Philanthropy’s Role In a Democracy

T’is the season to give but can there be adverse effects from some forms of giving?


Since this is the season that is supposed to highlight the human evolved trait of giving, I thought perhaps we should look at this phenomena beyond the intimacy of swapping gift’s on Christmas morning with close family members.  One that’s on a level that few of us will ever attain but that many often fantasize about.  What sparked this idea was an interview with and a NY Times Op-ed piece by Peter Buffet, son of the world’s 4th wealthiest man, Warren Buffet.

It appears that though Peter had privileges that many kids didn’t and still don’t, he was none-the-less raised without all of the trappings of a billionaire’s son.  He attended public schools all of his pre-college years and at 19 was given a meager sum (by comparison to his father’s wealth) of $90,000 as his share of the sale of property left to the family by his grandfather.   The rest he earned himself as a skilled musician.

It wasn’t until 1999 when his father established a trust fund for Peter and the other two Buffet siblings, investing $10 million in each trust, that Peter found himself with more wealth than he needed.  Then in 2006 the elder Buffet began to fulfill a promise to give back the vast amount of his wealth for purposes to improve the social well-being of people in general.  Part of this entailed a $1 billion deposit into each of the Buffet children’s trust funds.

Peter has taken this money and developed the NoVo Foundation that focuses a lot on empowering adolescent girls and promoting local and living economies.  The object lesson that Peter and his wife Jennifer work from is to listen to those in need and distribute the money where it will have the greatest and most enduring effect.

As he tells his story however we see that many of the non-profit charities he is but a part of have become an entity unto themselves and essentially improving nothing of the systemic issues that create a need for the charities in the first place.  He calls this fiasco the Charitable-Industrial Complex and describes how powerful people who in effect wound up using this system to enhance their own personal and financial status while achieving what Buffet calls “conscience laundering”.  This concept is in conflict with the true meaning of philanthropy which is defined as “love of humanity”.

Size matters in distributing resources for the unfortunate but sometimes bigger does not always equate into being better.  This leviathan of non-profit charitable giving distributed over $316 billion in 2012.  In his Op-ed piece Buffet reveals that “according to the Urban Institute, the nonprofit sector has been steadily growing. Between 2001 and 2011, the number of nonprofits increased 25 percent. Their growth rate now exceeds that of both the business and government sectors.”  Along with this is the 9. 4 million jobs this industry has created.  This would all be so impressive if only it actually served the purpose of putting such charitable contributions out of business by making real changes that allowed people to improve their quality of life without relying on the giving of people who often do so with some strings attached.

In his interview with Laura Flanders it’s pointed out that all this giving still pales in comparison to what taxpayers layout to improve the general welfare of society.   Take education for example.  Flanders notes that “the biggest amount of money going into education is coming from us.  $526 billion every year from taxpayers just for pre-K”.  Yet what is in danger of happening as this Charitable-Industrial Complex grows is that taxpayer contributions to their general welfare diminishes as government allows the private non-profits to contribute.  It goes without saying that inevitably there will be some quid pro quo that can occur under such a transformation.

“As philanthropic dollars come in then government says “Oh, maybe we don’t have to worry about this so much.  Then they’re not doing their job because as you say then [the government should be the engine that drives such things].  And at the same time you have people with vast amounts of money controlling government ultimately too.  So you’ve got this thing that circles around where you’ve got all sorts of money in government, you’ve got all sorts of money doing what government should be doing and  [wealthy] people saying to government “pay attention to this as opposed to that”.   Peter Buffet in  the Laura Flanders interview

What we potentially find ourselves left with then is a government that relies too much on private wealth rather than the general public revenue from taxes we all contribute to and thus gives us a voice in how things should operate in a democracy.  Our tax revenues ensures a consistency in meeting the social needs of its citizens.  Whereas if there is a partial reliance on wealthy private giving that decides to pull out for one reason or another then a void is created.  A vacuum that the government will likely not jump back into to fill the need for.  Unless of course it was coerced to do so by involved citizens.  Sadly however involved citizens are becoming mere consumers and are less involved in the process as they become convinced by the ideological notion that the private sector works better and more efficiently than government.

This all so conveniently fits into Grover Norquist’s scheme to shrink the government small enough to be drowned in a bath tub and leaving us all to rely more and more on the private sector.  That part of our economy that is becoming controlled by a handful of very wealthy people who put profits before the needs of society.

