I was somewhat taken aback last month by a Washington Post book review of David Callahan’s THE GIVERS: Wealth, Power, and Philanthropy In a New Gilded Age. (Callahan recently gave an interview on 1A with the AVP of the Rockefeller Foundation and the CEO of the Casey Foundation. You can hear the interview/discussion HERE.) The reviewer, Robert G. Kaiser, a former managing editor at the Post, takes a mostly dim view of ‘the astounding growth of American private wealth in the past quarter century, the people who have accumulated it and the ways they are using their money, often aggressively, to change the world – sometimes for the better, sometimes not.’
The last third of the 19th century is often cited as ‘The Golden Age of Philanthropy.’ There were 100 millionaires at the beginning of the 1870’s. By 1892 there were 4,047. The philanthropy of many great givers including Andrew Carnegie, John Rockefeller, Julius Rosenwald, and Jane and Leland Stanford transformed American institutions, many of them colleges and universities. And all of this when there was no income tax and thus no tax deduction.
Kaiser begins with a reference to Thomas Piketty’s Capital in the Twenty-First Century and modern income equality in capitalist countries. Now I certainly agree that income inequality is a most important issue. When those at the top prosper while middle- and low-income families are struggling with inflation-adjusted incomes lower than they were 10 and 20 years ago, democracy is imperiled. However, that seems to me to be a separate issue from how much – and how – the wealthy are giving.
A decade ago, Kaiser wrote So Damn Much Money, a penetrating analysis of the impact of spending on – and by – lobbyists. So, I get it that he has a healthy skepticism about big money. In the review he says ‘Callahan’s account of how the rich exercise power in modern America is ominous and grim, though he avoids drawing the darkest conclusions his evidence would support.’ No worry, Kaiser does it for him by emphasizing the giving of George Soros and Charles and David Koch to policy and advocacy groups. Callahan puts these gifts in perspective as relatively small in the scheme of overall giving by the very wealthy but Kaiser seems to miss that point.
Kaiser makes special note of Michael Bloomberg’s extraordinary spending on his mayoral campaigns but says nary a word about his even more extraordinary philanthropy. He points to Bill Gates as the leading example of the new philanthropists who are Callahan’s subjects and confounds me with his two observations. First, he seems troubled by the fact that the Gates Foundation is nearing $40 billion, is three times the size of the Ford Foundation and nine times that of the Rockefeller Foundation, and has given away $37 billion in its 16 years of existence. He goes on to note that since the Gates’ are giving most of their estates to the Foundation it will likely exceed $150 billion as it begins its 20-year sunset phase. He ends with ‘already the Gates Foundation has helped control the AIDS epidemic in Africa, reduce malaria, create the Common Core school curriculum and a great deal more.’ Gee, I am having a hard time understanding what he thinks the problem is.
I am encouraged by Callahan’s prediction that because of Gates’ and Warren Buffet’s work on the giving pledge there will be such a huge swell in giving by the wealthy that philanthropic expenditures may exceed non-defense discretionary spending by the federal government. Seems like a delightful rather than dreadful future to me.