Recently The Nation hosted a symposium on “The Future of Philanthropy,” featuring contributions from top non-profit leaders and innovators. The collection of short essays is worth reading, if only for the snapshot insight it provides into the minds of some of philanthropy’s top players.
Of particular interest were Jessie Spector’s thoughts on philanthropy and inequality. Spector directs Resource Generation a group that “organizes young people with wealth and class privilege in the U.S. to become transformative leaders working towards the equitable distribution of wealth, land and power.” She’s committed to what she calls “social justice philanthropy,” which aims at systematic wealth redistribution through radical politics.
“I dream of a world in which philanthropy is not only unnecessary, but remembered as a bizarre and unfortunate creation of societies past,” she writes wistfully. This bold new world will be established by the mechanisms of state control. What follows are policy recommendations that range from the conventional (“higher taxes on financial transactions and capital gains, and the closing of loopholes like those currently used for carried interest and offshore accounts”) to the avant-garde (“legally requiring the presence of non wealthy people on foundation boards”).
“[M]ost philanthropic organizations [are] focused on accumulating more wealth for their endowments rather than on putting themselves out of business in the name of ending wealth inequality,” Spector writes. She pointedly highlights some damning facts as evidence of this: Only 14% of annual foundation giving goes towards funding “structural change;” current law only requires an annual payout of 5% for foundations (that rate had been zero before 1969); and philanthropic dollars are spent without any built-in requirement that they reflect or even address the input of those they’re supposed to help. All this reflects the inconvenient truth, according to Spector, that “philanthropy was originally created as a mechanism to keep control in the hands of the wealthy, and it has largely stayed that way.”
This question—of organized philanthropy’s inherited legacy—hangs over the whole Nation symposium like the ghost at the banquet. Another contributor, Daniel Lurie, calls it modern philanthropy’s “existential crisis:” the “fact that the wealth [philanthropy] relies on comes from the same system that perpetuates the problems it aims to solve.” As one way of resolving this paradox, Lurie's organization, which fights poverty in San Francisco, foregoes any endowment, earning and spending all its money each year. This “intentionally hungry model with a quick and complete return to the community” helps keep community-based charities honest, nimble, and responsive.
Surely Spector's noticed something important about Big Philanthropy’s essential conservatism. And as more and more philanthropists and philanthropic institutions buy into the inequality paradigm and adopt the activist goals of their grassroots counterparts, Spector’s manifesto will look more and more like a roadmap.
On the question of philanthropic longevity, for instance, Spector suggests a helpful definitional insight. “Our long-term goal” as philanthropic institutions, she writes, “should be to put ourselves out of business.”
Such an understanding might help structure the thinking of policy-makers trying to work out the purpose and application of tax breaks, say, and the role of charitable regulations more generally. My colleague Martin Wooster wrote in this publication recently about donor-advised funds, which allow for an immediate charitable deduction without the attendant requirement that the fund pay out any particular amount of money in any particular amount of time. Wooster also points out that banks like to sit on the funds for as long as possible, since they collect fees whether or not any charitable payments are made.
Even readers who don’t share Spector’s progressive impulses are forced to admit that her analysis gains traction in cases like this one. Are donor-advised funds really engines of change, or are they merely a convenient place for the rich to park their cash? Is the institutional self-interest that governs most boards ever going to upend systematic injustice, or does it merely keep the lights on at their fancy headquarters for another few years? One need not share Spector’s commitment to radical politics to think that charities ought to work towards their own obsolescence. And her clear impatience with the self-serving delusions of the philanthropic establishment will likely resonate with those of various political stripes.