Is Big Philanthropy Compatible With Democracy? - The Atlantic

Is Big Philanthropy Compatible With Democracy? - The Atlantic:

Is Big Philanthropy Compatible With Democracy?
A Stanford professor argues that it’s largely not—but that it could be reformed to promote equality, rather than undermine it.

In 1912, John D. Rockefeller went to Congress with a simple request. He wanted permission to take the vast wealth he’d accumulated, and pour it into a charitable foundation.

Many were outraged.

John Haynes Holmes, a Unitarian minister and a cofounder of the NAACP and ACLU, told the Senate that from the standpoint of the leaders of democracy, “this foundation, the very character, must be repugnant to the whole idea of a democratic society.” Rockefeller’s effort failed. He ultimately chartered it in the state of New York instead.

A few years later, Missouri Senator Frank Walsh cited the Rockefeller Foundation as he declared that “huge philanthropic trusts, known as foundations, appear to be a menace to the welfare of society.”

These were hardly isolated concerns. Contemporaries, as the Stanford professor and scholar of philanthropy Rob Reich has written, worried about how private foundations “undermine political equality, affect public policies, could exist in perpetuity, and [be] unaccountable except to a hand-picked assemblage of trustees.”

They are, he argues, extraordinary exercises of power. “Rather than responding to power with gratitude,” Reich said, “we should respond with skepticism and scrutiny.”

It’s an unfamiliar perspective. These days, wealthy philanthropists are more likely to be lauded, their names emblazoned on buildings, their pictures on magazine covers. And Reich delivered it in an unusual setting, speaking Tuesday at the Aspen Ideas Festival, which is co-hosted by the Aspen Institute and The Atlantic, to an audience that included more than a few philanthropists and foundation executives.

But he’s not alone. Judge Richard Posner, the idiosyncratic jurist and leading legal theorist, has complained that “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.”

It’s a genuine dilemma. At its worst, big philanthropy represents less an exercise of individual freedom, Reich said, than a tax-subsidized means of taking private profit and converting it into public power. And he argued that big foundations possess the leverage to bend policy in their favored direction in a coercive manner, pointing to the example of the Gates Foundation’s funding of Is Big Philanthropy Compatible With Democracy? - The Atlantic: