{"id":19006,"date":"2013-08-23T20:54:05","date_gmt":"2013-08-24T00:54:05","guid":{"rendered":"http:\/\/theredphoenixapl.org\/?p=19006"},"modified":"2013-08-23T20:54:05","modified_gmt":"2013-08-24T00:54:05","slug":"how-billionaire-philanthropy-is-fueling-inequality-and-helping-to-destroy-the-country","status":"publish","type":"post","link":"https:\/\/redphoenix.news\/es\/2013\/08\/how-billionaire-philanthropy-is-fueling-inequality-and-helping-to-destroy-the-country\/","title":{"rendered":"How Billionaire ‘Philanthropy’ Is Fueling Inequality and Helping To Destroy the Country"},"content":{"rendered":"

\"33890425-Gates_Intro_Slide.600x400\"<\/a><\/p>\n

Much of philanthropy today has become a weapon in the class warfare of the 1 percent.<\/em><\/strong><\/span><\/p>\n

Peter Buffett, the second son of billionaire investor Warren Buffett, worries that the state of philanthropy in America \u201cjust keeps the existing structure of inequality in place.\u201d At meetings of charitable foundations, he says \u201cyou witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left.\u201d<\/span><\/p>\n

Describing the stunning growth of what he calls a \u201ccharitable-industrial complex,\u201d his recent New York Times op-ed reads in<\/span>\u00a0confessional style<\/span><\/a><\/span>: \u201cPeople (including me) who had very little knowledge of a particular place would think that they could solve a local problem.\u201d<\/span><\/p>\n

An insider\u2019s critique from someone like Peter Buffett is certainly welcome. Charitable giving, after all, has seen a meteoric rise in recent years, virtually unchanged amid a historic global recession. In what the National Committee for Responsive Philanthropy calls a<\/span>\u00a0\u201cNew Gilded Age of Philanthropy,\u201d<\/span><\/a><\/span>\u00a0the ballooning fortunes of the 1% seem to mirror levels of giving by foundations:<\/span><\/p>\n

\"GraphPhilanthropy\"<\/a><\/p>\n

(Source:\u00a0<\/span>National Committee for Responsive Philanthropy<\/span><\/a><\/span><\/em>)<\/span><\/p>\n

As Buffett suggests, this growth in elite largesse, totaling<\/span>\u00a0$316 billion<\/span><\/a><\/span>\u00a0in 2012, has done little to combat economic inequality. But the problem isn\u2019t just one of ineffectiveness. A<\/span>\u00a0recent paper<\/span><\/a><\/span>\u00a0published in the Journal of Economic Inequality shows philanthropy hasn\u2019t simply failed to meet its goals; it\u2019s made the situation worse.<\/span><\/p>\n

“Using measures of both absolute and relative inequality,\u201d the study\u2019s authors conclude, \u201cwe have shown that philanthropy may actually exacerbate inequality, instead of reducing it.\u201d<\/span><\/p>\n

It\u2019s hard to believe that all the industrial titans and Wall Street tycoons shelling out billions on charitable projects don\u2019t understand this. They spend their lives swimming in numbers. What, then, might their real goals be? A closer look at how the world\u2019s wealthiest are choosing to give away their money provides clues. While pretending to fix inequality, contemporary philanthropy\u2019s actual role has been to strengthen the arrangements that make gross inequality possible in the first place. It has become a weapon in the class warfare of the 1%, the carrot to win people over to their ideology complementing the stick of political spending to coerce them into the same.<\/span><\/p>\n

The Koch brothers<\/strong><\/span><\/p>\n

David and Charles Koch, together worth<\/span>\u00a0$35 billion<\/span><\/a><\/span>, have perfected this philanthropic misanthropy perhaps better than anyone else. Their Kansas-based Koch Industries is the second largest private company in the country after Cargill, with annual revenues estimated to surpass<\/span>\u00a0$100 billion<\/span><\/a><\/span>. Together<\/span>\u00a0they control<\/span><\/a><\/span>\u00a0thousands of miles of oil pipelines from Alaska to Texas; fertilizers, minerals and biofuels; Brawny paper towels, Dixie cups and Lycra.<\/span><\/p>\n

