Being Generous: On American Philanthropy
On average, I receive eight personalised requests for donations a week. I also see many other generic requests daily, through the mail or attached to emails, and websites. It’s not surprising; after all, I am living in the US, a country famous for its philanthropic ethos. Sure, this is a country where some people become rich, very rich, but they give back. America’s commitment to donating for the public good is legendary, an example to the rest of the world. In many cases billions of dollars are spent, from Andrew Carnegie endowing libraries (and church organs), to the Bill and Melinda Gates Foundation funding medical programs, including many aimed at endemic diseases in developing countries, as well as broader educational endeavours.
Choosing where to make a donation is hard. I support education, restricting gun ownership, and public broadcasting. When I worked fulltime, I could do more, donating to a variety of deserving organisations. Now I give somewhat less, but the three I regularly support never leave me alone. On a bad day, I believe that all the money I give is used up in asking me to send more. Am I contributing to marketing salaries rather than the cause I funded? Other organisations to whom I have made the odd donation are similarly relentless. I unsubscribe from emails and other marketing content, but the requests keep coming, and I keep junking begging letters.
I believe my approach is reasonable. I don’t consider myself well off, although compared to many people living in North Carolina I know I am lucky: I have more than they do. I tell myself I worked hard for many years, and deserve the modest retirement income I receive, and I can get occasional work. But what I give plays on my conscience: should I be donating more?
This leads me to talk about Anand Giridharadas. Anand Giridharadas was an Aspen Institute Henry Crown Fellow in 2011. The Aspen Institute is an impressive organisation. Established seventy years ago, its initial focus was on American managers, seen as technically very good at what they did but who had missed out on a liberal education. It introduced a two-week program, reading and debating great thinkers and ideas, and I attended their Executive Seminar in 1992. I found the experience life-changing, and it has informed much of what I have done ever since.
The Aspen Institute has grown past that focussed and relatively humble beginning. Now it is a venue for the great and the good to come together, juggling between activities to develop future leaders and providing a forum for those already at the top. Speakers and participants are both influential and affluent. It claims a “reputation for gathering diverse, nonpartisan thought leaders, creatives, scholars and members of the public to address some of the world’s most complex problems … to provoke, further and improve actions taken in the real world”.
The Henry Crown Fellowship Program was established in 1997 to “develop the next generation of community-spirited leaders, providing them with the tools necessary to meet the challenges of business leadership in the 21st century”. Each year 20-22 leaders are chosen to “engage in a thought-provoking journey of personal exploration”. Selected on the basis they “have already achieved considerable success in the private sector and are at an inflection point in their lives or careers”, the two-year program comprises four seminars and a personal leadership ‘venture’. [i]
In 2015, Anand Giridharadas gave a speech at the Institute’s Action Forum. He was reflecting on the world he saw in which there were very few ‘extreme winners’ and very many ‘extreme losers’. He began by explaining what he called the ‘Aspen Consensus’. “There is no consensus on anything here, as any seminar participant knows. But I believe that many of our discussions operate within what I will call the “Aspen Consensus,” which, like the “Washington Consensus” or “Beijing Consensus,” describes a nest of shared assumptions within which diverse ideas hatch. The “Aspen Consensus” demarcates what we mostly agree not to question, even as we question so much. And though I call it the Aspen Consensus, it is in many ways the prevailing ethic among the winners of our age worldwide, across business, government and even nonprofits. The Aspen Consensus, in a nutshell, is this: the winners of our age must be challenged to do more good. But never, ever tell them to do less harm.” [ii]
He continued: “The Aspen Consensus says, “Give back,” which is of course a compassionate and noble thing. But, amid the $20 million second homes and $4,000 parkas of Aspen, it is gauche to observe that giving back is also a Band-Aid that winners stick onto the system that has privileged them, in the conscious or subconscious hope that it will forestall major surgery to that system — surgery that might threaten their privileges.” Indeed, the last forty years has seen a huge transfer of wealth to the top 1%, aided by government policies and businesses with an unrelenting focus on increased efficiencies, rising stock valuations , and workers with declining real incomes.
