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The Naked Capitalist Takes on Bill Gates Privatization Efforts

Earlier this week Yves Smith’s blog, The Naked Capitalist, cross posted an article by Joanne Barkan from the Nonprofit Quarterly titled “How Bill Gates and His Allies Used Their Wealth to Launch Charter Schools in Washington State”. At the outset of the article, Ms. Barkan contrasts the traditional foundations of bygone years, who turned the operation and oversight of their philanthropic work to independent Boards, with those started by today’s billionaires, who want to control and direct the way money is spent…  and she then underscores the major problem with the current state of affairs:

Call it charitable plutocracy—a peculiarly American phenomenon, increasingly problematic and in need of greater scrutiny. Like all forms of plutocracy, this one conflicts with democracy, and exactly how these philanthropists coordinate tax-exempt grantmaking with political funding for maximum effect remains largely obscure. What follows is a case study of the way charitable plutocracy operates on the ground. (This results in) a tug-of-war between government by the people and uber-philanthropists as social engineers.

The balance of the article uses the funding of the charter school movement in Washington State as an example of how this “charitable plutocracy” is changing the face of philanthropy. Ms. Barkan offers a blow-by-blow description of the 20+ year history of legislation and referenda in Washington State on the creation of charter schools and how, after successive defeats on ballots and in the legislature, the “charitable plutocrats” eventually prevailed by a slender majority… only to have the Washington Supreme Court declare the public funding of private schools unconstitutional. The latest workaround? The plutocrats persuaded the Washington legislature to pass a law that earmarks lottery funds for charter schools, thereby circumventing the Constitutional mandate that moneys raised from taxes be used only for public schools.

Barkan concludes her essay with this synopsis:

American democracy is growing ever more plutocratic—a fact that should worry all admirers of government by the people. Big money rules, but multibillionaires acting as philanthropists aggravate the problem by channeling vast sums into the nation’s immense nonprofit sector. Their top-down modus operandi makes this a powerful tool for shaping public policy according to individual beliefs and whims. And they receive less critical scrutiny than other actors in public life. Most people admire expressions of generosity and selflessness and are loath to find fault. In addition, anyone hoping for a grant—which increasingly includes for-profit as well as nonprofit media—treats donors like unassailable royalty. The emperor is always fully clothed.

So, what to do? The measures required to rein in plutocracy in the United States are plain to see and difficult to achieve: radical campaign finance reform to end the corruption of politics by money, and steeply progressive taxation without loopholes to reduce inequality in wealth and power. Private foundations, too, are due for reform. Congress hasn’t overhauled their regulation since 1969, and watchdog agencies are woefully underfunded. But few, if any, megaphilanthropists give these reforms top priority, although many talk endlessly about reducing inequality and providing everyone with a chance at a good life. The interests and egos of philanthro-barons rarely incline toward curbing plutocracy.

Questioning the work of megaphilanthropists is a tricky business. Many readers of this article will be fuming in this way: Would you rather let children remain illiterate, or allow generous people to use their wealth to give them schools? Would you rather send more money to our bumbling government, or let visionary philanthropists solve society’s problems? Here is a counterquestion: Would you rather have self-appointed social engineers—whose sole qualification is vast wealth—shape public policy according to their personal views, or try to repair American democracy?

In my work as a Superintendent for 29 years and school-based administrator and teacher before that I found the glacial pace of change to be frustrating… but the long I worked the more I appreciated the fact that school boards were the purest form of democracy. They receive little to no compensation and are only interested in what they believe to be the public’s interest… and the public is generally satisfied with the overall way schools are operated and are, therefore, resistant to the kinds of changes the mega-philanthropists advocate. Indeed, they are often resistant to the kinds of changes that I view as beneficial for children: changes like the provision of social services within the school and support for parents before children enter school. But school boards DO listen to reason and CAN be persuaded, especially if it will yield a better life for the children they serve. I would urge the mega-philanthropists to use their funds to help underwrite the “education” of school boards, administrators, and teachers— to persuade them that the approaches they want to take will work in their schools. Inside Out and Bottom Up takes time… but the end result is always better and who knows… in their efforts to “educate” school boards, administrators, and teachers the mega-philanthropists might educate themselves!

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