A research team at<\/span>\u00a0American University<\/span><\/a><\/span>\u00a0found that from 2007 to 2011, Koch foundations gave $41.2 million to 89 nonprofits and sponsored an annual libertarian conference. The report details how Koch Industries\u2019 $53.9 million federal and state lobbying budget routinely goes hand-in-glove with Koch-affiliated nonprofits\u2019 \u201cpublic advocacy\u201d for reasons having little to do with the public and everything to do with the brothers\u2019 sprawling business interests. Koch lobbyists advocate for bills like the Energy Tax Prevention Act \u2014 which sought to roll back the Supreme Court ruling allowing EPA regulation of greenhouse gases \u2014 that are then supported in congressional testimony by \u201cexperts\u201d from Koch-funded nonprofits.<\/span><\/p>\n

Though private foundations cannot legally \u201cbe organized or operated for the benefit of private interests,\u201d the study\u2019s authors note that IRS enforcement is largely \u201csporadic and somewhat mysterious,\u201d and even in the case of an investigation communications between the foundation and the government are generally kept from the public. The Koch nonprofit machine has exploited this loophole for all it\u2019s worth, testifying before congressional committees at least 49 times since 2007.<\/span><\/p>\n

For decades, Koch philanthropy has also waged ideological warfare within U.S. universities, contributing over $30 million to 221 universities since just 2011. Here, the payoff couldn\u2019t be plainer. A 2012 report in Academe documented the<\/span>\u00a0Koch-funded coup<\/span><\/a><\/span>\u00a0in Florida State University\u2019s economics department, showing how \u201cin exchange for his \u2018gift,\u2019 the donor got to assign specific readings, select speakers brought to campus and instruct them with regard to the focus of their lectures, shape the curriculum with new courses and specify the number of students in the courses, name the program\u2019s director, and initiate a student club.\u201d<\/span><\/p>\n

The Charles G. Koch Foundation gave FSU $1.5 million to sponsor two assistant professors, fund fellowships and shape curricula promoting free-enterprise doctrine. It then created an advisory board to distribute money to faculty and ensure their work aligned with the foundation\u2019s ideology.<\/span><\/p>\n

The Kochs have tapped many useful allies, academic and non, in their collegiate ploys. A year before the FSU story,<\/span>\u00a0Inside Higher Ed<\/span><\/a><\/span>\u00a0exposed how administrators at Clemson University cultivated the Koch Foundation to build its \u201cInstitute for the Study of Capitalism,\u201d receiving $1 million for the effort. BB&T, the financial institution whose former chairman and CEO John Allison heads the Koch-backed Cato Institute, regularly pays universities to chair favorable professors, typically in economics. Cooperative institutions are rewarded with Koch dollars as a bonus. American University\u2019s Investigative Reporting Workshop found 10 such universities, where BB&T-chaired professors coincided with Koch cashflow.<\/span><\/p>\n

Art Pope<\/strong><\/span><\/p>\n

James \u201cArt\u201d Pope, a founding board member of the Kochs\u2019 conservative advocacy group Americans for Prosperity, took the brothers\u2019 brand of charitable devastation and concentrated it at the state level. He is, as the New Yorker\u2019s Jane Meyer<\/span>\u00a0put it<\/span><\/a><\/span>, the \u201cconservative multimillionaire [who] has taken control in North Carolina,\u201d a discount retail baron that has used his unrivaled influence as the state\u2019s<\/span>\u00a0single largest political donor<\/span><\/a><\/span>\u00a0to<\/span>\u00a0literally buy his way into office<\/span><\/a><\/span>. While his network of conservative foundations continues steering the debate rightward, Pope puts policies in motion as the state\u2019s deputy budget director.<\/span><\/p>\n

