Home > Uncategorized > Deseret News Examines Impact of Philanthropy on the Public Sector and Finds it Wanting

Deseret News Examines Impact of Philanthropy on the Public Sector and Finds it Wanting

January 5, 2020

Gillian Friedman of the Deseret News recently wrote and compelling article based on this question:

Is philanthropy a threat to democracy?

It will come as no surprise to readers of this blog that I believe the answer to that question is a resounding “YES”… and while Ms. Friedman’s response is more equivocal, her overall response is the same as mine. Indeed, a couple of her quotes show that her concerns mirror mine in this regard:

….when billionaires step in to provide public services, it can also give them disproportionate influence over public policy and circumvent taxpayer input or oversight, argues Rob Reich, co-director of Stanford University’s Center on Philanthropy and Civil Society, in his book “Just Giving: Why Philanthropy is Failing Democracy and How it Can Do Better.”

Big donor philanthropy … is an exercise of power — the attempt to direct private assets toward some public purpose,” wrote Reich. “It is a form of power that is unaccountable, low on transparency, donor directed, and by default perpetual. Big philanthropy is a plutocratic element in democratic society…”

Because charitable donations are tax-deductible, philanthropy can essentially keep money in the private realm that would have otherwise been managed by the government.

But for the government to spend tax money on a certain program or public service — schools, roads, health care — taxpayers must vote on the expenditure, or vote for the elected official making the decision on their behalf (who can then be voted out). For example, when the Democrats pushed through Obamacare, the blowback was so strong it catalyzed the rise of of the Tea Party Caucus and arguably led to the Democrats losing control of the House.

On the other hand, a philanthropist can choose to spend their money how they like, funding certain kinds of research, or education, based on their own worldview, political orientation, or religious beliefs, without complete transparency.

Ms. Friedman offers the counter-argument to this kind of dark power, but it is weak, especially when one looks at specific examples of philanthropy as it applies to public education:

Because philanthropies aren’t run by people worried about getting reelected or making a profit, they can stay focused on their values and make bolder decisions and riskier investments than politicians or business owners.

“It is precisely that freedom to go against the status quo and be a bit anti-democratic that has allowed philanthropy to move the needle on a lot of social issues because it’s able to go against the public opinion at the time and take on unpopular causes and drive social change,” said Davies.

After all, democracy isn’t a perfect system, said Davies. When the only way to express one’s opinion is by getting the most votes at the ballot box, it can create a “tyranny of the majority,” he said.

Philanthropic foundations can help make up for that by funding important causes that might get overlooked by the will of the majority— such as supporting minority religions, or animal rights, or pushing for innovations in fields such as disease prevention, climate change or cancer research.

Philanthropy has a really important role to play in making sure the minority’s views can be heard, and bringing some of those issues to mainstream political attention,” said Davies. “And that’s good for democracy.”

The most notably philanthropists in education have promoted for-profit charter schools and/or technology-based interaction in charter and public schools that are hardly an effort to make sure the minority’s views are heard… and the most crucial need of education, the abandonment of the long-standing grouping of students by age cohorts… remains unchanged by philanthropists, most of whom base their “innovative ideas” on the continuation of the traditional model for schools. As for its impact on democracy, there are few institutions in the US more democratic than the local school board… and I am not aware of any efforts by any philanthropists to use elected boards to drive change. Rather, virtually every public education innovation funded by philanthropy is managed by an un-elected board whose meetings do not need to conform to public law.

Is philanthropy a threat to democracy?

Absolutely… especially when billionaires starve districts from tax revenue and introduce “innovations” to solve the problems created by short-changing schools.


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