Democracy and the Donor Class by Gara LaMarche
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 Democracy and the Donor Class by Gara LaMarche | OccupyWallSt.org: