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We are the 99 percent

Democracy and the Donor Class by Gara LaMarche

Posted 1 year ago on Sept. 22, 2014, 10:38 a.m. EST by OccupyWallSt
Tags: Philanthropy

This article was originally published at The Democracy Journal

Foundations and philanthropists do much good, but these unelected actors have acquired enormous power to shape policy. Should they be reined in?

Though this is not the way I would usually describe my career, one way of looking at it is that I spent my first 20 working years trying to raise money, and the next 15 trying to give it away. The transition, which took place when I left Human Rights Watch in 1996 to found the United States Programs of George Soros’s Open Society Institute, was a challenging one.

On the one hand, having dealt with foundations over the years as a supplicant, I felt I knew their ways—and in particular, ways of behaving that I was eager to avoid. On the other hand, suddenly becoming the gatekeeper to many millions of philanthropic dollars altered most of my collegial relationships, and many of my personal ones, infecting all but a few of them with a new power dynamic. I found myself—as various wags have observed about philanthropy staff over the years—a great deal smarter, wiser, funnier, and probably handsomer than I had been only months before.

I managed that personal transition as well as I could. I vowed not to internalize the importance others now ascribed to me. What power I held was derivative and temporary, and I tried not to forget that. I think I was mostly successful in remembering, so my recent transition out of philanthropy, with the accompanying loss of certain kinds of power and capital, has been that much easier as a result. For the better part of those 15 years, I oversaw grants made by two of the world’s largest foundations, both with engaged and active donors, probably to the tune of about $3 billion in all. So I’ve had more experience helping to direct the largesse of the living rich than almost anyone, aside from Patty Stonesifer, Jeff Raikes, and Sue Desmond-Hellmann, the former and current CEOs of the Bill and Melinda Gates Foundation. Through that experience, I’ve been a vocal and persistent advocate for a certain kind of philanthropy, one that eschews simple charity—worthy but palliative measures like supporting a soup kitchen or personal gestures like providing a scholarship—for attention to policy, to the root causes and structural conditions that result in hunger or lack of access to education in the first place. I’ve preached to my philanthropic brethren the virtues of support for advocacy on the leading social-justice issues of the day, and tried in the positions I’ve held to model that in the hopes that others would follow, or in any case find it safer territory to explore. The grant made by Atlantic Philanthropies during my tenure to Health Care for America Now, the grassroots organizing campaign for universal health coverage—at $27 million, the largest advocacy grant ever made by a foundation—was perhaps the most prominent of many such examples.

And yet it was during that campaign, ironically, that I began to have my first real doubts about the legitimacy of philanthropy in its engagement with the democratic process. You’ll recall that one of the many attacks on President Obama’s health-care bill was that it would bust the budget, and the President was careful to state from the outset that this major social-welfare advance would be revenue-neutral, not adding to the deficit, and indeed saving money over time.

That meant finding a combination of savings and new revenue to finance the bill. One proposal from the Administration would have capped the income tax deduction for charitable contributions at the level it was during the Reagan Administration, 28 percent. Almost without exception, the organizations that purport to speak for foundations and the nonprofits they fund rose up in opposition to the proposal.

There are credible arguments on both sides about how much effect a change in the deduction would have on charitable giving in the United States. I tend to believe the studies—such as those by the Center on Philanthropy at Indiana University—that assert that there would be a modest effect, if any. But let’s assume for the sake of discussion that the effect would be more than modest—that wealthy Americans in particular would open their checkbooks for causes dear to them a bit less often without the incentive of a tax break. Is that a price worth paying?

I think so. We had a once-in-a-generation opportunity to advance universal health care, benefitting many millions of uninsured Americans, saving lives, staving off bankruptcies, and indeed saving public dollars that would otherwise be devoted to emergency-room care. We had a means of helping to pay for it by a slight alteration in a tax break used by the most well-off—and, undoubtedly, the most generously insured—members of society. Yet 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.

As you can tell, this steamed me up a lot, and it did again later when the same script played out during the fiscal cliff crisis. What that situation made plain to me was not just that philanthropy is quite capable of acting like agribusiness, oil, banks, or any other special-interest pleader when it thinks its interests are jeopardized. It helped me to see that however many well-intentioned and high-minded impulses animate philanthropy, the favorable tax treatment that supports it is a form of privatization. Money that would otherwise be available for tax revenue that could be democratically directed is shielded from public control for private use.

