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Opinion: Op-Eds

Philanthropy is under fire even as private giving increases

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Op-Eds,Taxes,AmeriCorps

The report by the Chronicle of Philanthropy that the top 10 philanthropic gifts in the year past totaled $3.4 billion, and that there were more gifts of $100 million or more in 2013 (15) than in 2012 (11), serves as a reminder of American generosity.

Indeed, U.S. charitable gifts total twice as large a percentage of gross domestic product (2.2 percent) as the next-closest country (the United Kingdom, 1.1 percent.)

But a review of the big-ticket gifts — which are just a small portion of the more than $300 billion in overall household and corporate charitable giving — reminds us that American philanthropy is not just significant for its magnitude.

It is also independent, meaning that it is directed in thoughtful, personal ways by individuals, with their own interests and enthusiasms, not — at least not yet — directed by government.

That may be changing in ways that should concern us and which are the focus of my recent book, Philanthropy Under Fire.

Before considering that threat, however, it’s important to appreciate the present. The largest philanthropic gifts of 2013 are notable for their variety. Nike founder Phil Knight pledged $500 million for cancer research (to the Oregon Health and Science University Foundation).

In contrast, Mark Zuckerberg -- who'd previously donated $100 million to help public schools in disadvantaged Newark, N.J. -- donated Facebook shares valued at $990 million to the Silicon Valley Community Foundation, meaning the funds will help an array of local causes and groups.

Michael Bloomberg's $350 million pledge to Johns Hopkins University will focus, in part, on student financial aid. Big gifts based on new ideas can lead to breakthroughs, witness Paypal founder Peter Thiel's 2010 decision to support promising entrepreneurs who agree to drop out of college. Thiel sparked national reflection on the role and value of higher education.

That sort of variety is what we see when donors are left to their own devices. One can think of the $300 billion in charitable giving, which, as a percentage of GDP, is more than double that of any other country, in part as a sort of national venture philanthropy fund.

This good news must be tempered, however, with threats on the horizon to philanthropic independence. Increasingly, charitable donations’ tax deduction status has led to the view that government should influence philanthropic funds.

California Democratic Rep. Xavier Becerra, for instance, has asserted that “only one in 10 [charitable] dollars are serving poor or disadvantaged people. I have to wonder where the other nine dollars are going.”

And Aaron Dorfman of the National Committee for Responsive Philanthropy has branded the charitable deduction a “subsidy” — and implicitly raises the question of whether it should be reserved for “social justice philanthropy.”

So it is that philanthropic independence could fall victim to narrow views about what helps the neediest. We already see government direction of another key part of America’s charitable tradition: the time citizens give as volunteers.

Through its AmeriCorps program, the Corporation for National and Community Service offers annual stipends to “volunteers” at designated nonprofits, effectively favoring some nonprofit causes and purposes over others.

For instance, in a request for proposals from organizations seeking AmeriCorps labor, the New York State Office of National and Community Service gives priority “to increasing the participation of individuals from historically under-represented populations. … resource-poor communities … and communities with high poverty rates.”

The worldview represented by Dorfman and Becerra is that charitable giving (whether dollars or labor) should seek to address inequality and current disadvantage.

Such giving can be laudable and effective, but should not be seen as more valuable than the sorts of imaginative and idiosyncratic giving in which much philanthropy is engaged. Indeed, if Thiel’s efforts to support research to prevent an asteroid strike of Earth are successful, the poor, as well as the rich, will benefit.

Combined federal, state and local government spending in the United States will exceed $6 trillion this year. Philanthropic giving, comparatively, totals less than five percent of that total.

Let's hew to our traditional understanding of philanthropic independence and trust its donors to know what's best.

Howard Husock is a contributing editor of City Journal and director of the Manhattan Institute's Social Entrepreneurship Initiative. His "Philanthropy Under Fire" is available from Encounter Books in its Broadsides series.
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