American philanthropy has faced criticism basically since its inception.
The founding of the Rockefeller Foundation, the first institution of its kind in the US (and the benefactor of this section of Vox), was met with controversy and calls for Congress to disallow the group’s creation.
But the past couple years have featured the biggest backlash against elite philanthropy in decades. Three books — Anand Giridharadas’s Winners Take All, Rob Reich’s Just Giving, and Edgar Villanueva’s Decolonizing Wealth — made the case that giving by wealthy elites can be undemocratic, a distraction from the unjust ways that wealth is created, and do more good for the givers than the receivers.
Phil Buchanan of the Center for Effective Philanthropy professionally advises large foundations and other philanthropic institutions, and he thinks this backlash has gone too far. In his new book Giving Done Right and in several accompanying op-eds, he’s argued that the critiques, particularly that of Giridharadas, paint with too broad a brush and risk discouraging valuable donations.
“Giving among the biggest donors worldwide may fall as their charitable efforts are increasingly caricatured as self-protective ruses,” Buchanan warned in the Financial Times.
Buchanan and I talked the week of his book’s release about the backlash against elite philanthropy, and whether mega-donors can be defended. Our conversation has been lightly edited for length and clarity.
You wrote that you think philanthropy’s getting a bad rap. Why?
Stepping way back, for the last 18 years in this job I’ve felt like philanthropy and the nonprofit sector it supports often get taken for granted. I think we undervalue the role of this sector, particularly in our country, and I think much of the narrative has been, “Philanthropy and nonprofits are broken and business thinking has the answer.”
And now we have a new critique, which is more from the left politically, from folks like Anand and others, which is, “No, actually, philanthropy is just an anti-democratic force or a ruse to distract from evil-doing. Actually, government has the answer.”
I actually think that nobody’s got all the answers. I think it’s particularly concerning right now because there’s some evidence that giving levels may be plateauing. It’s hard to tell for sure because we’re all waiting on the Giving USA data [the gold standard dataset on charitable giving]. And while I think we should be really critical of stupid or ineffective philanthropy, we should hold up giving as a value and recognize that when done well, it can have tremendous positive impact.
Do you really think that these critiques are deterring donations? That seems to imply that donors are more sensitive to public commentary than I would have expected.
I don’t know for certain. I want to be clear that by all means we should critique, you know, Mark Zuckerberg for getting it wrong in Newark or the Gates Foundation for getting it wrong in their early efforts — well, really, for most of their efforts — on public education. I’ve got a ton of critical things to say, but I do worry that if philanthropy is portrayed in a consistently negative light, then I believe that that could have a negative effect on giving.
And I think it could also affect the perspective of policymakers. Already we’ve seen policy changes that are not necessarily positive for philanthropy in terms of the tax code and the reduction in the number of itemizers.
To use one of your examples, one of the ideas that this wave of philanthropy skeptics has been raising is that the question to ask about what Zuckerberg did in Newark isn’t, “Did it work?” but “Why was an outside billionaire was able to funnel $100 million to a school district to affect its policies?”
You talk about policy change in your book, and the need to be careful in funding policy change, but I’m curious what you make of that argument, that the problem is the structure that allows this.
I hear that argument. Ultimately in Newark, there were elected public officials who were making decisions about whether and how to relate to philanthropists. I think that there are great examples of partnerships between elected officials and philanthropy that have contributed to really, really positive effects. Part of my challenge with the current critique is I think people are conflating their unhappiness with the decisions of folks who have been elected in our democratic system with critiques of philanthropy. It’s certainly fair to also critique Cory Booker and Chris Christie for their role [in Zuckerberg’s donation].
I think it’s easy to forget that [in] a strong, healthy civil society, institutions that are funded outside government are an important check and counter to the power of both government and business. We can look at other countries — China might be one example — where that doesn’t exist and I’m not sure that that’s what we want.
I want to push you on the idea that this is just pluralism. It’s not a participatory democratic system where everyone’s putting in their share and collectively we’re building the civil society that we all, together, want. It’s a select group of very high net worth individuals making those decisions.
And if you believe people like Benjamin Page, Jason Seawright, and Matthew Lacombe, who just wrote a whole book about this, these donors tend to have political beliefs that are not representative of the public at large. They tend to be more skeptical of taxes, tend to be more skeptical of economic regulation generally — which makes sense.
