According to the political headlines, the left-right divide in the United States has slowly been blurring, particularly over the past few months. Republican candidate Dave Brat, who toppled Majority Leader Eric Cantor in the primary, is on a warpath against “crony capitalism.” Ninety miles north on Capitol Hill, Majority Leader-elect Kevin McCarthy and Chairman Jeb Hensarling of the House Committee on Financial Services have joined together against the likely reauthorization of the Export-Import Bank, calling it “corporate welfare.” Brat sounds a bit like Senator Elizabeth Warren, no? And McCarthy and Hensarling are all of a sudden in lockstep with “self-described democratic socialist” Senator Bernie Sanders? Interesting.
Within the world of philanthropy, a parallel discussion has facilitated similar realignments. This particular iteration of a fairly common critique against “big, politically connected, philanthropy” was brought about by a Howard Husock article, “From Crony Capitalism to Crony Philanthropy?” published last week by Forbes. Husock, vice president for policy research at the conservative Manhattan Institute, defines “crony philanthropy” as “corporate philanthropic donations made to funds or causes designated or directed by elected officials.” The rest of his article includes three cases studies as examples of this type of behavior: UBS donations to President Obama’s “My Brother’s Keeper” initiative, the JP Morgan Chase Foundation’s involvement with the White House Social Innovation Fund, and a plethora of corporate participation in The Mayor’s Fund to Advance the City of New York.
Although Husock’s thesis lacks originality, his message undoubtedly bears repeating. Précising his own work, Husock concludes:
Historically, the non-profit, charitably-supported independent sector has recognized and addressed problems which government has failed to recognize—or failed to address effectively. To the extent which government directs philanthropy, we are at risk of compromising its originality and creativity. Historically, government, business and philanthropy in the United States have operated independently of each other. It is not obvious that that should change.
Husock, sounding as a philanthropically minded Dave Brat, certainly represents the “conservative” turn against cronyism. (Put in more specific terms, “conservative” in this case meaning the right of center that has been historically entangled with Big Business. Although, admittedly, a mere glance at Hillary Clinton’s financial disclosures weakens this oversimplified categorization.)
Adding to this conversation, Rick Cohen over at Nonprofit Quarterly agreed with Husock, but reminds readers that Husock’s argument is not novel: Nonprofit Quarterly has “raised this concern for years.” Cohen goes on:
Nonprofit Quarterly has long condemned the overly enthusiastic willingness of philanthropic institutions—private foundations in many cases—to get so close to government officials that they sacrifice some of their ability to stand apart from government and provide effective support for the watchdogs that should be examining and criticizing government for what it should be doing better and more of. It is doubly a concern when the philanthropy is from corporate donors, whose strategic objectives may be much less philanthropic and much more corporate in their motivations and expectations.
In this assessment, Cohen is right: it is certainly a concern when seemingly charitable objectives are potentially clouded by unbridled, corporate self-interest. Additionally, it is important to note that this crony philanthropy happens on both sides of the aisle. Just like the alleged “corporate welfare” of the Export-Import Bank, partisan affiliation does not neatly sort those criticizing or benefiting from crony philanthropy.
In a post-Citizens United political climate with limited financial disclosures, voters should exercise healthy skepticism: Is your senator voting with her or his conscience or wallet?
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