The<\/span>\u00a0Institute for Southern Studies<\/span><\/a><\/span>\u00a0has extensively documented how Pope uses his family nonprofit \u2014 the John William Pope Foundation, worth nearly<\/span>\u00a0$150 million<\/span><\/a><\/span>\u00a0\u2014 to pour tax-exempt donations into thinly veiled conservative advocacy groups like the John W. Pope Civitas Institute, the John Locke Foundation and the Pope Center for Higher Education Policy. Over the years, these groups have worked closely with<\/span>\u00a0Tea Party organizers<\/span><\/a><\/span>, attacked<\/span>\u00a0climate science<\/span><\/a><\/span>\u00a0(and<\/span>\u00a0scientists<\/span><\/a><\/span>) and generally championed free market principles.<\/span><\/p>\n

Pope\u2019s is an impressive empire of shell charities: his foundation spends more than two-thirds of its money providing some<\/span>\u00a090%<\/span><\/a><\/span>\u00a0of the funding for North Carolina\u2019s leading conservative organizations, at most of which he enjoys a leadership role. In 2010, three of these groups \u2014 Civitas Action, Real Jobs NC and Americans for Prosperity \u2014 banded together with Pope and his family to<\/span>\u00a0flood<\/span><\/a><\/span>\u00a0North Carolina\u2019s legislative races and stage the first Republican takeover of the state<\/span>\u00a0since 1896<\/span><\/a><\/span>.<\/span><\/p>\n

Since then, Pope\u2019s puppeteering has pushed North Carolina into free-fall, galvanizing the grassroots,<\/span>\u00a0Moral Monday<\/span><\/a><\/span>\u00a0opposition that\u2019s<\/span>\u00a0spreading across the country<\/span><\/a><\/span>. Policies long advocated by Pope foundations are now proposed and enacted on a daily basis, seeking to<\/span>\u00a0eliminate corporate and income taxes<\/span><\/a>,<\/span>\u00a0shrink healthcare coverage<\/span><\/a><\/span>,<\/span>\u00a0gut environmental regulations<\/span><\/a><\/span>,<\/span>\u00a0remove early education opportunities<\/span><\/a><\/span>,<\/span>\u00a0oppose public transit<\/span><\/a><\/span>\u00a0and\u00a0defund public schools<\/span><\/a><\/span>\u00a0and<\/span>\u00a0higher education<\/span><\/a><\/span>.<\/span><\/p>\n

It\u2019s this last foray that student groups like the<\/span>\u00a0North Carolina Student Power Union<\/span><\/a><\/span>\u00a0are fiercely resisting, mounting a statewide campaign against Art Pope\u2019s involvement in the University of North Carolina system. In exchange for his foundation\u2019s more than two dozen grants over the past 15 years, last year Pope<\/span>\u00a0was rewarded<\/span><\/a><\/span>\u00a0with a seat on UNC\u2019s \u201cblue ribbon\u201d panel to craft a five-year strategic plan for the 16-campus system. Students claim the move defies UNC\u2019s mandate for public accountability, reeking of blatant corruption.<\/span><\/p>\n

Pope is hardly an educator, and<\/span>\u00a0his gifts<\/span><\/a><\/span>\u00a0demonstrate a Koch-like determination to indoctrinate college students at any cost, bidding to bring them into the fold while they\u2019re young. His past contributions include $900,000 for<\/span>\u00a0pro-free market political science program<\/span><\/a><\/span>\u00a0at North Carolina State University; an attempted<\/span>\u00a0$10 million<\/span><\/a><\/span>\u00a0for a UNC program in \u201cWestern civilization,\u201d later diverted to football coaches\u2019 salaries after widespread outcry; and a similarly ill-fated $600,000 attempt to launch a<\/span>\u00a0constitutional law center<\/span><\/a><\/span>\u00a0led by the director of a Pope-funded nonprofit at North Carolina Central University.<\/span><\/p>\n

