November 25, 2022
I recently received an invitation to chat with one of my heroes, Chuck Collins, Director of the Program on Inequality and the Common Good at the Institute for Policy Studies. In years I’ve been writing about wealth inequality and the harm that mega-philanthropists are doing to our society he has been a clear voice calling for the systemic changes that I think are so sorely needed. But when I saw this possible quote for me to incorporate in an article about our conversation, I was shocked: “MacKenzie Scott continues to be a philanthropy disrupter by giving big, bold, and directly to nonprofits rather than to her own private legacy foundation and donor-advised funds. And finally, her ex Jeff Bezos is stepping up to join the Giving Pledge, a long overdue move.”
Had the man who had said several years ago, in an interview for Marketplace, “We’re in this period of extraordinary inequality, and I argue that these inequalities are bad for everybody, that they actually undermine the quality of life for everybody…When a billionaire gives a dollar, we chip in 40 to 50 cents in terms of lost tax revenue that could be used, so the underlying point is that charity is not a substitute for an adequately funded public sector — which is what really creates the infrastructure and really addresses the deep inequality problems in our society…” now flipped and given up the battle for fairness and equality? This is a battle that I am still fighting.
Earlier this week, when Chuck Collins and I found a moment to speak, I began our conversation by asking what had prompted his surprising positioning.
In response, Collins felt this to be a moment to be tactical, to seek to make changes that were possible even if it meant deemphasizing some serious problems. As he put it in a follow up email, “I’m praising Scott in the context of $1.4 trillion in warehoused charitable funds. We have an opportunity to change the laws governing the excessive use of intermediaries –private foundations and DAFs. So, I like to contrast her to the others because it’s important to show there is a variety of behaviors.”
We agreed that the growing concentration of wealth is very problematic. Collins has not walked away from that as a real concern. But he is also concerned that our philanthropic laws and regulations are being abused by many wealthy men and women who are keeping control of their fortunes by using the structures of philanthropy, charitable foundations, and Donor Advised Funds, without actually giving their money to operating organizations that are doing the work of helping people, communities, and our nation as a whole. They are avoiding large tax bills while doing so. He is concerned that too much is just being “parked” at a time when the needs are so great.
For Collins, praising donors like Ms. Scott is his way of pressuring other wealthy men and women to follow her example which could result in releasing many more billions of dollars that are sorely needed makes sense. So, he points out that “she is not creating a permanent and expensive infrastructure, like the Foundations and LLCs that have been the way of other mega-philanthropists. She is moving money out, giving it away, rather than warehousing it or spending it managing her philanthropic enterprise. Her style is so much better than others and deserves to be called out so that others are encouraged to follow her in her footsteps.”
Getting billions of dollars into the hands of working organizations cannot be scoffed at and Collins’ sense that this was a time when this pragmatic approach should place the larger issues of fair taxation and wealth inequality off center stage is one that we should be thinking about. It would certainly be better if much more of the funds of the Gates Foundation, the Chen-Zuckerberg venture, or the funds that Mr. Bezos now says he wants to give away went quickly into the hands of organizations actually doing the work. And if Collins is right, this is a time to advocate for that and not focus on how these huge fortunes were earned or the taxes that should have been paid.
This is not a line of thinking that has escaped me. Just last March, looking at the list of organizations that Ms. Scott had then given game-changing gifts to, I found myself in nodding in approval of what she had done. I understood that her style of asking little in return was revolutionary, and that in my days of leading JCC Chicago I would have swooned over finding a donor like her.
But the more I pondered the larger context of her giving I could not ignore the price we had to pay for this “progressive” style of mega-philanthropy. As much as a donor like Scott deserved praise, I could not forget the harm that was still being done.
So, I concluded then that “after some deep soul searching, I end where I started. I hope enlightened philanthropists, and I call them enlightened because I agree with their words and actions, keep saying and doing good things. Ms. Scott, Ms. Gates, and the authors of the letter to their peers gathered at Davos and I may agree on many things. But the problems they see will only be solvable if the system that allows such great wealth to be amassed is changed. Only an equitable tax system that ensures that wealth is not hoarded at the expense of our common interests can government fulfill its promise of a just and equitable.”
This concern stayed with me. Just last month I returned to this same topic as I reflected on the philanthropy of Laurene Powell Jobs, “I am unable to use my money to put my thoughts into action although I believe they are important, and new and will be successful where others have failed. That Ms. Jobs and other mega-philanthropists do have such power is problematic. I must work within a system and with others if I wish to have an impact. They do not.
“My having to do so is slow and messy. But is at the core of democracy and community. We give up a lot when we allow such great wealth to be amassed into personal fortunes. We give up a lot when we buy into the myth that wealth and wisdom go hand and hand. We give up a lot when we allow personal belief to override collective wisdom.
“The challenge of controlling the power of wealth is daunting. But we cannot continue to look away from the problems it is causing.”
Collins does see the larger context that so troubles me. As he put it in our continuing conversation, “But any praise I have for Scott –or any other billionaire acting more than selfishly -should start with a clear preamble. First, how was the wealth extracted and are they addressing these harms? (She has been silent on Amazon workplace conditions –possibly as part of a divorce decree). Second, charity is not a substitute for paying their fair share of taxes: Are they paying their fair share? And third, we should be deeply concerned about the power that any billionaire wields, whether political, economic and charitable. And we should work toward charity reforms that limit that power and end the closely held private foundation as we know it. People who reduce their taxes by charitable giving should report in a public way because we’re all chipping in for her tax reduction.”
From the conversations I have had over these months with colleagues and acquaintances about big philanthropy, the benevolence of Ms. Scott has great resonance. The issues of an inequitable society that concern Collins and I are important but they grow dim to many because large donations, like those of Ms. Scott to organizations that do good work but are struggling to meet all of the needs they face, are so hard to call into question. Standing in the way of others to follow this new path seems inappropriate
That’s why I worry about any praise of influential voices I respect. We should never allow the way money is given away to blind us from the way that money was earned. It does not require that the evil of acquisition be as blatant as that of the oxycontin-pushing Sackler family for us to turn our back on it and condemn how it was earned.
Perhaps Collins is wiser than I to offer praise even while criticizing. I look forward to this conversation continuing.