However, the real sting in his comments comes from another observation, when he noted the winners are increasingly remote from any community, the increasing globalisation of business separating them from seeing and feeling the effect of their decisions. He reiterates a key point in his address: “We talk a lot here about what we should be doing more of. We don’t talk about what we should be doing less of… So let’s just come out and say the thing you’re never supposed to say in Aspen: that many of the winners of our age are active, vigorous contributors to the problems they bravely seek to solve. And for the greater good to prevail on any number of issues, some people will have to lose — to actually do less harm, and not merely more good.”
Look, I loved his remarks, so I will quote once more: “Ask yourself: Does the world need more food companies donating playgrounds to children, or rather reformed food companies that don’t profit from fattening children? Does the world need more Chinese tycoons engaging in philanthropy in China, or rather more honest and less corrupt Chinese tycoons? Does the world need Goldman Sachs partners mentoring women or giving money to poor kids’ schools, or rather Goldman partners gambling everything to say: the way business is done at my firm isn’t what it should be, and I will fight to make Goldman a steward rather than a vampire squid of resources, even if that costs me my job?”
That talk led Giridharadas to write a book, Winners Take All, one that deserves reading. [iii] It also encouraged a great deal of supportive commentary. [iv] Shortly after it appeared, Robert Reich, a professor of political science at Stanford and a co-director of the university’s Center on Philanthropy and Civil Society, published Just Giving: Why Philanthropy is Failing Democracy and How It Can Do It Better. [v]
His book is packed with some compelling data. Reich begins by noting that for every foundation that existed in 1930 there are now five hundred, and the growth in foundation assets has been from less than a billion dollars to an almost unbelievable eight hundred billion dollars.
Meanwhile, the cost to the government keeps growing. In 2016, tax deductions for charitable contributions were more than fifty billion dollars. What is the justification for this arrangement? Reich considers several possibilities. One is that the government, by encouraging giving to private philanthropies, is fostering participation in civic affairs. This rationale Reich discards, since, if anything, the correlation seems to be negative. “The rise of nonprofit organizations in the United States and the use of the charitable contributions deduction coincides with the decline of civic engagement and associational life,” he observes.
A second possibility is that giving promotes equality. Once again, Reich is skeptical. The deduction for charitable contributions is available only to taxpayers who itemize their returns, and these people tend to be relatively affluent. And the more affluent they are the more the deduction is worth: families in the highest tax brackets get bigger breaks than those in the lowest. How about all the needy families that are being assisted? Here the figures are harder to come by, but, even so, they don’t look very good. A recent study suggests that, at most, a third of all tax-deductible giving goes toward aiding the poor, while the donors receiving the biggest tax breaks are the least likely to be aiding the indigent and the marginalised: Reich cites research suggesting “the inclination to give to help to meet basic needs declines as one rises up the income ladder.”
Instead of promoting equality, Reich suggests tax subsidies for philanthropy may actually be doing the reverse. He cites the example of local-education foundations, or LEFs. These are a form of parent-teacher association set up to supplement public-school budgets, and they’ve grown dramatically in recent years. Some LEFs raise only enough money to buy paint sets or musical instruments, but others, in more affluent districts, raise thousands of dollars a pupil. In one town in California, Reich reports, parents of public-school students get a letter at the start of the year asking for a contribution of twenty-three hundred dollars for each child enrolled, thereby sustaining existing inequities in school funding, and all done with tax-deductible contributions.
As it happens, there is a rather pressing case study right now about companies doing harm. It involves the family that owns Purdue Pharma, the manufacturer of OxyContin, a pain management drug. In case you aren’t aware, I am talking about the Sackler family, which has provided many millions of dollars to such institutions as the Metropolitan Museum of Art, The Guggenheim, the Smithsonian, the Tate Gallery, the Victoria and Albert Museum, the British Museum, the Louvre, Harvard, Oxford and Cambridge universities, and many, many more.