Bill and Melinda Gates<\/strong><\/span><\/p>\n

But it\u2019s not just rightwing demagogues<\/span>\u00a0who have<\/span><\/a><\/span>\u00a0\u201cdrank all the Tea Party they could drink and sniffed all the Koch they could sniff\u201d using charity to further their political agenda. Bill and Melinda Gates\u2019 own liberal-leaning,<\/span>\u00a0$36.4 billion<\/span><\/a><\/span>\u00a0charitable foundation, by far the world\u2019s largest, has long been scrutinized for attempting to fix with one hand the problems it creates with another. In 2007,<\/span>\u00a0the Los Angeles Times<\/span><\/a><\/span>\u00a0uncovered \u201chundreds of Gates Foundation investments \u2014 totaling at least $8.7 billion, or 41% of its assets\u2026 in companies that countered the foundation\u2019s charitable goals or socially concerned philosophy.\u201d<\/span><\/p>\n

These included endowment holdings in top polluters like ConocoPhillips and Dow Chemical Co., oil refineries and paper mills that sicken the children whose parents the foundation treats for AIDS, and \u201cpharmaceutical companies that price drugs beyond the reach of AIDS patients the foundation is trying to treat.\u201d<\/span><\/p>\n

The Gates Foundation\u2019s dealings with lifesaving drugs in particular showcase the contradictions of today\u2019s<\/span>\u00a0philanthrocapitalism.<\/span><\/span><\/a><\/span><\/p>\n

Although leading<\/span>\u00a0global health campaigners<\/span><\/a><\/span>\u00a0want an end to Big Pharma\u2019s monopoly drug patents to increase affordability in poorer countries, the Gates Foundation opposes any changes to existing intellectual property law. Advocates for loosening IP regulations point out that doing so would both lower prices by encouraging generic competition and enable innovation outside of patent-hoarding companies. This proposal, however, threatens multinational pharmaceutical corporations,<\/span>\u00a0well-represented<\/span><\/a><\/span>\u00a0among foundation leadership, as well as monopolistic firms like Microsoft, which as late as 2007 was lobbying the G8 to tighten global intellectual property protection \u2014 a move Oxfam has\u00a0<\/span>consistently warned<\/span><\/a><\/span>\u00a0spells disaster for the health crisis in the Global South.<\/span><\/p>\n

The\u00a0Times<\/em>report traces the effects of this position on the ground, quoting<\/span>\u00a0an intellectual property expert<\/span><\/a><\/span>\u00a0who claims the foundation\u2019s stance makes \u201cmedicines available only to a narrow spectrum of a rich elite in a developing country\u201d in a form of \u201cpharmaceutical apartheid.\u201d As millions of impoverished AIDS and HIV patients are priced out of the market, lucrative patents allow the world\u2019s top 10 drug companies to collect some $80 billion in profit annually. And Gates sure won\u2019t stop them.<\/span><\/p>\n

Boards of broken trust<\/strong><\/span><\/p>\n

The overtures by Art Pope and the Kochs show how the American university itself has lately emerged as a hub of misanthrope philanthropy, offering both opportunities for long-term indoctrination as well as short-term plunder. A 2010<\/span>\u00a0Chronicle of Higher Education study<\/span><\/a><\/span>\u00a0found that boards of trustees, many composed of top university donors tasked with making decisions that \u201cprofoundly affect everyone on the campus,\u201d frequently conduct business with trustee-affiliated companies. According to the Chronicle, one in four boards at private colleges have such financial ties, signing contracts involving \u201cbanks, law firms, construction companies, and insurance conglomerates\u201d linked to trustees. And the trend is accelerating, with 58% of colleges (64% among private institutions) now allowing business relationships with trustees, as opposed to 46% just two years ago.<\/span><\/p>\n

