Government by Philanthropy?

Lately, we have seen what I hope is a trend: very wealthy people using philanthropy to improve the lives of those less fortunate. These individuals have chosen to put some of their money to good use instead of indulging greed and vanity. Here are four examples:

1. Environmental Philanthropy

Patagonia logo, Rose Marcario, philanthropy, environmentRose Marcario, CEO of Patagonia, donated the $10 million dollars her company reaped in the Trump tax deal to non-profit groups. The company makes outdoor gear so she chose groups that work on issues related to climate change and the environment. In making the announcement in November of 2018, Ms. Marcario commented:

“Based on last year’s irresponsible tax cut, Patagonia will owe less in taxes this year—$10 million less, in fact. Instead of putting the money back into our business, we’re responding by putting $10 million back into the planet. Our home planet needs it more than we do.”

2. Educational Generosity

This week, Robert F. Smith, founder of Vista Equity Partners, surprised the Morehouse College graduating class of 2019 when he served as their commencement speaker. After receiving an honorary doctorate, the billionaire investor announced that he and his family would pay all the student loans for graduating class members. This gift came on top of a $1.5 million gift to the school.

In freeing the students from future loan payments, Mr. Smith said, “This is my class, 2019, and my family is making a grant to eliminate their student loans.” He added, “I know my class will pay it forward.”

3. Feeding the Children

Chobani yogurt, Hamdi Ulukaya, Warwick School District, student lunches, philanthropyWhen Hamdi Ulukaya, founder and CEO of yogurt manufacturer Chobani, heard that the Warwick, Rhode Island, School District had cut off hot  lunches for children who could not pay, he was appalled. Instead of a hot lunch, these kids were receiving only a cold sunflower-seed butter and jelly sandwich.

In May Mr. Ulukaya announced that his company would pay $50,000 to eliminate the district’s school lunch debt. Mr. Ulukaya, an immigrant and a Muslim, said:

“We’ll take care of this school’s bill because everybody at Chobani was heartbroken and they’re stepping up and they’re going to something about it. But it’s just a small one. We need everywhere, everywhere around the country, to eliminate this for all, forever.”

The Warwick School District has since revoked the policy of penalizing children who cannot afford to eat a hot lunch. Ridicule goes a long way.

4. Training Future Doctors

The New York University School of Medicine went tuition-free for its doctors-in-training in 2018 when Ken Langone, founder and CEO of Home Depot, and his wife, Elaine, donated $100 million toward the initiative. Then Mr. Langone helped raise the additional $350 million to build the necessary endowment. The school can now offer a cost-free education to every medical student in perpetuity.

Many more prospective doctors from all economic levels can now study to become physicians. NYU officials announced that since the policy was announced last year, applications for the class of 2023, the first cycle eligible, jumped 47% to 8,932, up from 6,069, last year.

Human Beings Stepping Up

Stepping Up, philanthropy, generosityNow, I am delighted to hear these stories of generosity and people caring for others. It gives me great hope that America has not sunk completely into the swamp of divisiveness and a slough of despond. It reminds me that, despite politics and a widening economic gap, we are all human beings who can transcend hate and anger.

Yet, these stories have another aspect to them. The fact that billionaire philanthropists have to step in means that we the people are not stepping up en masse to do the right thing.

  • Why does a wealthy man have to pay school lunch bills for little kids in a publicly funded school system — especially when it may be the only meal they eat that day?
  • Should billionaires be the ones to create medical schools that don’t sink students into decades of six-figure debt?
  • Why does an outdoor apparel company have to finance initiatives to protect the environment we all live in?

In other words, why must we rely on philanthropy to do the things we should be doing ourselves, for the good of the country?

A Simple Answer

The answer is simple: because we, the American people, will not. Every time we vote for politicians who make paying taxes the great bête noir of American life, we vote for government by Go Fund Me campaigns and private philanthropy. We declare, “This is not our responsibility” and wash our hands of any involvement, much less guilt.

Every time we buy the line that this country can’t afford policies that help American citizens because it is broke, we ignore the $989 billion military budget—$576 of which is the base budget for the Department of Defense. That number is larger than the military budgets of the next 17 countries combined. Or we decide that funding the military-industrial complex through unneeded, multi-million-dollar weapon systems is more important than providing healthcare and education to American citizens.

The Misrepresentation of Socialism

And when we accept the idea that helping the people of America to live better lives is “socialism” we swallow a misrepresentation—one that would have denied us significant benefits. Programs that opponents have labeled “socialism” include:

  • Medicare
  • Social Security
  • National electrical power
  • Interstate highways
  • Unemployment insurance
  • Medicaid
  • Public education
  • Public transportation

Today, however, many Americans as well as the economy now depend on these programs, and some would have trouble staying alive without them.

This post is not intended as a screed about socialism vs democracy or even about the accurate meaning of the word socialism. I mean to point out that we should not be depending on the kindness of strangers to educate our future doctors or ensure that little kids have a full stomach. While that kind of philanthropy warms our hearts, it is not predictable, dependable or scalable. Some people, like Morehouse College’s class of 2019, will benefit. Others will not.

Stimulating More Philanthropy

Jeff Koonz, Rabbit, record price, art, Robert Mnuchin

“Rabbit” by Jeff Koonz

Perhaps these generous gifts will incentivize other billionaires to open their investment portfolios and do some real good with the money. That sure beats wasting $91 million on a mylar balloon shaped like a rabbit just to one-up other wealthy art collectors.

One hesitates to put Jeff Koonz’s mylar rabbit in the same category as art, but there you are. I love art but even $900 for a silver rabbit balloon is $994 too much. $91 million is simply obscene.

It sure would be great if the super-rich began trying to out-do one another by donating more to philanthropy. Even if all they wanted was their picture on the cover of Time or a four-column spread in the New York Times, the result would benefit society.

Why Philanthropy Is Not the Answer

Just think of what Treasury Secretary Steven Mnuchin’s father, Robert Mnuchin, could have done with that money to help others instead of padding his own ego. Ninety-one million dollars can buy a lot of hot lunches or put a lot of young people through college, It can fund healthcare clinics and work on cleaning the oceans. Clearly, sharing the wealth hasn’t reached that far into the One Percent yet. Although it’s hard to believe Mr. Mnuchin has never heard the term tikkun olam.

And that’s why we can’t wait for enough millionaires and billionaires to grow a conscience and bankroll the projects that need doing. Kudos to those who have. But it’s up to us, the taxpayers, the people of America, to take care of ourselves. Let’s all step up.

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