Upon reflection then I have to ask myself when I give to the charities I do, is my giving really accomplishing a goal that ultimately elevates people and nations above the systemic problems that created their impoverishment.  Not that my small contributions  measure up to the philanthropy of billionaires.  To some degree however we all experience a degree of conscious-laundering when we give.

I don’t want people who read this to use it as a reason to not give to worthy charities because as Buffet himself points out there is a lot of good that is accomplished in philanthropic efforts.  But it behooves us all to consider how philanthropy by the very wealthy may rob us of our ability to control our own destiny.  For those who unwittingly allow it to diminish government’s role in the public sector to those on the receiving end who are never truly allowed to grow in ways that breaks the cycle of dependency and poverty, it is important that we the people have the power to guide the outcomes of civil society and all that that entails.



Decreasing the Surplus Population


19 responses to “Philanthropy’s Role In a Democracy

  1. Excellent piece, Larry. I saw the Buffet lads on Piers Morgan and was impressed with their character.

    As for us, we give to local animal shelters. These people are true heroes.

    • “As for us, we give to local animal shelters. These people are true heroes”

      I think small donors like us John are safer giving to the local charities than the national and international models. The local food bank is a regular of mine though I do give to the ASPCA regularly too.

      • Agreed. I wish we had an ASPCA here. Sadly, there is no national body, just these tiny operations that need all the help they can. Just wish i could add a few 0’s to what we give every month 😉

  2. It’s not easy to decide where to put your charitable giving – whether it’s small or large. I avoid the nonprofits that use huge chunks of the donation for administrative purposes. The local humane society and pet rescue foundations are near and dear to my heart. I do see your point about giving money to causes that help change systems and infrastructure, but sometimes the first thing that needs to be done is to provide shelter and food. I’d be curious to know where Idaho falls on the non profit vs. private industry spectrum as well as the amount of charitable giving we do in this state. I wonder if it’s far less than states with fewer libertarians. Definitely this is a “smaller” government state and we’ve seen some big hits to a lot of non profits as well as government agencies that help the underserved and needy.

    • “I’d be curious to know where Idaho falls on the non profit vs. private industry spectrum as well as the amount of charitable giving we do in this state.”

      I would suspect that their charitable nature is comparable to more large population states Jean. The local needs will vary but most people give what they can when they can and that’s all anyone should expect. The tight-asses who are always reluctant to give for self-serving reasons will no doubt be about the same percentage in Idaho as they are elsewhere.

  3. Great post Larry…….I have so many opinions on the charity thing that it would take us from now until next Christmas for me to get it all off my chest…..

      • Larry, sorry to say I hate the holiday season….1968 captured by NVA for 10 days….1970,fav grandmother died, 1979 mother died and 2005 crushed leg because of Katrina and now my father is not going to make it….so the ‘happy’ part eludes me…..

      • Sheesh. I don’t blame you Professor. Such events would not make it a happy time for me either. Ugly events always seem to be that much worse when they happen at times when everyone else is usually celebrating.

      • I only celebrated when my daughter was younger…no sense her having a crappy holiday….but now she knows why I do not like or try not to participate in the festivities…

  4. we are sending “gifts” via Heifer International a Non-profit that sends animals to poor families to help them get started in a business. We’re sending rabbits and chicks on behalf of bro/sis inlaw this year. Audubon also has donation to help specific birds at their site. I love giving this way at christmas. We also are giving a lap top to our housekeeper and her family since presently she has to download the kids (6 of em) homework on her phone and then get printed. We have an old printer that works, so that is our basic charity this year. Makes a person feel great I tell ya…more should do it.

    • “we are sending “gifts” via Heifer International a Non-profit that sends animals to poor families to help them get started in a business”

      I think such charities in most circumstances do the most to empower individuals to rise above poverty conditions that force them to rely on others too often. Good for you Sherry.

  5. I like Sherry’s approach. I don’t pretend to have the answers for government spending and private big-dollar philanthropy, so I’ll continue to act as locally as possible – with my resources, monetary and time – and hope everyone else does so with the same spirit.

    • Yes, giving is but one part of what makes us a human. But even animals share with each other, at least in clans. What separates us from other species on the one hand is that we can go outside our own close clan and help others in need, and do it without looking for an ROI (return on investment). On the other hand we fall below the other species when we assert the self-interest ideology that fends for itself and expects everyone else to do the same.

      Welcome to my blog Eli. I look forward to your comments and hope to drop in on your site occasionally too. Though I am an empty-nester now along with my wife, fatherhood still continues when your chidren become adults too. Just lest stressfully.

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