America is currently experiencing an epidemic of deaths from opioid addiction. It is so bad that people on all sides of politics are concerned, (even President Trump). In 2017 some 80,000 deaths were ascribed to drug overdoses, compared to 40,000 in car accidents, and almost exactly the same number from firearm injuries (of which about half were suicides).
Purdue Pharma is a private company, providing the Sackler family with their millions in large part through the manufacture and marketing of OxyContin, a highly effective drug for pain management. More recently other income has come through a newer company (Rhodes) set up to sell generic versions of the drug. OxyContin is a slow release version of Oxycodone, a semi-synthetic opiate (based on a substance derived from opium): the slow release version “is one of the most abused prescription opioids because people can crush it and dissolve it to inject or snort it. The result is a rapid, powerful high because the entire extended-release medicine affects the person at one time.”[vi] Some 15,000 overdose deaths were from semi-synthetic opioids, (with a similar number from heroin, and 30,000 from synthetic opioids, fentanyl the major contributor).
The Sackler Family seems a prime example of a group that does good, but has shown little evidence of doing less harm. It appears Oxycontin has been a source of addiction and abuse for many years. While it is a Food and Drug Administration-approved medication, legitimately used for patients with advanced cancer or short-term severely acute pain, it is also prescribed for patients with chronic pain. Purdue claims it “neither created nor caused the opioid epidemic” and recently stated both the company and its former directors “vigorously deny” claims about their role in the current crisis, stating it “has long been committed to initiatives that prevent abuse and addiction, citing what it characterized as a philanthropic donation from the family to an addiction research and treatment center in Tulsa, Okla. In fact, the $75 million contribution, to be made over five years, was a condition of the court-approved settlement of an opioid lawsuit brought by the Oklahoma Attorney General against Purdue.” [vii] Has it addressed problems with Oxycontin, ensuring less harm, or is it exemplifying the Aspen Consensus?
Making drugs and prescribing drugs: a recent report makes it clear it may be the drug distributors which have been the worst link in the chain. Over time many have given advance warning to pharmacies they might be investigated for filling prescriptions for doctors at clearly suspicious levels, and kept shipping to these pharmacies for years after these concerns had been flagged internally. [viii] As I was writing, one distributor was charged with this kind of behaviour over several years, including supplying opioids at alarming levels since 2012.[ix]
So let me get this straight. If I give some money to a charitable foundation, it appears I am their target for life, as they continue to spend money on hoping to persuade me to give more, at a level of expenditure that must be a close match to my modest contributions. At the same time, while major companies are making significant contributions to foundations, with commensurate tax benefits, the evidence suggests some (much?) of what is being given is not being channelled into programs for the benefit of the broader community as a whole. Rather the endowments often support activities that benefit the privileged. To remind you, in many cases their profits are made possible by containing the cost of a workforce, where real incomes have hardly moved in nearly forty years, and from ensuring customers pay hefty margins added on to the cost of many services and products. They are probably doing some good but there is no doubt several are failing to do less harm. I know I’m naïve, but who exactly is being generous to whom?
[i] https://www.aspeninstitute.org/programs/henry-crown-fellowship/
[ii] https://medium.com/@AnandWrites/the-thriving-world-the-wilting-world-and-you-209ffc24ab90
[iii] Winners Take All, Anand Giridharadas, Knopf, 2018
[iv] Among many, this was an excellent overview: https://www.nytimes.com/2018/08/20/books/review/winners-take-all-anand-giridharadas.html; also Gospels of Giving for the New Gilded Age, Are today’s donor classes solving problems—or creating new ones? Elizabeth Colbert, The New Yorker, August 20, 2018
[v] Princeton University Press, 2018.
[vi] https://www.therecoveryvillage.com/oxycontin-addiction/facts-about-opioids/
[vii] https://www.nytimes.com/2019/04/01/health/sacklers-oxycontin-lawsuits.html
[viii] https://www.nytimes.com/2019/04/22/health/opioids-lawsuits-distributors.html
[ix] https://www.nytimes.com/2019/04/23/nyregion/opioid-crisis-drug-trafficking-rochester.html