As Rob Reich, co-director of the Stanford University Center on Philanthropy and Civil Society, wrote in a 2013 cover article in Boston Review, “What Are Foundations For?”:

Philanthropy in the United States is not just the voluntary activity of a donor. Philanthropy in general, including the work of foundations, is generously tax-subsidized. The assets transferred to a foundation by a donor are left untaxed in two respects: the donor makes the donation more or less tax-free, diminishing the tax burden she would face in the absence of the donation; and the assets that constitute a foundation’s endowment, invested in the marketplace, are also mostly tax-free. …[F]oundations are partly the product of public subsidies. They are created voluntarily, but they result in a loss of funds that would otherwise be tax revenue. In 2011 tax subsidies for charitable giving cost the U.S. Treasury an estimated $53.7 billion. So foundations do not simply express the individual liberty of wealthy people. We all pay, in lost tax revenue, for foundations, and, by extension, for giving public expression to the preferences of rich people.

I can already hear the arguments that will be made against this view on the political right. They don’t believe in a strong government role in the economy and social welfare, and certainly not the taxes that support it. They prefer to let the private market deal with health and income security. They don’t view wealth as presumptively subject to taxation, and they think the idea that favorable tax treatment constitutes a subsidy turns the world on its head. I don’t agree with them, but I understand their worldview, and they have credible arguments that flow from it.

I do wonder, though, about my progressive friends. They believe in a strong government, in a fair tax system, in a robust social-welfare system, and in a vibrant democracy where all voices count equally. Why are they are not more concerned about the undemocratic and largely unaccountable nature of philanthropy? Why are we—since I too have failed, for years, to ask these big questions—hypersensitive to the dangers of big money in politics, and the way it perpetuates advantage and inequality, but blind, it seems, to the dangers of big philanthropy in the public sphere?

It wasn’t always so in our history. When the titans of their day, Andrew Carnegie and John D. Rockefeller, sought to set up trusts to spend some of their vast wealth for charitable purposes, Frank P. Walsh, a progressive lawyer who chaired a congressional inquiry into industrial relations, called the new Rockefeller Foundation and Carnegie Corporation “a menace to the future political and economic welfare of the nation.” In that period, 100 years ago, the foundations’ endowments surpassed what the federal government, in the pre-New Deal era, spent on education and public health. Walsh called for the “democratization of private benevolence” through more progressive taxation. In testimony before the Walsh Commission, Morris Hillquit, the labor lawyer and Socialist Party leader, said that large foundations like Rockefeller, Carnegie, and Russell Sage “represent in the domain of philanthropy just what trusts represent in the industrial field.” Edward P. Costigan, who would later represent Colorado in the Senate, called the Rockefeller Foundation “a supreme example of the philanthropy which deadens, by its large benefactions, a public criticism which otherwise would be as formidable as inevitable.” Even feudalism and slavery, Costigan went on, “boasted of their occasional generosity.” The Reverend John Haynes Holmes of the New York Church of the Messiah, who would serve for two decades as chair of the board of the American Civil Liberties Union, called foundations “essentially repugnant to the whole idea of a democratic society.”

In 2013 you’d be hard-pressed to find anyone close to the mainstream of American civic life and political thought raising those kinds of fundamental concerns. Is it because 100 years of practice has erased them? Or because philanthropy has deadened criticism, as Costigan warned, with its “large benefactions”?

Read the rest of Gara LaMarche's expose at the Democracy Journal

24 Comments

24 Comments


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[-] 9 points by beautifulworld (22481) 1 year ago

Charity should be unnecessary.

No one should be at the mercy of whether another is "generous" or not.

There is enough global wealth to go around to all people.

[-] 0 points by ShadzSixtySix (1936) 1 year ago

''Machiavelli was right. Many things have changed, but what was true then is still true today. Oligarchic appetites are an enormous threat to liberty and freedom. Machiavelli used his writings to try to convince those in power that oligarchic greed needed to be curbed; his critique of oligarchic domination has often been misunderstood.

