The Pitchforks Are Coming For Philanthropy

What should be done about publicly-subsidized extraordinarily wealthy immortal corporations who want to reshape our society?

Oh bondage, up yours! — X-Ray Spex

Part feminist rallying cry, part anti-consumerist manifesto, the English punk band X-Ray Spex’s 1977 debut describes how I now feel after reading three compelling recent books on philanthropy. As a longtime participant in the symbiotic grantor/grantee relationship myself, I’m agitated and challenged by what I’ve read. While the change these authors call for may be slow to come, I think that taken together, these books may come to be seen as the beginning of much-needed healing and reform in the world of charitable giving.

I am a big believer in independent resource generation, particularly through ways that recruit, develop, train and mobilize members to build and run their own organizations. But as a social justice organizer and grantee, I know there can be a temptation to reach for easy money by pitching ideas to foundations which are legally required to give money away to qualified organizations.

When did community, worker and electoral organizing turn into a Venn diagram, where all we can aspire to is what lies in the overlap between what’s fundable and what builds power?

To figure this out, I delved into three recent books that come at the problems (and solutions) in modern philanthropy from widely different perspectives. When taken together, Edgar Villanueva’s Decolonizing Wealth, Anand Giridharadas’ Winners Take All, and Rob Reich’s Just Giving form a prism, we can use to separate the glaring white light that emanates from philanthropy into its constituent elements.

Winners Take All goes beyond just philanthropy to examine the wider network of “winners” and the constricting bubble of allowable ideas that surrounds them. Giridharadas sheds light on the fact that, “All around us, the winners in our highly inequitable status quo declare themselves partisans of change…They reflect a highly influential view that the winners of an unjust status quo — and the tools and mentalities and values that helped them win — are the secret to redressing the injustices.”

Reich takes, as one might expect from this political theorist, a philosophical approach to his examination of philanthropy. He begins by locating the roots of philanthropy in Islam’s waqf system, “in a non-Judeo-Christian context, a number of core features of the contemporary private philanthropic foundation: a permanent endowment whose revenues are designed to provide public benefits, tax protections for the endowment, legal protections for adhering to donor intent, permission to exist in perpetuity, conferral of both material and status advantages to the donor and the donor’s family, with the aggregate result that the supply of public benefits is partly decentralized. The waqf system stands, as does the private foundation, as a widely used mechanism for the private provision of public goods through a permanent endowment.”

Fast forward a millennium, and modern philanthropy has now swelled to $800 billion in endowments in the United States — and is growing rapidly along with markets and mechanisms like donor advised funds.

In 2016, Americans diverted $50 billion in tax payments to charitable giving (which is more than the minimum 5 percent payout), which begs the question that Reich examines: what is the public benefit of private perpetual foundations?

Edgar Villanueva’s personal take on philanthropy comes from a career spanning more than fifteen years at the Schott Foundation and other grant-giving institutions, which he combines the healing traditions of his own heritage as a Native American from the Lumbee Tribe of North Carolina.

He declares that, “It is (we are) a sleepwalking sector, white zombies spewing the money of dead white people in the name of charity and benevolence. It is
(we are) colonialism in the empire’s newest clothes. It is (we are) racism in institutional form.”

Villanueva continues, “My central argument is that what ails philanthropy at its core is colonialism. Almost without exception, funders reinforce the colonial division of Us vs. Them, Haves vs. Have Nots, and mostly white saviors and white experts vs. poor, needy, urban, disadvantaged, marginalized, at-risk people (take your pick of euphemisms for people of color) … Philanthropy is the savior mentality in institutional form, which instead of helping — its ostentatiously proclaimed intent — actually further divides and destabilizes society.”

Giridharadas also comes from the world of foundations and thought leaders, acknowledging that “there is almost no problem probed in this book, no myth, no cloud of self-serving justification that I haven’t found a way of being part of, whether because of naivete, cynicism, nationalization, ignorance, or the necessity to make a living.” He opens his book with a critical examination of the “winners” themselves:

“Those at greatest risk of being resented in an age of inequality are thereby recast as our saviors from an age of inequality … Yet we are left with the inescapable fact that in the very era in which these elites have done so much to help, they have continued to hoard the overwhelming share of progress, the average American’s life scarcely improved, and virtually all of the nation’s institutions, with the exception of the military, have lost the public’s trust.”

