Philanthropy and
its struggle with Democratic Legitimacy
Since the first
day of class when we discussed the powerful impact that philanthropists can
have on societies, there is one aspect which I keep coming back to, regarding
the legitimacy
of philanthropy in its engagement with the democratic process.
When talking about this question, I am
regarding philanthropy on the big scale. I am talking about the huge sums that
are donated each year by Bill and Melinda Gates, Warren Buffett, Michael
Bloomberg and other influential people. We have talked a lot about the decision
making process, the strategy behind giving and the long – term effects.
However, in comparison to all the other sides we discussed about philanthropy,
I have heard little concern about the undemocratic and largely unaccountable
nature that philanthropy can also have.
Just because philanthropy is generally a
good thing (I know that good is a terrible word here but I mean it in a sense
that aims to help people and improve their situation) does not mean that it
could not pose a threat to a democratic process.
The Atlantic has
written several articles about this topic. One of them talks about Michael
Bloomberg and how he has donated $80 million to the Sierra Club, an
environmental organization in the U.S. The Sierra Club sought to shut down coal
– fired power plants across the country. The author of the article writes “In a democracy,
both sides might argue the issue of whether to shut down coal-fired power
plants to their legislators or express their preference at the voting booth.
But Bloomberg’s $80 million in donations inarguably gave a boost to the
environmentalists’ side, and led to changes on the ground.” While most of us
would probably argue that supporting an environmentalist NGO like the Sierra
Club is a good cause, this is not the point here. The point is that an
immensely high sum crucially impacted the outcome of this discussion and not a
democratic and legitimate majority vote.
David Callahan, author of
“The Givers: Money, Power, and Philanthropy in a new Gilded Age”, argues “that
instead of slow-moving foundations dispensing the fortunes of long-dead
Americans in cautious policy forays, today’s philanthropists are alive, and
very much involved in how their money is spent. They want to see rapid change
occur in their lifetimes, and they often have very specific ideas about what
that change should look like.” These aims and following decisions often relate
to re – shaping policy in the city and country where they act.
Furthermore, philanthropic
acts are rarely subject to judicial consequences. Joanne Barkan believes that,
“When a foundation project fails—when, say, high-yield seeds end up forcing
farmers off the land or privately operated charter schools displace and then
underperform traditional public schools—the subjects of the experiment suffer,
as does the general public. Yet the do-gooders can simply move on to their next
project. Without countervailing forces, wealth in capitalist societies already
translates into political power; big philanthropy reinforces this tendency.”
According to her, the goal should be to reduce its leverage in civil society
and public policymaking while increasing government revenue.
According to Gara LaMarche,
philanthropy is very well able to act like agribusiness, oil, banks or any
other special – interest pleader when it thinks its interests are jeopardized.
Gara
LaMarche states that “(…) the collective leadership of American philanthropy—a
leadership, by the way, that had been with few exceptions silent about the
redistribution of wealth upward through the Bush tax cuts, silent about cuts in
social programs, silent about the billions of dollars spent on the wars of the
last decade—found its voice only when its tax exemption was threatened, and
preferred to let the government go begging for revenue elsewhere, jeopardizing
the prospects for health-care reform, in order to let rich, well-insured people
go on shielding as much of their money as possible from taxation.” This helps
to make clear that even the most well – intentioned and high – minded impulses
that animate philanthropic acts have the capacity to undergo the democratic
process. Something that even the most well – intentioned ideas should not be
doing.
https://www.dissentmagazine.org/article/plutocrats-at-work-how-big-philanthropy-undermines-democracy
Layla,
ReplyDeleteI really enjoyed your take on the subject and I must agree with you that the democratic process is really kickstarted when organizations start to see money heading in the opposite direction.
Actually, I was discussing a similar topic with a friend last night. We were on the topic of SuperPACs and their role in our everyday lives. The influence these giant, non-profit organizations have on our government is enormous. Wealth truly does translate to political power. A wealthy donor can make a donation to a SuperPAC at any tax deductible sum and the organization need not show who it came from and in what amount. These organizations, while some do good for the general public, are fueled by private interest and invest thousands of dollars into their agendas.
