October 21, 1999 | Read Time: 5 minutes
Although the stated purpose of this week’s White House conference on philanthropy is to explore ways to “sustain and expand” the American tradition of giving, the event’s organizers would be well served to also explore how the growth of philanthropy is contributing to the demise of democracy. The President and Mrs. Clinton would do well to use the meeting to highlight the tradeoffs that come when decision making about the public welfare is removed from the public arena and put into the hands of private philanthropists.
Since the early days of our republic, charitable giving has fortified and supplemented the role of government and churches in higher education, medicine, care for the needy, and support for the arts. But at various times, when the large and concentrated gifts of the extremely wealthy have had a disproportionate impact on the egalitarian principles of our democratic system of government, Congress and the public have sought to rein in that influence. With an unprecedented gap in income between rich and poor Americans as well as between rich and poor nations — the United Nations Development Program reports that the world’s three richest people have more wealth than the combined gross domestic products of the 43 poorest countries — now might be another good time to consider whether the pendulum of private philanthropic influence has swung too far.
Two trends in recent decades — tax cuts for the wealthy and the privatization of government services — have contributed to the current situation.
In the political debates of today, it is no longer assumed that government has an obligation to provide a public education for all of America’s children, much less health care, decent housing, enough to eat, safe places to play, public libraries. Privatization is the watchword: private schools, private health care, private retirement plans, private roads. While everyone is scrambling to get rich enough to pay for their own family’s private welfare, the “general welfare” that our Constitution promised to promote has increasingly been relegated to private philanthropy.
Some donors have risen to the challenge. With the United Nations reduced to seeking funds from wealthy individuals to make up for the shortfall caused by the shameful default on its dues by the United States, Ted Turner pledged $1-billion to support vital humanitarian programs. Though admirably generous, the gift, at least in part, can be viewed as a substitute for democratic decision making — the stuff that ought to be the function of elected representatives.
Or take the case of Bill Gates. Mr. Gates, one of the chief beneficiaries of today’s global economic free-for-all, is worth nearly $100-billion — more than many of the world’s nations. He has recently endowed his family foundation with 17 of those billions, making it the largest private foundation in America. Through his foundation, Mr. Gates will distribute enormous sums of money to computerize schools and libraries, to immunize children and fight specific diseases, to provide scholarships to minority students, and to support other worthy projects of his choosing in his hometown, Seattle, and throughout the world.
But what does it mean when someone like Mr. Gates can make a multimillion-dollar gift to the public schools earmarked for the computerization of education? It’s not the self-interested aspect of the grant that offends. Mr. Gates believes strongly in the importance of computers in schools, and he may be right. What offends is the fact that he gets to decide what the schools’ priorities should be without having to churn his billions through a democratic process the way the rest of us churn our thousands.
In the continuing debate over federal and state financing of education, one frequently hears the argument from the right, left, and center that it is not appropriate to dictate to a school district the purposes for which it can or must use funds. Local school boards, parents, teachers, and administrators know best what is needed to improve the quality of education in their communities, be it more textbooks; restoration of music, art, or sports programs; smaller class sizes; higher teacher salaries; or new school buildings.
But the concept of “local control” is never publicly raised when Bill Gates’s foundation makes a multimillion-dollar gift to the public schools earmarked for computerization of education. Apparently if you create a foundation with your wealth, not only can you escape paying taxes on that wealth — you also get to define the “general welfare.”
Given the current atmosphere of disgust with government and distrust of all public officials, many would probably say they trust Bill Gates to make better decisions than the President, governor, or even the school board. The flaw, however, is that Bill Gates isn’t accountable to anyone — and when important decisions about public policy are made by wealthy individuals rather than by local citizens or elected officials, people lose faith in our system of democracy. They no longer believe that their opinion, or their vote, or their participation in civic life matters.
Indeed, that lack of civic involvement is already at a critical state. Many factors are enumerated and blamed, from television, to money in politics, to corruption of the political process, to globalization. But in their own way, philanthropists with the power to make profound change on their own, without any political accountability, contribute to the sense of powerlessness.
Traditionally, America has tried to check the power of the wealthy — and provide for the welfare of all — through the income-tax system. Through taxes we were to have the means to provide for public schools, parks, roads, and sewers, as well as national defense. In the current political climate, it is difficult to imagine a serious discussion of tax overhaul that would increase taxes on the super-wealthy. But that is precisely what is needed to put decision making on matters of public policy back where it belongs.
To be sure, at any given moment, a significant minority of us probably disagrees with the specific expenditures our government officials make with our tax money. Flawed and frustrating as that may be, it’s the essence of democracy. If the White House conference focuses on increasing philanthropy without dealing with the fact that our democratic system suffers when important decisions about public policy can be made by wealthy individuals outside the political process, then a great opportunity will be lost.
Barbara Dudley was a program officer and executive director of the Veatch Program, a grant-making program of the North Shore Unitarian Universalist Society, from 1987 to 1992. She also served as executive director of Greenpeace USA from 1993 to 1997.
