Home > Uncategorized > “Philanthrocapitalism”: Giving Away Seed Money that Yields Profits

“Philanthrocapitalism”: Giving Away Seed Money that Yields Profits

Truthout article by Cynthia Liu describes Eli Broad’s plan to create charter schools to house 130,000 Los Angeles students as an act of “philanthrocapitalism”, which she defines in this sentence:

“Philanthrocapitalism describes a certain kind of “weaponized generosity” where donors offer their self-interested charitable giving to remedy the very lack they create elsewhere.

Liu offers this description of how philanthrocapitalism served Eli Broad in another venture in LA:

For example: originally, Broad wanted to lease the expensive downtown Los Angeles parcel the Museum sits on for $1 a year over 99 years. Said one county supervisor, “Instead of a project that generates sales and property taxes, we’ll now have an art museum that generates no property or sales taxes and Mr. Broad will get the land for free.” It’s now leased for $7.7 million a year for 99 years, and the 501c3 Broad Foundation housed inside the museum still doesn’t put much by way of revenue back into the city.

Liu shows how Broad, like many “philanthrocapitalists”, funds opposition to initiatives that are intended to provide additional funds for public education and funds support for initiatives that are designed to undercut unions. The ultimate goal in this case is to ensure that their taxes are minimal so that their profits can be maximized.

I look at philanthrocapitalism as a means of giving away seed money to garner profit… in some cases the money goes to political leaders to pave the way to enable for-profit charter schools to thrive and in other cases giving away technology that is on the cusp of being obsolete to prime the pump for future acquisitions. Eva Moskovitz’ benefactors made large campaign contributions to Governor Cuomo and the apparent quid pro quo was assurance that Ms. Moskovitz’ schools would continue receiving rent-free space in NYC public schools and Mayor de Blasio’s control would be limited to one year at a time. The bait-and-switch with computer donations is also a way for technology companies to reap multiple benefits. They get a tax deduction for the giveaway; a de facto tax deduction because the school district budgets in their community do not require the district to spend on the initial acquisition of computers, and the added benefit of effective dictating the operating system and software a school district will be using for years to come, providing them with a new revenue stream.

As Liu suggests, “(t)he cure for oligarchy is more democracy“, which means that parents need to get engaged in the governance of schools. When parents stay home on election day, opportunistic oligarchs will seize the opportunity created by apathy to gain control of the local school board and open the doors for profit-making charters to move in. And school boards, PTAs, and administrators should beware of corporations bearing gifts or grants that require the use of technology: the strings attached will likely cost more money in the long run than the size of the gift. The ink purchases for your printer might be a guide for this reality!

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