Paul L. Caron
Dean



Friday, September 25, 2020

How Philanthropy Benefits The Super-Rich

The Guardian, How Philanthropy Benefits the Super-Rich:

Philanthropy, it is popularly supposed, transfers money from the rich to the poor. This is not the case. In the US, which statistics show to be the most philanthropic of nations, barely a fifth of the money donated by big givers goes to the poor. A lot goes to the arts, sports teams and other cultural pursuits, and half goes to education and healthcare. At first glance that seems to fit the popular profile of “giving to good causes”. But dig down a little. 

The biggest donations in education in 2019 went to the elite universities and schools that the rich themselves had attended. In the UK, in the 10-year period to 2017, more than two-thirds of all millionaire donations — £4.79bn — went to higher education, and half of these went to just two universities: Oxford and Cambridge. When the rich and the middle classes give to schools, they give more to those attended by their own children than to those of the poor. British millionaires in that same decade gave £1.04bn to the arts, and just £222m to alleviating poverty.

The common assumption that philanthropy automatically results in a redistribution of money is wrong. A lot of elite philanthropy is about elite causes. Rather than making the world a better place, it largely reinforces the world as it is. Philanthropy very often favours the rich — and no one holds philanthropists to account for it.

The role of private philanthropy in international life has increased dramatically in the past two decades. Nearly three-quarters of the world’s 260,000 philanthropy foundations have been established in that time, and between them they control more than $1.5tn. The biggest givers are in the US, and the UK comes second. The scale of this giving is enormous. The Gates Foundation alone gave £5bn in 2018 — more than the foreign aid budget of the vast majority of countries.

Philanthropy is always an expression of power. Giving often depends on the personal whims of super-rich individuals. Sometimes these coincide with the priorities of society, but at other times they contradict or undermine them. Increasingly, questions have begun to be raised about the impact these mega-donations are having upon the priorities of society.

There are a number of tensions inherent in the relationship between philanthropy and democracy. For all the huge benefits modern philanthropy can bring, the sheer scale of contemporary giving can skew spending in areas such as education and healthcare, to the extent that it can overwhelm the priorities of democratically elected governments and local authorities. ...

The result has been what the late German billionaire shipping magnate and philanthropist Peter Kramer called “a bad transfer of power”, from democratically elected politicians to billionaires, so that it is no longer “the state that determines what is good for the people, but rather the rich who decide”. The Global Policy Forum, an independent policy watchdog that monitors the work of the United Nations general assembly, has warned governments and international organisations that, before taking money from rich donors, they should “assess the growing influence of major philanthropic foundations, and especially the Bill & Melinda Gates Foundation … and analyse the intended and unintended risks and side-effects of their activities”. Elected politicians, the UN watchdog warned in 2015, should be particularly concerned about “the unpredictable and insufficient financing of public goods, the lack of monitoring and accountability mechanisms, and the prevailing practice of applying business logic to the provision of public goods”.

(Hat Tip: Mike Talbert)

https://taxprof.typepad.com/taxprof_blog/2020/09/how-philanthropy-benefits-the-super-rich.html

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Comments

"Philanthropy, it is popularly supposed, transfers money from the rich to the poor."

I doubt most people, if polled, would define philanthropy in that fashion. They'd define welfare as transfers of money from the rich to the poor.

And the Guardian has no excuse for that failure, being located in England. I'll quote liberally from Merriam Webster's dictionary:

philanthropy: an act or gift done or made for humanitarian purposes

Yet another article in search of relevance. But hey, that's modern yellow journalism...

Posted by: MM Classic | Sep 25, 2020 6:54:57 PM