation. The news, declared Princeton ethicist Peter Singer in the New York Times, heralded a “golden age of philanthropy.” The media coverage philanthropy received tended to reflect this enthusiasm: According to an analysis by Foundation Works, 99 percent of all stories about philanthropy published between 1990 and 2004 were positive in their orientation.

It is safe to say that the golden age is over. Not that philanthropy has lost all its luster—there are still plenty of folks who consider it the best hope for, in the words of the Rockefeller Foundation charter, “promot[ing] the well-being of mankind throughout the world.” But there is now, once again, a significant and vocal faction willing to call those ambitions into question. In part, the pushback can be traced to the nation’s mounting uneasiness with income inequality and to the spread of an economic populism that refuses to regard the concentration of wealth charitably.

Trends in philanthropic practice have also had a hand in courting these suspicions. Over the last several decades, an increasing number of philanthropists have sought to leverage the funds at their disposal to tap into the much vaster resources of the federal and state governments. Shaping public policy has become a central preoccupation with many of the nation’s leading funders. As Steve Teles, Heather Hurlburt and Mark Schmitt point out in the most recent issue of Stanford Social Innovation Review, while philanthropy has achieved notable successes in this arena over the last quarter-century, the political terrain has changed over that time to make the enterprise considerably more perilous. Whereas once philanthropy could comfortably pose as a disinterested provider of expertise and analysis, holding itself at a safe and decorous remove from the partisan fray, the hyper-partisanship that has infected politics in the recent decade has made that self-image impossible to sustain. The public has now been primed to view philanthropists as ideological combatants in a messy, brutal battle for political power over the instruments of governance. If philanthropy is not now “the recognizable mark of a wicked man,” it is often the mark of an ideologically driven, partisan one.

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Benjamin Soskis is a fellow at the Center for Nonprofit Management, Philanthropy, and Policy at George Mason University. He is the co-author of The Battle Hymn of the Republic: A Biography of the Song that Marches On.

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