Abstract
Rob Reich’s new book starts with a story that will sound strange to those aware of the current relationship between mega-philanthropy and those in government: when the oil magnate John D. Rockefeller set out to establish a foundation to invest his fortune in good works long after he had passed, he sought approval from U.S. Congress rather than the New York state legislature—as was merely required—because he felt the local government would seek to impose draconian limits on how much could be given away. Today, one would expect Congress to role over at such a request, but, back then, Rockefeller’s proposal was opposed by a wide variety of political actors, including then president William Howard Taft, and it was dismissed by some as “repugnant to the whole idea of a democratic society.” Why should, many asked, someone’s wealth outlast them, thereby continuing to shape the world according to the whims of a select few beyond the control of taxpayer’s elected and accountable representatives?
Picking up on this issue, Just Giving documents how the unquestioning and celebratory response to giving can be a failure of modern societies, a failure to adequately assess what role philanthropy should play in democracy. The book’s aspiration is to establish a political theory of philanthropy, seeking to provide a framework through which we can evaluate normative judgments of what philanthropy should do. One could query how new this is, as both microanalyses of the efficacy of specific policy changes that shape giving and nonprofit behavior and macroanalyses of the relationship between the nonprofit sector and the state already exist, but in how he incorporates both the long view of historical precedent and current analysis of where philanthropy is actually exacerbating inequality, ably shifting from grand theory to statistics about tax deductions, Reich’s book will unquestionably become a touchstone text for those seeking to reframe philanthropy. It certainly comes at a cultural and political moment when critical texts by authors such as Linsey McGoey (2015) and Anand Giridharadas (2019), and David Farenthold’s assiduous reporting of the Trump foundation in the Washington Post, have ensured that the philanthropy of the rich forms part of wider critiques of neoliberalism.
As part of that critique, this is a book filled with depressing reality. The most maddening part of Reich’s work is a chapter devoted to unpicking in stark detail the unfairness of the U.S. tax code and how it treats different donors according to their wealth. In a series of brutally simple charts and tables, Reich shows philanthropy’s uneasy relationship to tackling inequality—where public policy exists that treats donors in deeply unequal ways and that charitable giving does not principally benefit the poor. The statistics of the value of tax deductions for donating are shocking in their unambiguous unfairness, with poorer donors unable to claim back tax against their donations, and the wealthiest able to claim back almost 40% of it. As Reich wryly notes, such deductions are in effect the public subsidizing the rich to make personal choices about where to give their money; spending, without democratic accountability, that may in fact be a complete waste of money: “the wasting of philanthropic assets is the wasting of assets that are partially the public’s” (p. 82). Many argue of course that philanthropic spending by the rich is less egregious if their gifts benefit the poor. Reich, making use of the public statistics by Indiana University on where donations go, unpicks this reality. He argues that anyone who believes that charity implies something about almsgiving or assistance for the disadvantaged is mistaken, with the best case scenario that at most one-third of all charity goes to help the poor, and that millionaires contribute at most one-fifth of their giving to the needs of the poor. Such findings should not surprise anyone doing nonprofit research, and yet those who critique big philanthropy are still castigated as either jealous or ungrateful, or of sniping from the sidelines.
Despite the increasingly skeptical atmosphere for mega-philanthropy, where critical arguments are growing in intensity and media coverage, witnessed in the debates that gained the most traction from the World Economic Forum in Davos in early 2019, its fair to say that Reich’s conclusions are not as dramatic or revolutionary as one would expect from his presentation of the present. Quoting Murphy and Nagel (2002), Reich writes of the hope that charity acts as “the process by which a community discharges its collective responsibility to alleviate the worst aspects of life at the bottom of the socioeconomic ladder” (p. 127). Despite this ambition, Just Giving rigorously documents the power grabs, antidemocratic dominance, and the warehousing of philanthropic gifts to take advantage of tax breaks, yet the conclusions and recommendations are quite imprecise as to how such malpractices are to be challenged, with a certain assumption that the state is able or even willing to do something about it. The book feels overly hopeful about the ability of current political actors to act in a way that reforms the nature of big philanthropy, or at least make it any sort of public priority. Few people could disagree with his hope that foundations should aim for “discovery,” an experimentalist approach to assessing long-term policy solutions, solutions which can then be selected by democratically elected policymakers, but many rich givers would claim this is already what they are doing. To close with semi-Utopian ideas about how things should be is a noble aim, but an aim undermined by the fact that Just Giving contains no evidence that philanthropy can be the thing Reich demonstrates we need it to be. The political theory meets an unfailingly depressing realpolitik.
John D. Rockefeller eventually got his foundation, without many of the controls he had been willing to add to please Congress. What Reich does in this book is to demonstrate how the notion of philanthropy as something to be democratically contained has greatly diminished over the last hundred years, leaving us less enlightened and more unequal. Even with the need for a clearer, bolder roadmap for how we translate the theory of philanthropy into philanthropic practices, everyone should read this book—and everyone should be angry.