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Is Philanthropy the Same As Plutocracy?

Research & Commentary
January 26, 2015

by Larry Checco

In the philanthropy versus policy debate, the entire democratic process is at stake.

i will fill this in later

When wealthy people like the Koch brothers, the Gateses and others finance the common good, it sets the stage for a plutocracy.

By Larry Checco

At a recent Brookings Institution event that focused on income inequality, John Prideaux—Washington correspondent for The Economist—was asked what a “good unequal society” would look like.

Prideaux replied that “a lot of the things we think are public goods would be provided for privately…in a sort of philanthropic way.” He added that this would entail a revival “of the 18th century idea of the obligation of those at the top of the income spectrum towards those at the bottom.”

Prideaux then gave an off-handed example of how the Gates Foundation perhaps—his fingers crossed—could provide better “welfare” to the people than “any government bureaucracy.”

Fast forward to a recent op-ed piece in The Washington Post, written by a husband and wife team of obvious affluence, influence, and good will.

John and Carol Saeman, both devout Catholics, give generously of their time and treasure to the charitable works of their church (John is president of an investment and management company), as well as to other more laic (nonclerical, lay) organizations, including those run by people such as the billionaire Koch Brothers.

“Helping the poor…requires a fundamental change in how our society—and government—understands and seeks to address poverty,” they say in their op-ed. “For us, promoting limited government alongside the Kochs” is in keeping with “Pope Francis’ call to love and serve the poor.” [pullquote] Advocating philanthropy over policy is a very slippery slope. [/pullquote]

The Koch organization that the Saemans ardently support is called Freedom Partners, a nonprofit organization composed of around 200 members, each paying a minimum of $100,000 in annual dues. In 2012, Freedom Partners raised $256 million, making grants worth a total of $236 million to conservative organizations prior to the midterm elections, including Tea Party groups and organizations opposed to The Affordable Care Act.

Your average middle-class guy is probably not a member.

Regardless of the politics they embrace, both Prideaux and the Saemans put forth the perfect scenario for a plutocracy—namely a society where wealthy people like the Koch brothers, the Gateses and others should determine and finance the common good verses employing the democratic process of the people.

In short, they are advocating philanthropy over policy, which leads us down a very slippery slope, folks.

When government works, policy reflects the will of We, the People. We elect political leaders whose job it is to pass laws and appropriate funds that promote the common good. If we don’t like the laws they pass or the funds they appropriate we have the opportunity, privilege and right to vote them out.

As someone who has worked in the nonprofit sector for the better part of four decades, I can say with great confidence we run the real and great risk of relying on the kindness—and whimsy—of strangers. [pullquote] Policy reflects the will of the people. But when philanthropists decide to change course, what recourse do we have? Nada. [/pullquote]

If a huge philanthropic organization like the Gates Foundation decides to change course, what recourse do we, the people, have? Nada.

As imperfect and dysfunctional as our government is, I’m not willing to hand it over to the rich, regardless of their noble and good intentions—especially when it comes to defining the common good. Over the past 30 years or so, we’ve witnessed how that good has often translated into less taxes for them and less good for the rest of us.

One last point.

In their op-ed, the Saemans make the argument that our welfare system encourages dependency and denies dignity to the poor. They leave out the fact that many people who work 40 hours a week at minimum wage for major corporations like Wal-Mart, McDonalds and other large, well-heeled corporations lose dignity by having to rely on government programs to make ends meet, including food stamps.  [pullquote] The same corporate titans who engage in philanthropy pay people less than a living wage. [/pullquote]

BTW– in 2012, Forbes reported that just six Walmart heirs have as much wealth as 42 percent of all Americans. Say what!

Want to give people dignity? Rather than philanthropy, let’s pay hardworking folks a wage they can live and raise a family on. I guarantee you that people like the Waltons, Kochs and others in their economic stratosphere won’t miss a meal by doing so—and we won’t have to rely on their philanthropy.

[A version of this piece originally appeared on the Government and Accountability Institute’s website.]

Larry Checco is president of Checco Communications and a columnist for Accountability Central where he writes on economics, politics and income inequality. He holds a degree in Economics from Syracuse University and an MA in Journalism and Public Affairs from American University.

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