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Freely Given

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Freely Given

David Callahan’s campaign to limit philanthropy is a solution in search of a problem. April 21, 2017
Arts and Culture

The Givers: Wealth, Power, and Philanthropy in a New Gilded Age, by David Callahan (Knopf, 352 pp., $28.95)

In The Givers, David Callahan, founder and editor of Inside Philanthropy, provides an exceptionally thorough and necessary service in identifying the major figures in American philanthropy—and, through interviews, exploring the causes they support and their motivations for doing so. For some readers, Los Angeles real-estate magnate Eli Broad’s passion for biomedical research and charter schools will be old news; so, too, hedge-fund billionaire John Arnold’s heterodox enthusiasms (through the John and Laura Arnold Foundation) for public-pension and criminal-justice reform. But for many readers, the detailed accounts of the philanthropy of Rockefeller and Carnegie’s contemporary heirs will be revelatory.

Callahan, however, mingles these useful accounts with a recurrent question about the concentration of societal power among philanthropists, to which he appears to believe the answer is self-evident. Regarding the support of Bill and Melinda Gates for a “common core” in K-12 education, Callahan asks: do “we think it’s okay overall for any philanthropists to have so much power to advance their vision of a better society?” As for Barry Diller and Diane von Furstenberg’s $155 million gift to support the development of a new park on Manhattan’s West Side waterfront—matched with just $40 million in public funds—Callahan asks, “What sort of way was that to make decisions about public spaces?” Regarding the $490 million that Eli and Edith Broad, among others, have contributed to support the growth and operation of Los Angeles charter schools, Callahan remarks, “Broad disputes the idea that there is anything undemocratic about his tactics. Like many philanthropists throwing their weight around in ways that ordinary citizens can’t imagine, Broad sees himself as expanding the dialogue, not dominating it.”

The theme is clear: Who elected these guys? Why should they have anything more to say about public policy (or anything else) than the rest of us? For Callahan, major decisions about public policy should be in the province of democratic government—which, in his view, has been starved by those who have kept tax rates too low and who now fill the vacuum with their pet causes and theories, supported by their ostensible generosity. Why, for instance, should Facebook’s Sean Parker have influence on finding cancer cures when the requisite expertise lies at the National Institutes of Health?

Beyond this broad criticism, Callahan offers policy prescriptions to rein in what he views as an expanding, unaccountable elite. Because  “the tax code helps amplify upper-class power,” he writes, he would limit the charitable deduction (and presumably private foundations) to causes for which “we can easily agree that the benefits are overwhelmingly positive and fairly distributed.” He would empower a government agency akin to the Congressional Budget Office to determine which charitable endeavors are definitively worthy, imagining that it is possible to derive an objective, scientific assessment from essentially values-based precepts.

Such steps would inevitably discourage and diminish philanthropy. Callahan certainly demonstrates that the wealthy today are promoting their favorite causes and institutions at a high historical rate. But, apart from highlighting the process through which rich people seek influence—by giving their money away, mind you—he fails to demonstrate that the United States is worse off as a result.

It’s worth confronting the essential question Callahan raises: what if the wealthy, to indulge their own interests, effectively hijack government to impose their agenda on the public? That would be difficult to defend, but only one example in The Givers approaches such a scenario. In 2012, Joshua Rechnitz offered New York City $40 million to build a velodrome in Brooklyn Bridge Park, in order to satisfy his passion for indoor bicycle racing. But after the park’s management (a public-private partnership) accepted the gift, a backlash occurred, and Rechnitz had to withdraw his offer. In our democracy, a donor cannot simply appropriate a public space over the objections of his neighbors.

Callahan’s book is full of other examples that undermine his thesis of affluent elites calling the shots for everyone else. Take the interest of Bill Gates and his foundation in small high schools and the Common Core curriculum, which had significant influence on Michael Bloomberg’s mayoral administration in New York City and ultimately on the federal Department of Education. Foundations rarely invent policy ideas out of whole cloth: the small-schools movement predated Gates’s interest, and E.D. Hirsch’s influential writing about the importance of curriculum dated back to the 1980s. Gates’s aggressive promotion of Common Core did not prevent the concept from becoming controversial or stop many states from rejecting it. Indeed, the Gates endorsement itself became an object of controversy and a talking point for Common Core opponents. Again, democracy had not been repealed and replaced by the whims of a billionaire. There would be no charter schools in Los Angeles—or anywhere else, for that matter—if governors and elected school boards had not given them the green light while installing overseers with the power to shut them down. For that matter, George Soros’s (unfortunate) success in promoting marijuana legalization could not have occurred without ballot approval and grassroots advocacy dating back to the early 1970s.

Callahan promotes the idea of radical transparency for philanthropic donors, such that those who fund public-policy research (presumably such as the Manhattan Institute) and advocacy organizations should no longer receive a tax deduction, which they currently do, in recognition of their educational purpose. Indeed, Callahan objects to the very idea of anonymous giving, whether for political advocacy or other pursuits—“because without (transparency) citizens don’t know who’s shaping decisions that affect them and what their motives might be.” But he’s indifferent to those “worried about serious retaliation, as was the case with donors to the NAACP in the Deep South during the 1950s.” He airily dismisses “such privacy concerns.” They are “understandable, but ultimately should not trump the public’s interest in greater transparency at a time when a wealthy minority exerts growing influence over public policy—and people’s lives.” He exaggerates the degree of anonymous giving—assuming, for instance, that those with their own, personal donor-advised funds always give without attribution. In fact, anonymity is an option for such funds, not a requirement.

Yet, perhaps unwittingly, Callahan’s extensive examples make clear that these wealthy are hardly a united front, pursuing a common agenda. No single voice dominates public debate through philanthropic giving. Charles Koch supports right-leaning groups—but George Soros supports the left-leaning. Indeed, the charitable tax deduction even helps support groups such as the Center for Responsive Philanthropy, which largely shares Callahan’s values. As Eli Broad tells Callahan, “I think everyone is getting heard. We’re getting heard, the philanthropists. The unions and administrators are getting heard. Overall, we’re creating debate.”

Callahan may view philanthropy as veiled rule by elites—but one might more accurately call it a marketplace of ideas that enriches democracy. There are no independent think tanks, after all, in China. Perhaps Callahan would prefer wealthy elites with no concern for the public interest. That American elites, their limitations notwithstanding, act otherwise is a civic strength that deserves praise—and protection.

Photo by Spencer Platt/Getty Images

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