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A Billionaire’s Generous Offer Put Into Perspective

May 20, 2019

Today’s NYTimes and virtually every major news outlet in America featured an article describing billionaire Robert F. Smith’s decision to pay off the debts of every single graduate of Morehouse College, the historically black institution that invited him to speak at their commencement. Described as ” the richest black man in America”, Mr. Black made his fortune in investments and he characterized this generous donation as an investment in the future of the graduating class at this college, a donation he hoped the graduates would replicate in the future.

Mr. Smith’s donation of roughly $11,000,000 is heartwarming and exemplary, but it is a relatively inconsequential donation to a billionaire. According to a related NYTimes article, Mr. Smith “…has amassed a fortune that Forbes estimates to be worth $5 billion”, which means that his $11,000,000 donation is analogous to a $220 gift by an individual who has “amassed a fortune” worth $100,000.

As readers of this blog realize, I read and was blown away by Anand Giridharadas’ book “Winners Take All” which described how billionaires are slowly but surely taking control of our country and how many billionaires use their largesse to mask the fact that their business practices are the underlying cause of the problems they are “solving”. Here was his take on Mr. Smith’s donation:

“This is generous, no doubt,” said Anand Giridharadas, author of “Winners Take All” and a frequent critic of large-scale philanthropy. “But a gift like this can make people believe that billionaires are taking care of our problems, and distract us from the ways in which others in finance are working to cause problems like student debt, or the subprime crisis, on an epically greater scale than this gift.”

Mr. Smith’s donation also illustrates the flaw in allowing a small number of individuals to amass huge sums of money and allowing them to spend it in a way they see fit. Based on what the NYTimes reported Mr. Smith’s donations are all worthy but they are somewhat idiosyncratic. For example he’s made large donations to relatively conventional causes: colleges and universities; museums; the arts; and, as was the case at Morehouse, scholarships. But he also made donations to organizations that mirror his personal interests in music:

He bought and restored a storied resort, Lincoln Hills, outside Denver, where black jazz musicians like Duke Ellington once played. And he has founded programs to support music education and minority entrepreneurship in Austin, Tex., where he lives, and Chicago, where Vista has an office.

Mr. Smith’s story is especially compelling because he accrued his wealth on his own, moving from a comfortably middle class background in Denver to that of an individual who could invite John Legend, Seal, and a youth orchestra to perform at his wedding on the Amalfi Coast.

But many billionaires spend their money in ways that are counterproductive to the well-being of our country. The Koch brothers, for example, spend millions to elect anti-environmental and pro-fossil fuel politicians at all levels of government. The also spend millions to create think tanks that issue reports that reflect their libertarian views and join forces with other like-minded billionaires to acquire media outlets to champion the findings of those reports. The messages about “government being the problem”, “welfare queens”, “Willie Horton”; “failing public schools”, and “taxes that are too high” are all the legacy of well heeled donors who are interested in maintaining a status quo that provides them with economic and political leverage…. a status quo that is debilitating to democracy.

 

 

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