Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Illustration: Aïda Amer/Axios
If charity is giving alms to the needy, then philanthropy is charity's more high-minded and strategic relation.
The big picture: Philanthropists don't want to give a man a fish; instead they want to take credit for building a proof-of-concept that will persuade governments around the world to invest in large-scale programs of fishing pedagogy.
As Michael Bloomberg puts it: “It’s philanthropy’s job to take risks — and government’s job to scale solutions.”
- Philanthropy is a central part of how the very rich turn their money into power. The extremely rich, by their nature, tend to be extremely ambitious: They want to change the world in certain ways, and are happy to use their wealth to do so.
- That's sparked a backlash from anti-plutocrat gadflies like Anand Giridharadas. Extreme wealth creation has spurred giving among the nouveau riche, which in turn has conflated philanthropy and inequality in the public's mind.
- Trump's tax cuts have removed philanthropic incentives for many Americans. That's because the standard deduction is so large that the middle class no longer sees any benefit from itemizing charitable deductions.
Philanthropy is increasingly looking to supplant or replace government.
- Swiss bank UBS, in its fifth annual report on billionaires, says that many "are seeking new ways to engineer far-reaching environmental and social change."
- Within our lifetime, we will see “the reemergence of a benevolent aristocracy," UBS's head of Ultra High Net Worth, Josef Stadler, told Forbes.
How it works: Individuals like Charles Koch, Mike Bloomberg and Bill Gates use their philanthropies to advocate for societal changes and interventions that they would like to see enacted by governments. Often they engage in explicit lobbying, and often that lobbying is successful, both domestically and internationally.
- Older philanthropies may no longer be controlled by their founders, but care just as much about changing global public policy. The Ford Foundation, for instance, has focused on combating inequality around the world — something that can only be done if it gets governments on board.
What they're saying:
Foundations are an unaccountable, nontransparent, perpetual, and lavishly tax-advantaged exercise of power."— Rob Reich, Stanford University
Why it matters: Politicians are accountable to the electorate. Charitable foundations and the billionaires who fund them, on the other hand, are accountable to no one. As Reich says, their actions therefore deserve more scrutiny than gratitude.
The bottom line: Insofar as philanthropy has a positive effect, it does so via deeply undemocratic means.
Go deeper:
- What Michael Bloomberg's philanthropy says about Michael Bloomberg
- Ranking countries by how much of their GDP is held by philanthropies
- "Giving Circles," which pool money for a cause, are on the rise
- For space billionaires, their companies are their gift
- Donor-advised funds: A tax break now, money for charity later
- Silicon Valley's brand of philanthropy