The Problem with Philanthropy

The occasional $120 million check doesn’t offset tech billionaires’ erosion of the public sector.

David Sirota June 13, 2014

Charitable donations from billionaires like Mark Zuckerberg are often contingent on ideological demands that undermine democratic control. (Kris Krug / Flickr / Creative Commons)

Inequal­i­ty and democ­ra­cy are the kind of top­ics you may expect to hear about at a polit­i­cal con­ven­tion, but not nec­es­sar­i­ly at a tech indus­try con­fer­ence. And so for­mer Vice Pres­i­dent Al Gore’s dis­cus­sion at Nashville’s tech-focused South­land Con­fer­ence this week could be viewed in con­text as a jere­mi­ad spot­light­ing taboo truths about tech cul­ture and phil­an­thropic traditions.

To understand the conflict between democracy and this kind of philanthropy, remember that private donations typically come with conditions about how the money must be allocated.

Dis­cussing the econ­o­my, Gore lament­ed that we have ris­ing lev­els of inequal­i­ty and chron­ic under­in­vest­ment” in pub­lic pro­grams. He remind­ed the crowd that when 95 per­cent of all the addi­tion­al nation­al income in the U.S., since the recov­ery began in 09, goes to the top 1%, that’s not an Occu­py Wall Street slo­gan, that’s a fact.”

Gore may have been allud­ing to the tech econ­o­my becom­ing a sig­nif­i­cant dri­ver of that inequality.

As Prince­ton econ­o­mist Alan Blind­er not­ed in a Jan­u­ary Wall Street Jour­nal op-ed, tech­nol­o­gy is clear­ly the major vil­lain” in ris­ing eco­nom­ic inequal­i­ty, as e‑commerce elim­i­nat­ed many ordi­nary’ jobs (while) enhanc(ing) the oppor­tu­ni­ties and rewards for some extra­or­di­nary’ jobs.” One way to see this is in the app econ­o­my, which often rewards bil­lions to com­pa­nies with a rel­a­tive­ly few employ­ees, thus con­cen­trat­ing wealth in few­er hands.

Lat­er in his dis­cus­sion, Gore said that democ­ra­cy has been hacked” by mon­eyed inter­ests. Then, in response to a ques­tion about tech bil­lion­aires spend­ing big on alleged­ly phil­an­thropic enter­pris­es, he said: That’s a good thing, as long as the rest of us don’t ever fall prey to the illu­sion that char­i­ty is going to do the job of what democ­ra­cy needs to do.”

Those lat­ter com­ments come only a few weeks after Facebook’s Mark Zucker­berg announced a $120 mil­lion dona­tion to San Fran­cis­co-area schools. That dona­tion came only a few years after Cal­i­for­nia con­sid­ered a bal­lot mea­sure to increase fund­ing for its schools. Zucker­berg was notably absent from the cam­paign to pass the measure.

That detail is ger­mane to Gore’s point about char­i­ty and democ­ra­cy. Indeed, there seems to be a trend of bil­lion­aires and tech firms mak­ing pri­vate dona­tions to pub­lic insti­tu­tions osten­si­bly with the goal of improv­ing pub­lic ser­vices. Yet, many of these bil­lion­aires are absent from efforts to raise pub­lic resources for those same insti­tu­tions. Zucker­berg is only one example.

For instance, hedge fun­ders make big dona­tions to char­ter schools. Yet, the hedge fund indus­try lob­bies against high­er tax­es that would gen­er­ate new rev­enue for education.

Like­wise, there are the Koch Broth­ers, who simul­ta­ne­ous­ly finance the nation­wide anti-tax move­ment while mak­ing huge dona­tions to pub­lic institutions.

Mean­while, Microsoft boasts about mak­ing dona­tions to schools, while the com­pa­ny has opposed pro­pos­als to increase tax­es to fund those schools.

To under­stand the con­flict between democ­ra­cy and this kind of phil­an­thropy, remem­ber that pri­vate dona­tions typ­i­cal­ly come with con­di­tions about how the mon­ey must be allo­cat­ed. In edu­ca­tion, those con­di­tions can be about any­thing from cur­ricu­lum to test­ing stan­dards to school struc­ture. No mat­ter what the con­di­tions are, though, they effec­tive­ly cir­cum­vent the demo­c­ra­t­ic process and dic­tate pol­i­cy to pub­lic insti­tu­tions. While those insti­tu­tions can reject a pri­vate donor’s mon­ey, they are often des­per­ate for resources.

In this, we see a vicious cycle that under­mines demo­c­ra­t­ic con­trol. Big mon­ey inter­ests use anti-demo­c­ra­t­ic cam­paign finance laws to fund anti-tax poli­cies that deprive pub­lic insti­tu­tions of resources. Those poli­cies make pub­lic insti­tu­tions des­per­ate for pri­vate resources. When phil­an­thropists offer those resources, they often make the mon­ey con­tin­gent on pub­lic offi­cials relin­quish­ing demo­c­ra­t­ic con­trol and acced­ing to ide­o­log­i­cal demands.

Dis­rup­tion the­o­ry is usu­al­ly the defense of all this — the hypoth­e­sis being that bil­lion­aire cash is the only way to force pub­lic insti­tu­tions to do what they sup­pos­ed­ly need to do. But whether or not you believe that the­o­ry, Gore is cor­rect: It isn’t demo­c­ra­t­ic. In fact, it is quite the opposite.

David Siro­ta is an award­win­ning inves­tiga­tive jour­nal­ist and an In These Times senior edi­tor. He served as speech writer for Bernie Sanders’ 2020 cam­paign. Fol­low him on Twit­ter @davidsirota.
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