I do agree that there is a problem. I personally have no issue having large wealth donors, but I completely agree with your point that this cannot go unregulated and that it is truly important for there to be aa communal input from all stakeholders.
Great entry, Layla.
This comment has been removed by the author.
ReplyDeleteLayla,
ReplyDeleteI completely agree that there necessity is a necessity for high-standing donors to provide fiscal transparency for their donations. While reading both your post and Dylan’s comment, I am curious to what is the “democratic process” that you both refer to. Is the “democratic process” a response towards the unknown data of financial stakeholders? Is it the start of a person’s conduct of research of a fiscal year within an organization? Is it a set of qualifying guidelines that an organization’s board members place on the donations that come in to better understand its donors? I guess what I am saying is that although I agree it is crucial to gain “communal input” from possible stakeholders and involved members, I think one must first discover what information or validity is lacking that needs to be reviewed or questioned.
Once one uncovers what matters fall under this “democratic process”, the organizations that he or she interacts with will automatically benefit. His or her research will spark reflections about personal values as well as the organization itself— similar to what occurred in our own class. In fact, these reflections, when collected in surveys or interviews, for example, are quite useful on zoning in on the true “collective impact” of the intended organization.
I am curious to hear both of your thoughts on the matter. I wonder if you agree that the democratic process is a stepping stone towards a strengthened organization or if you rather think it is only a tale of the organization's fiscal inefficiency.
Well done, Layla.
Salutations!
ReplyDeleteI understood your points and agree that philanthropic acts should be subject to judicial consequences. My question regarding this is, how do you propose that these organizations or individuals be held accountable? Should there be a government agency that checks to make sure these philanthropists are donating to “good” causes? Should the government look at the ramifications of acts of philanthropy such as “high yield seeds” or “charter schools” before allowing these donations to occur? Should the nonprofit sector become regularized and streamlined through government intervention so the most amount of good can be accomplished? I talked about this some what on my comment last time to Ben. I feel that this is tricky as democracy has a very specific definition but is often stretched. Democracy means “a system of government by the whole population or all the eligible members of a state, typically through elected representatives (Mariam Webster).” Nonprofits in fact violate the definition of democracy. I would lean towards government intervention to solve this problem.
I also find the tax incentive dilemma quite interesting. As I researched further I was interested to find that “There is another element of the charitable deduction many find problematic: it consistently favors the wealthy, making it “cheaper” to give if you have more money than less. For example, if your marginal tax rate is 25%, then every dollar you donate to charity only costs you 75 cents thanks to the tax break the IRS offers. However, if your marginal tax rate is 39.6%, then each dollar you donate now costs only 60.4 cents”() What I also found was that in general more people who were less well off actually donated more than those who were more well off. (2) Also due to a recent bil passed by president Trump, Dec 23rd 2017 , it will “sharply reduce the number of taxpayers who qualify for the charitable tax deduction — a big driver of gifts to nonprofits. One study predicts that donations will fall by at least $13 billion, about 4.5 percent, next year. That decline is expected to be concentrated among gifts from the middle of the income scale…. Nonprofits have long noticed that the wealthy are more likely to cut big checks to support museums and universities, while smaller donors tend to give to social-service agencies and religious organizations. Charities fear that this shift could change how the public views donating and alter the priorities of nonprofits.(3)” This last point really strikes home with me. The whole point of philanthropy is to help the less fortunate and while museums and art are priceless they are nothing compared to a human life.
Thanks for the interesting ideas!
(1) http://hipporeads.com/philanthropy-selfless-or-tax-incentivized/
(2) https://www.philanthropy.com/article/America-s-Geographic-Giving/156259
(3) https://www.washingtonpost.com/business/economy/charities-fear-tax-bill-could-turn-philanthropy-into-a-pursuit-only-for-the-rich/2017/12/23/38b65eb6-e69a-11e7-9ec2-518810e7d44d_story.html?utm_term=.6ca4e7126bf6