''Oligarchic domination is a cancer that is destroying both people's lives and the planet. But who are the oligarchs today in our corporatized and financialized world? They are the super-rich and more generally those who command massive concentrations of wealth, even if they do not own it, or even if they own only a fraction of it, such as the individuals in charge of multinational corporations and financial firms.''

e tenebris, lux ...

[-] 4 points by beautifulworld (22481) 1 year ago

And, I don't know about you, but I am sick and tired of the "rich" convincing themselves of their own "worth" and bestowing "philanthropy" on the "needy" thereby elevating their own estimations of themselves even more.

There's nothing like patting oneself on the back for one's "generosity" while pretending to have ignorance of one's own complicity in ongoing world poverty.

[-] 1 points by ShadzSixtySix (1936) 1 year ago

''Hubris'' could be a word you may also like to use. 'Narcissistic Wankers' could be two other useful words - as could 'nemesis' and 'awaits' !!! Also perhaps consider :

qui tacet consentire ...

[-] 7 points by beautifulworld (22481) 1 year ago

The donor class are the creators of poverty and environmental degradation. That is how they get their money in the first place, by exploiting people and earth.

[-] 5 points by ShadzSixtySix (1936) 1 year ago

The ''donor class'' is all too often 'The Parasite Class' & thus in compliment and solidarity, I append fyi :

ad iudicium..

[-] 6 points by beautifulworld (22481) 1 year ago

The "donor class" only donates to aggrandize their own reputations. Their investments that got them rich in the first place are the very reason for the poverty and inequality that exists around the world. They have no excuse for their bad behavior.

[-] 6 points by ShadzSixtySix (1936) 1 year ago

The ''donor class'' do not so much 'donate', as receive tax write-off opportunities and obtain some PR for their grandiose 'largesse' but the absolute bottom line is that in the main ... their 'donations' are actually 'investments' !!! They look at The 99% like hyenas look at gazelles !! Scum ! Also fyi, perhaps consider :

multum in parvo ...

[-] 4 points by beautifulworld (22481) 1 year ago

Hence stocks are up how much? At an all time high, I think today, the Dow at nearly 18,000. All that, while wages continue to decline in real numbers. Inequality gets wider.

Here's Richard Wolf on the costs of global capitalism to real wages:

http://rdwolff.com/content/costs-global-capitalism

[-] 6 points by ShadzSixtySix (1936) 1 year ago

Stocks and shares are at record highs because all the Quantitative Easing (Queasing?!) has fuelled an asset price bubble for The 1%, as they given low interest access to that money by The 0.01% Parasite Class !!! This is happening despite the penury and pauperisation of The 99% with Austerity, Economic Suppression and Extreme Crapitalism !! This Oppression Can Not Abide but D&R have fk-all to say !

From your excellent link : "Capitalist enterprises keep moving their operations (manufacturing but also now service sector jobs) from high wage to low wage regions of the world to raise their profits. The resulting unemployment forces the jobless to compete for jobs and accept lower paid work. So real wages stagnate in the areas capitalists leave and rise in the areas to which they move. Capitalism no longer brings a rising standard of living to the regions where it was born and developed first: western Europe, north America and Japan.

''The great political question of the day is this: will the working classes of western Europe, north America and Japan consent to the long-term decline in their economic well-being that now serves capitalists’ thirst for higher profits? It is the question even though mainstream politicians, media and academics cannot see it or refuse to discuss it.

''The answer to that questions can still be no. The labor, anti-capitalist, and social movements can understand this situation and could ally to stop paying these horrendous costs of global capitalism.'' To that I'd add The Anti-Racist Movements too & meanwhile ...

fiat justitia ruat caelum ...

[-] 3 points by beautifulworld (22481) 1 year ago

"When the Well Educated Middle Class Joins the Working Poor"

http://billmoyers.com/2014/12/19/well-educated-middle-class-joins-working-poor/

It's just sickening what has gone on in this country and the global economy as well. Bankers walk free, while real suffering extends to the 99%.

"We may consider airline pilots to be esteemed, highly skilled professionals, but in the fastest growing sector of the industry — regional airlines — starting pay is as low as $22,400 per year, or $10.75 per hour, according to the Airlines Pilots Association."