So I think this is an anti-oligarchy critique: by allowing these kinds of philanthropic donations, are we setting up an oligarchic structure that exists alongside our democratic structures?
I think we run the risk of exaggerating the degree to which philanthropy is focused on, or even big philanthropy is focused on, direct policy advocacy.
Much of what is done is actually through the support of grassroots organizations that are working on particular issues. So, for example, the Public Welfare Foundation has done a lot of work on criminal justice reform. They have supported organizations in many states across the country that have helped to influence policy to reduce by half the number of juveniles who are incarcerated in the past decade and a half or something.
I write in the book about the Wilburforce Foundation, which supports conservation efforts. Most of the folks whom they are supporting are quite small. These are organizations with budgets sometimes under $1 million who are in particular communities and organizing to try to protect habitats. That’s the way that change happens.
Is it perfect? No. Nothing’s perfect. Should taxes on wealthy people be higher? In my view, yes.
The structural critiques are important and they play out in our democratic politics. But in the meantime, here we are. We have significant wealth that’s been accumulated in this country. We have endowed private foundations that don’t even have a connection on the board to the original donor. These are institutions that are focused on a mission. They’re focused on the public good.
I like working in the day to day, in the practical reality, where there are people with decision-making power to allocate these resources. I want to help them to do it effectively. Do I hope that our systems change? Over time, do I hope that we elect different people with different priorities? Yes. And yet every day I go to work and try to help people who are in the here and now. And I think both parts of those conversations are obviously really important.
Your book is about doing philanthropy most effectively, and there’s one version of that idea that is exemplified by a place like GiveWell, that takes that very literally and applies it to cause selection, and tries to find causes that are best promoting living standards and health, as measured in an at least somewhat quantitative way.
The foundations you’re working on do that sort of work but also arts funding and cultural funding. How do you find a standard that can do all of that? How do you know that what you’re doing is effective and not just effective toward a goal that might not be desirable?
There are no easy answers to this. Ultimately, the choice of goals is subjective. Your positive goal could be my negative outcome, right? We could have goals that are in direct opposition if, for example, one of us is seeking greater accessibility to abortion and then the other one of us wants to limit access to abortion. I think this stuff is nuanced and contextual and there isn’t a single right answer.
I do think that the effective altruist types have a sort of relentless rationality — this argument that you should look for where you can have the maximum effect on human lives. I think that’s a helpful challenge. At the same time, I think it’s too absolute. There is a natural human desire to give locally, for example, and to be connected to a community. I don’t think we should necessarily tell all givers that they need to squelch that desire and give internationally because their dollars go further. And I also believe that there is a role for thriving arts and cultural organizations in our societies that it’s harder to make the case for using effective altruists’ methodology.
I think you just have to wrestle with all of these different choices. And in the book, I try to suggest some ways to think about it and some questions to ask yourself. But I am not an absolutist on this stuff. Ultimately it’s about head and heart, and it’s about the context that you’re in and the values that you have.
One big question that comes up a lot is, “Why should taxpayers be subsidizing this?”
In your book you talk about Tim Gill, who I agree is a really, really interesting case. He helped bankroll the gay rights movement, and in particular the marriage equality movement.
I’m all for marriage equality. I think Tim Gill had a net positive impact on the world. But I wonder, “Why is it that we have this subsidy for him and, say, a very wealthy Catholic donor who might’ve have opposed him, to go at each other? Why is that a proper thing for us to be subsidizing?”
That’s a good question. I think public policy encouraging giving makes sense. Our tax policy unfortunately encourages things like purchasing second homes. We tax capital gains at a lower rate than regular income. There are all kinds of issues with the way we tax people in this country. I’m a little puzzled sometimes by some of the folks — particularly some of the folks on the left politically — who I tend to agree with on a variety of things. But then it’s like, wait, why are we talking about charitable deduction, but not some of these other issues?
I’m sure it can be done better. I think one of the big problems right now is some people don’t get any tax benefit from contributing [if they take the standard deduction]. It’s hard to justify the deduction existing just for some.
Basically, my view is we want to create incentives for people to give — all people at every level. What is the right level of that incentive? How should it be provided? I think Rob Reich and his book have some interesting ideas. I’m certainly not a tax policy person and I don’t have the answers, but I do think that the nonprofit sector, with all its flaws and all its weaknesses, is one of the great strengths of the country. And I think we want our policies to be supportive of that sector.
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