Like me, you may have paused to reflect not only on the amount of wealth ensconced in private foundations, but also on its sources. Oh look — this one made a pile of cash in pharmaceuticals. This one oil, that one cars. And often, when you look beyond the hagiography, you find fortunes made from tobacco, mining, currency manipulation, or even slavery.

Like me, you’ve probably spent a lot more of your time figuring out the right relationships and pitches you’ll need to get a small fraction of the dollars your organization will need, rather than dwell on harder questions about the sources of these funders’ wealth, governance, and investments.

Where the wealth comes from, where the bulk of it is invested, and who gets to decide where the annual payout goes — these are the critical questions raised by all three of these authors and ones that we, collectively, cannot sweep aside.

“The basis of traditional philanthropy,” according to Villanueva, “is to preserve wealth, and that wealth is fundamentally money that’s been twice stolen, once through the colonial-style exploitation of natural resources and cheap labor, and the second time through tax evasion. Mostly white saviors and experts use this hoarded wealth to dominate and control — obviously or subtly — the seekers and recipients of those funds.”

Foundations are run by the winners (“house slaves” and “overseers” in Villanueva’s terms) who together with self-appointed thought-leaders inhabit MarketWorld (Giridharadas’ term for the in vogue “do well by doing good” brand of neoliberalism) and its centrifugal force of ideas that squeeze out all forms of criticism.

You can see how it could be tough to be on the outside of this elite world, doing the work of social change as “field hands” as Villanueva says, and feel like you can’t risk raising questions for fear of being blacklisted. Colonialism does not trifle with dissent.

Giridharadas shares several fascinating stories of people who inhabit MarketWorld, reluctantly or blindly. He says, “There is no discounting the audacity of this MarketWorld idea. It rejects the notion that there are different social classes with different interests who must fight for their needs and rights. Instead, we get what we deserve through marketplace arrangements — whether fantasy football to help African orphans or office software to make everyone more productive or the sale of toothpaste to the poor in ways that increase shareholder value. This win-win doctrine took on a great deal more than Adam Smith ever had, in claiming that the winners were specially qualified to look after the losers. But what do they have to show for their efforts, given that the age of win-win is also, across much of the West, the age of historic, gaping inequality?”

Herein lies the rub. Are our democracy and society better off with foundations, or without them? After a disciplined walk through philosophical arguments for and against modern philanthropy, Reich asks, “But why, in a democracy, should the size of one’s wallet give one a greater say in the public good and public policy? Why should this plutocratic voice be subsidized by the public? And why should democracy allow this voice to extend across generations in the form of tax-protected assets?”

Reich lands on the conviction that a democratic society cannot abide permanent foundations. He believes they should exist for their founders’ lifetimes, and perhaps a short time thereafter, not in perpetuity. Rather than calling for abolishing the very idea of foundations as institutional philanthropy, he finds two important purposes for their existence in a democratic society: pluralism and innovation.

Reich continues, “Powered by the idiosyncratic preferences of their donors and free from the accountability logic of the market and democratic state, foundations can help to provide, in the aggregate, a welcome pluralism of public goods that, over time, helps to create an ever evolving, contestatory, and diverse arena of civil society. Such decentralization tempers government orthodoxy in a democracy… Foundations can supply more than the financial fuel for a pluralistic associational life. They can also stimulate innovation. Here the idea is that foundations serve as a democratic society’s ‘risk capital,’ a potent discovery mechanism for experimentation in social policy with uncertain results over a long-time horizon.”

Reich agrees with Villanueva that the most appropriate role for philanthropy is reparative. “The appropriate understanding of philanthropy under these circumstances is that it should serve reparative aims, to redress the background wrongs of the unjust system that produced the unfair distribution of resources in the first place.”

Villanueva takes a sharper tack on this, with an explicit call for reparations. He says, “Using money as medicine in its most powerful, direct form, means we use it to heal the racial wealth gap. Decolonizing wealth is, at its essence, about closing the racial wealth gap. Poverty is the product of public policy and theft, facilitated by white supremacy.”