"Today, around three-quarters of all US college professors are classified as “contingent faculty” — those who aren’t on a tenure track — and about half are technically “part-time,” even though many of them teach a full-time load of classes."

Are we waiting for our civilization to decline into the depths of the widest chasm? Or, are we going to wake up and demand that the basic structure of our economy be made to work for ALL people? This is the question of our times.

[-] 5 points by ShadzSixtySix (1936) 1 year ago

"What The 1% Don't Want You to Know" (Bill Moyers & Paul Krugman re. Thomas Piketty) :

"Are we waiting for our civilization to decline into the depths of the widest chasm? Or, are we going to wake up and demand that the basic structure of our economy be made to work for ALL people? This is the question of our times." Indeed ! & fyi :

Solidarity In Struggle @ you, yours and all who read here y Viva Los Indignados !!

respice, adspice, prospice ...

[-] 2 points by beautifulworld (22481) 1 year ago

"While conservatives will never admit it, welfare is a mind-bogglingly small expense and a very small piece of the pie.

On the other hand, the nation's biggest welfare recipients - rich people and big corporations - are making out like bandits, because the welfare they take isn't for food or housing - it's to increase their profits and wealth."

"If we're serious about going after "welfare queens" in the US, to use Ronald Reagan's phrase, then let's start by going after the corporations and industries that use the Walmart business model of paying such low wages that their employees qualify for welfare benefits."

From Truth Out, "The True Costs of Corporate Welfare"

http://truth-out.org/opinion/item/28293-the-true-costs-of-corporate-welfare

[-] 4 points by ShadzSixtySix (1936) 1 year ago

''Ellen Brown, who writes at 'The Web of Debt', is the only blogger that I am aware of who writes about The Neoliberal Machinations related to preparing for the next giant bank crashes. In a recent post she describes the latest plan adopted by the G20 nations. I believe this is crucial information for many and so wish to broadcast it further, including some background not covered in her post.

''It is no secret that the financial contingent of the Economic Royalists are in the driver's seat worldwide. We need no more explanation than that to understand why the big banks, like Bank of America, Wells Fargo, JP Morgan Chase, were not broken up, contrary to the public interest. In fact, they are far larger today than they were in 2008, making the TBTF threat worse than ever.

''The bottom line is, the government is preparing to legitimize the theft of our savings in order to prop up irresponsible and unscrupulous bankers. A far better solution, still, is to break up the TBTF banks proactively, thus avoiding the bankruptcies and the need to save the banks on the backs of the people.''

~~~~~~~~~~~~~~~~~~~~~~~~~~~

The above is excerpted from your very good link & in compliment, please see the item referenced there :

All the best for Xmas, Yule, Solstice & The New Year to you and yours Nev1. Solidarity. Viva The 99%.

fiat lux ; fiat justitia ; fiat pax ...

[-] 2 points by Nevada1 (5776) 1 year ago

Thank you Shadz, for the kind words and your valuable contribution here. Happy Holiday Season to you and yours.

[-] 1 points by ShadzSixtySix (1936) 1 year ago

''Wall Street to Workers: Give Us Your Retirement Savings and Stop Asking Questions'' ...

Thanx for your kindness 'Nev1'. Sorry I couldn't reply with a nicer item but it is 'on topic'. Solidarity.

pax ...

[-] 5 points by ShadzSixtySix (1936) 1 year ago

''The top-ranking officer in the American military said yesterday the United States is actively considering the direct use of troops in the toughest forthcoming fights against the Islamic State (IS) in Iraq, less than a week after President Barack Obama doubled troop levels there .

''Gen Martin Dempsey, chairman of the joint chiefs of staff, indicated to the House of Representatives armed services committee that the strength of IS relative to the Iraqi army may be such that he would recommend abandoning Mr Obama’s oft-repeated pledge against returning US ground troops to combat in Iraq.

''Representative Buck McKeon, the retiring California Republican who chairs the panel, said he would not support a congressional authorisation for the war against IS that ruled out direct US ground combat.

“I will not support sending our military into harm’s way with their arms tied behind their backs,” he said, predicting an authorisation explicitly preventing ground combat would be “DOA in Congress”.

''Mr Hagel said he did not “know specifically what they will propose” in terms of language for the authorisation, which Mr Obama said he would seek after last week’s midterm elections drubbing which has handed Republicans control of Congress.''

