Tuesday, November 30, 2021
Steven Dean (Brooklyn) & Dana Brakman Reiser (Brooklyn; Google Scholar) present For-Profit Philanthropy: Constraining Elite Power in Limited Liability Companies, Donor-Advised Funds and Strategic Corporate Giving (Oxford University Press 2022) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Brian Galle:
In response to revelations that more than 100 extremely wealthy taxpayers paid no income tax at all (without breaking a single rule) the Tax Reform Act of 1969 created the alternative minimum tax. More than half a century later, the country seems genuinely surprised to find that while they may have traded yachts for spacecraft, the wealthiest Americans still often pay not even one dollar of tax. As was true decades ago, they need not break—or even bend—any laws to do so.
Perhaps doubting its wherewithal to directly turn private wealth into public resources through taxation, the 1969 tax reform also attempted to tame elite power with a strategic Grand Bargain. And for a time, it seemed to have succeeded. Its private foundation regime demanded accountability and a golden age of philanthropy unfolded. Extraordinary public benefits flowed from a partnership between the wealthiest Americans and the most vulnerable.
While other legislative bulwarks of the 1960s have been sunk by devastating broadsides, the Grand Bargain’s slow death has been one of a thousand small cuts. The Supreme Court eviscerated the 1965 Voting Rights Act’s protections against discrimination, dismissing its worries about the disenfranchisement of voters as “based on 40-year-old facts having no logical relationship to the present day.” The unsettling consequences of the Supreme Court’s failure to anticipate a new wave of voting limits have come to dominate our nation’s political discourse.
The rise of the philanthropy LLC, commercially affiliated donor-advised funds, and strategic corporate philanthropy has hardly gone unnoticed. But because they have been viewed as distinct phenomena affecting—respectively—the transparency, timing, and targeting of philanthropy, their devastating collective impact on the Grand Bargain has remained obscured. As a result, the urgent efforts to ensure that the public’s voice not be silenced through modern-day poll taxes have not been matched by a comprehensive push to contain the unbridled power of elites on display in the emergence of for-profit philanthropy.