He states that reparations are “the most powerful commitment that can be made to decolonizing wealth and healing our country. Reparations are the ultimate way to build power in exploited communities. They are the ultimate way to use money as medicine… Money, used as medicine, can help us decolonize.”

Villanueva believes in healing, and he lays out seven steps to healing that structure Decolonizing Wealth. The steps are:

1. Grieve: We have to stop and feel the hurts we’ve endured.
2. Apologize: We must apologize for the hurts we’ve caused.
3. Listen: We must acknowledge the wisdom of those excluded and exploited by the system, who possess exactly the perspective and wisdom needed to fix it.
4. Relate: We need space to share our whole selves with each other and understand we don’t have to agree in order to respect each other.
5. Represent: We must build whole new decision-making tables, rather than setting token places at the colonial tables as an afterthought.
6. Invest: We need to put ALL our money where our values are.
7. Repair: We must use money to heal where people are hurting, and stop more hurting from happening.

And in a democracy, or at least a society that aspires to democratic ideals, who gets to decide these things? Giridharadas goes deep into how shocked MarketWorld was to rising right-wing populism, “What people were rejecting in the United States, Britain, Hungary and elsewhere was, in their view, rule by global elites who put the pursuit of profit above the needs of their neighbors and fellow citizens … There was a total refusal to accept that angry people were actively, concertedly trying to tell their fellow citizens something, however flawed.”

The self-reinforcing nature of MarketWorld — along with colonization and white supremacy as Villanueva centers in the conversation — cannot be underestimated. Together they shape every facet of philanthropy today, especially who is in and who is out, along with their ideas.

With the prodding of these authors, I am rethinking many of the assumptions I have held about philanthropy and how I am complicit with this system. As a grant-seeker, I have sat through too many meetings with foundation staff where I was afraid to challenge people and ideas because my current and future funding might be at risk. As a white man, I have to take responsibility for my complicit role in this system, for as Villanueva says, “You have to grapple with the messiness of the privilege. You have to come and collect your people.” This is tough, challenging, and unavoidable. And grieving this, along with apologizing, are just the two first steps (and they don’t abrogate the need to repair and heal).

Giridharadas is also clear: “For the inescapable answer to the overwhelming question — Where do we go from here? — is: somewhere other than where we have been going, led by people other than the people who have been leading us.”

Here is one powerfully democratic direction toward which we can move. “All of us who have been forced to the margins are the very ones who harbor the best solutions for healing, progress, and peace, by virtue of our outsider perspectives and resilience,” says Villanueva. The opposite approach, with which we are all too familiar, hasn’t worked.

Giridharadas locates this same sentiment as central to democracy, “To put it another way, if you are trying to shape the world for the better, you are engaging in a political act — which raises the question of whether you are employing an appropriately political process to guide the shaping.”

Taken together, the solutions proposed by all three authors show that we’re not lacking in ideas on how to reform modern philanthropy and private foundations. It’s a question of political will and public demands.

Could foundations have a more limited life and clearer purpose, as Reich recommends? Yes. Could they be majority governed and staffed by the people closest to the problems being solved as Villanueva imagines? Yes. Could we stop looking to the winners for solutions, and start talking about structural solutions to problems and how to deal with the perpetrators as Giridharadas believes? For sure.

To be perfectly honest, these books are a public service to philanthropists and grant-seekers, and I hope people accept them as such. These books are best read together, as they complement each other: one picks up where the others leave off or miss the mark.

Together they weave an intricate historical portrait of both philanthropy and the MarketWorld which all too often defines it. Wise members of both might listen up and find cause for reform, before the pitchforks come for them, too.

Books Discussed:

Villanueva, E. (2018) Decolonizing Wealth: Indigenous Wisdom to Heal Divides and Restore Balance. Oakland, CA: Berrett-Koehler Publishers.

Reich, R. (2018) Just Giving: Why Philanthropy Is Failing Democracy and How it Can Do Better. Princeton, NJ: Princeton University Press.

Giridharadas, A. (2018) Winners Take All: The Elite Charade of Changing the World. New York, NY: Knopf.

First published in Social Policy Magazine, Spring 2019, Volume 49, Number 1.