~~~~~~~~~~~~~~~~~~~~~~~~~~~

The above is excerpted and heavily abridged from your link abv. & thanx Nev1. So, wtf is there even left to say about Obomber and The US-MIC - other than to again remind ourselves that none of this is now happening by 'accident' or 'mistake' and that ''IS / ISIS / ISIL'' .. are the total creation of and massively enabled by .. both the US & ALL its allies in the region !!! This we know to be true !! Sheeesh ! + fyi :

fiat lux ; fiat justitia ; fiat pax et cave - bellum se ipsum alet ...

[+] -5 points by timeforabigchange (-43) from Winnipeg, MB 1 year ago

These are the kinds of generalized forms of thoughts that greatly deserve to be nuanced.

Most entrepreneurs aren't out to destroy the planet or make others poor. They really aren't. The problem is much more about the system than about the actors. And, we can't always blame others. How many would change their lifestyle so they could have less impact on the environment? Not that many. I never owned a car or want to, but I'm in the minority with that. Not everyone is enthralled with pedal bikes as I am.

[-] 4 points by Renneye (3874) 1 year ago

"One rich, arrogant plonker robbing the poor to give to some other rich plonker."

From ~ Banksy robbers - http://www.thefreelibrary.com/Banksy+robbers-a0320022134

[-] 3 points by ShadzSixtySix (1936) 1 year ago

The thing about ''rich plonkers'' is that they are all to often self-righteous right-wing, conservative loons :

fiat justitia ...

[+] -4 points by ShadzSixtySix (1936) 1 year ago

''Philanthropy in the United States is not just the voluntary activity of a donor. Philanthropy in general, including the work of foundations, is generously tax-subsidized. The assets transferred to a foundation by a donor are left untaxed in two respects: the donor makes the donation more or less tax-free, diminishing the tax burden she would face in the absence of the donation; and the assets that constitute a foundation’s endowment, invested in the marketplace, are also mostly tax-free. …[F]oundations are partly the product of public subsidies. They are created voluntarily, but they result in a loss of funds that would otherwise be tax revenue. In 2011 tax subsidies for charitable giving cost the U.S. Treasury an estimated $53.7 billion. So foundations do not simply express the individual liberty of wealthy people. We all pay, in lost tax revenue, for foundations, and, by extension, for giving public expression to the preferences of rich people.'' ~

''As Rob Reich, co-director of the Stanford University Center on Philanthropy and Civil Society, wrote in a 2013 cover article in Boston Review, “What Are Foundations For?” - and because it thoroughly deserves repeating. Also fyi, consider :

From which : ''Judge Richard Posner, one of the foremost American jurists outside the Supreme Court, once observed, “A perpetual charitable foundation . . . is a completely irresponsible institution, answerable to nobody. It competes neither in capital markets nor in product markets . . . and, unlike a hereditary monarch whom such a foundation otherwise resembles, it is subject to no political controls either.” Why, he wondered, don’t we think of these foundations as “total scandals”?

''If foundations are total scandals, then we have a massive problem on our hands. We are now living through the second golden age of American philanthropy. What Andrew Carnegie and John D. Rockefeller were to the early twentieth century, Bill Gates and Warren Buffett are to the early twenty-first century.

''The last decade of the twentieth century witnessed the creation of unprecedentedly large foundations, such as Gates’s. The assets of the Gates Foundation and a separate Gates Trust, which holds wealth donated by the Gates family and Buffett, together total more than $65 Billion. If the combined entities were a nation, it would be 65th on the world GDP list. And it’s not just billionaires and their mega-foundations that command attention. Record wealth inequalities might be a foe to civic comity, but they are good for philanthropy. The boom in millionaires has fueled unprecedented growth in the number and assets of small foundations as well.''

~~~~~~~~~~~~~~~~~~~~~~~~~~~

As bw says above : ''Charity should be unnecessary. No one should be at the mercy of whether another is "generous" or not. There is enough global wealth to go around to all people.'' - and the problem is that modern Extractive Economic Exercises now clearly show that Western Societies trend towards 'Hoover Up Economics' as the self-serving delusions of 'Trickle Down Economics' are being ever further exposed.

e tenebris, lux ...