Reality and Its Alternatives   /   Summer 2019   /    Book Reviews

Does Philanthropy Subvert Democracy?

There is room for reform in American philanthropy, but circumspection is in order.

Nick Burns

Bill and Melinda Gates (detail), 2010, by Jon R. Friedman; B.Christopher/Alamy Stock Photo.

Is modern-day philanthropy a disease in the democratic body politic? Rob Reich, a professor of political science at Stanford University (not to be confused with former secretary of labor Robert Reich), believes that it is. And Reich is not alone. Near-universal outrage over the recent college admissions scandal has left two black eyes on American philanthropy: one for the role of Rick Singer’s fraudulent 501(c)(3) organization, Key Worldwide Foundation, in bribing several elite universities to accept children of privilege; the other for the universities’ susceptibility to such schemes. Reich’s book went to press well before the scandal broke, but it is hard to imagine a better indication of his central claim: that philanthropy amplifies the power of the few at the expense of the many.

Philanthropy, Reich reasons, is necessarily “a form or exercise of power.” Under the current regime, it is an undemocratic sort of power: Bill Gates’s donations to public schools, for example, give him a measure of curricular control that cannot be wrested away at the ballot box. Though Reich favors greater government oversight and a freer hand for representative bodies to regulate charities’ operations, he goes a step further by arguing for the abolition of American philanthropy’s legal mainstay: the tax deduction.

The income tax deduction for charitable donations, Reich argues, is effectively a state subsidy for philanthropy. And since tax rates increase progressively on the basis of income, the rich are, in effect, being paid by the government to exert power by giving their money away.

Reich’s case against modern philanthropy has two different strands—one democratic, the other utilitarian. When the epithet “plutocratic” appears, as it does with great frequency in Just Giving, Reich is in democratic mode. When the text is dense with numbers and charts, he is in utilitarian mode.

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