Rich People’s Charity Won’t Save The World

From time to time, a news story about a very wealthy individual doing something very kind with their money goes viral. Billionaire Robert F. Smith recently paid off the student debt of the entire Morehouse College class of 2019. Hamdi Ulukaya, CEO of Chobani, paid off student lunch debts for an entire Rhode Island school district. Last year, Patagonia CEO Rose Marcario pledged to donate the company’s entire $10 million tax cut to non-profit organizations fighting climate change. These are stories of extraordinary generosity — and that’s kind of the problem.

Taken together, these stories may create the impression that a few people with big bank accounts (and bigger hearts) can fix society’s problems. But the reality is that these stories are remarkable precisely because they are so uncommon, and the sporadic generosity of even the kindest rich people is no substitute for systemic solutions to systemic problems like widespread inequality. Rather than relying on millionaires to pick and choose who to help, and when and how to do it, we need to make sure they’re paying their fair share of taxes and use our democratic processes to decide collectively where we want to direct resources.

Charitable giving in the United States reached a record $410 billion in 2018, equivalent to nearly a third of the total $1.4 trillion in discretionary spending proposed in the Trump administration’s 2020 budget. Charity makes up a significant part of the American economy, and it is unquestionably a good thing that Americans are giving money to charitable causes. But it’s also worth asking whether charity is up to the task of solving society’s problems, especially in comparison to the key government programs millions of Americans count on.

Behind the haze of buzzwords like “win-win”, “giving back”, and “social purpose”, wealthy “thought leaders” pour millions into gestures of generosity while failing to address the structural issues behind the problems they’re “fixing.” At best, these would-be saviors suffer from a glaring poverty of ambition; at worst, they knowingly leverage the optics of generosity to make it easier to hold onto their own privilege.

Everyone wants their name on a museum or art gallery, but no one’s jumping to pay for water treatment plants or any of the other mundane but critical projects we expect government to take care of. Public spectacles of generosity can even help provide cover for less altruistic behavior. Private equity mogul David Rubenstein, for example, proudly funds causes like the Washington Monument restoration while fighting to protect the carried interest loophole, a provision in the tax code that allows billionaire fund managers like himself to save billions of dollars in taxes each year. Closing tax loopholes would do more to alleviate inequality than repairing a monument, but of course it would cut into Rubenstein’s bottom line.

A democratic government has an obligation to serve all of its people, and is directly accountable to those people at the ballot box, whereas a private foundation or charity will invariably reflect the biases of its leadership and is primarily accountable to its funders. The American government’s failure to address the needs of all people isn’t because government isn’t equipped to do so, it’s because of a sustained, well-resourced campaign to undermine democracy and buy political influence by Republicans lawmakers and their rich friends. The way forward is not side-stepping government with ad hoc charity but rather a coordinated, democratic effort to leverage government in the service of all people.

Our society is taking on water, and a few well-meaning rich folks are trying to plug the leaks with hundred-dollar bills. That’s all well and good, but it’s no substitute for (and much more expensive than) actually fixing the boat. With more Americans sliding into poverty while CEOs take home record paychecks, it’s painfully obvious that we can’t count on a handful of rich people to save the world — we can really only count on the rich to enrich themselves further. Instead, we must tax the rich to ensure they pay their fair share, and act as a society to address the needs of the American people.

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