Complexity is the bread and butter of the wealth defense industry.
It’s charity’s high season in America. From Giving Tuesday to year-end appeals, nonprofits and charities receive more donations during this five week stretch than any other on the calendar.
For those with enough income to itemize, this is in no small part due to the tax benefits of giving. But the rest of us are moved by something more intangible — whether cultural traditions or the holiday spirit.
Giving Tuesday, the organization behind the self-described “groundbreaking global generosity movement,” hopes to harness the altruism stirred by time with family and friends. Their global philanthropic apparatus sponsors a day of fervor for charities, asking anyone and everyone to contribute time or money to a cause they care about.
Philanthropic titans see value in stimulating mass giving. The Bill and Melinda Gates Foundation recently gave $10 million to Giving Tuesday to help “further unleash the power of radical generosity across the globe.”
“Anyone can be a giver. Everyone has resources to share and make the world a better place — whether it’s through time, money, expertise, or your voice,” said Melinda French Gates in a Giving Tuesday press release. MacKenzie Scott, a groundbreaking philanthropist and fellow Giving Tuesday booster, expressed a similar sentiment when releasing her list of grantees last year. Why should her billions of dollars in gifts, she wondered, generate any more respect or attention than the charitable impulses of a volunteer, a small-dollar donor, or a loving friend?
The goal of Giving Tuesday is honorable. We should empower smaller dollar donors and celebrate generosity. But it’s harder than ever for the giving behaviors and charitable impulses of regular people to be expressed through philanthropy — a practice captured by the elite.
These last few weeks have shown us just how effectively billionaire philanthropy drowns out the convictions and priorities of regular people.
Take Jeff Bezos, who only recently verbally committed to giving away the majority of his wealth in his lifetime in the wake of allegations of employee abuse in his home and mass layoffs at Amazon. He also gave Dolly Parton a $100 million “Courage and Civility Award” to allocate wherever she sees fit. Incorporating a lovable celebrity into his huge disbursement project doesn’t exactly signal a comprehensive approach to giving – more a concern with public perception. (This was mere weeks after Bezos himself was honored as a Prophet of Philanthropy at the Vatican.)
Or consider the boom and bust of Sam Bankman-Fried’s business, which took his philanthropy down with it. As SBF’s offshore crypto company FTX shed billions of dollars in valuation, his philanthropic and political giving outfits completely imploded. His disbanded Future Fund has left countless grantees in the lurch — deepening skepticism of the effective altruism movement’s “detached godliness” and its abdication of responsibility to alleviate present day suffering. It’s dangerous to let billionaires attempt to build charitable paradigms atop a volatile, consolidated source of wealth.
Even MacKenzie Scott’s giving exemplifies the outsize power of billionaire philanthropy. Her direct, trust-based, and publicity-averse approach to philanthropy has broken records and changed lives — and she just announced another several billion dollars worth of unrestricted grants to hundreds of nonprofits and funds across the country. But her choices, often minimally explained, indicate a somewhat confusing worldview. Among this round’s recipients, for example, were both charter schools and public schools in the same cities.
While focusing on building equity, Scott has, to public knowledge, sidestepped the transformative potential of political advocacy to reform the tax code and philanthropic sector. As Inside Philanthropy’s David Callahan wrote to her in an open letter: “For all the ways you have disrupted philanthropy, your giving to date mirrors one of the sector’s signature flaws, which is to tread cautiously on core issues of political economy and electoral power.”
In spite of all their announcements and proclamations, rich philanthropists prefer to give to intermediaries that they control. Far too often, when the ultrawealthy make grand statements of their generosity, rather than giving directly, they make pledges — gaining cover for taking their time disbursing money to working charities, while they enjoy a tax break and kick back in their chairs.
The numbers confirm that philanthropy is top-heavier than ever. While individual giving hovers around 2 percent of annual disposable income, the accrual of wealth in private foundations and donor-advised funds shoots to the stars. Donor-advised fund wealth grew by an astonishing 40 percent in the last year, subject to no payout or transparency requirements.
1) @nptrust just released their 2021 report on donor-advised funds. The growth of these giving vehicles is staggering.#DAFs now take in 1/5 of individual giving in the US and have overtaken foundations as the favorite charities of the wealthy.
A🧵of hot takes from the report: pic.twitter.com/eCjHasLU1J
— Helen Flannery (@HelenofIPS) November 16, 2022
The proceeds of Giving Tuesday make up a small fraction of total annual philanthropic giving, particularly considering all the hard work and fundraising efforts facilitating the occasion. Giving Tuesday generated just shy of $2.5 billion in 2020 out of a total $471.5 billion given to charity that year. Giving Tuesday’s figure is worth about 5 percent of the $48 billion in donations made to donor-advised funds alone in 2020.
In 2021, Giving Tuesday generated $2.7 billion in US gifts (on top of “countless acts of generosity expressed in non-monetary ways”). That’s an inspiring sum, but about the same as the amount of donations over $1 million made to donor-advised funds in the same year.
Fidelity Charitable, a commercial DAF sponsor and the largest charity in the country, received $15.3 billion in contributions in 2021 — five times more than the entire amount given on Giving Tuesday that year.
That the fundraising tally of a global giving campaign is so totally eclipsed by the whims of big dollar donors proves that we are in desperate need of change. A billionaire’s private foundation becoming Giving Tuesday’s leading sponsor perfectly illustrates the problem at hand: No $10 million dollar gift to empower mass giving will challenge the excessive market share of billionaire philanthropy.
As 2022 draws to a close and the fundraising emails pour in, we should give to the people and causes we care about. But we should also demand a world in which our giving makes as much of a difference as that of the wealthiest among us — where the wealthiest cede power to the charities and causes they claim to support.