These sorts of boardroom entanglements have led universities into profoundly embarrassing situations, like<\/span>\u00a0the fallout at Dartmouth<\/span><\/a><\/span>\u00a0after the 2008 financial crisis. As Todd Zywicki, a former Dartmouth trustee, later wrote, \u201cThe large contributions that were their ticket on to the board were functionally a mere downpayment for the fees that<\/span>\u00a0they would later receive for managing<\/span><\/a><\/span>\u00a0half a billion dollars of Dartmouth\u2019s endowment,\u201d 14% of which was at one point invested in trustee-affiliated hedge funds and private equity. By 2009, Dartmouth\u2019s Wall Street-heavy board had packed 67.5% of its endowment into risky instruments, ending in a catastrophic crash that<\/span>\u00a0deepened the university\u2019s debt and forced its credit downgrading<\/span><\/a><\/span>.<\/span><\/p>\n

Kenneth Langone, the<\/span>\u00a0$1.1 billion investor<\/span><\/a><\/span>\u00a0who founded Home Depot, recently made headlines for similarly capitalizing on his neatly purchased trustee appointment. His $200 million donation to NYU\u2019s medical center, the largest in the institution\u2019s history, earned him the renaming of the facility (it\u2019s now the<\/span>\u00a0Langone Medical Center<\/span><\/a><\/span>) along with what is now the Stern School of Business\u2019s Langone Part-Time MBA. Also part of the deal was his appointment as vice co-chair of NYU and its medical center\u2019s<\/span>\u00a0board of trustees<\/span><\/a><\/span>, a position he<\/span>\u00a0abused in July<\/span><\/a><\/span>\u00a0to email staff about donating to the reelection campaigns of his favorite (very corporate-friendly) members of Congress. Coming as the \u201cmedical school clamps down increasingly on salaries and tenure,\u201d employees reported feeling threatened and pressured to follow through.<\/span><\/p>\n

More broadly, the Langone board at NYU has produced a string of<\/span>\u00a0harshly condemned decisions<\/span><\/a><\/span>\u00a0that in many ways encapsulate the world his brand of giving is working to create. It\u2019s a closed circle of wealth, where money flows between toward massive<\/span>\u00a0expansion projects<\/span><\/a><\/span>\u00a0and<\/span>\u00a0<\/span>million-dollar payouts<\/span><\/a><\/span>\u00a0for star staff\u2019s condominiums while<\/span>\u00a0NYU students<\/span><\/a><\/span>, among the nation\u2019s most indebted, are left in the dust.<\/span><\/p>\n

The change we need<\/strong><\/span><\/p>\n

For all its failures, today\u2019s philanthropy continues to succeed as a form of self-therapy for the world\u2019s rich. The philanthropic elite have won out in a not-so-pretty world of entrenched and widening inequality, and their charitable giving helps hide the ugly truth of the situation \u2014 from us as well as themselves. Ruinously for us, though, the ways in which our misanthrope philanthropists contribute are significantly deepening the crisis at hand.<\/span><\/p>\n

Of course, there are occasional flickers of light that emerge from the nonprofit world. Foundations like Marian Wright Edelman\u2019s<\/span>\u00a0Children\u2019s Defense Fund<\/span><\/a><\/span>, growing out of Martin Luther King, Jr.\u2019s Poor People\u2019s Campaign to advocate for working-class families, and the new<\/span>\u00a0International Organization for a Participatory Society<\/span><\/a><\/span>, seeking to build a bottom-up, classless global society, work for the poor and powerless in important ways. Still, trapped in the logic of competing cashflows, these groups are overshadowed by their misanthropic counterparts.<\/span><\/p>\n

To echo Peter Buffett\u2019s call, what we need is \u201csystemic change\u2026 built from the ground up.\u201d No more scraps from the rich kids\u2019 table. The idiosyncratic, undemocratic \u201cgiving back\u201d of the world\u2019s wealthiest in the end gives to nobody but themselves,<\/span>\u00a0some<\/span><\/a><\/span>\u00a0more brazenly than others. As philanthropy analyst Michael Edwards asks: \u201cWould philanthrocapitalism have helped fund the civil rights movement in the US? I hope so, but it wasn\u2019t \u2018data driven,\u2019 it didn\u2019t operate through competition, it couldn\u2019t generate much revenue, and it didn\u2019t measure its impact in terms of the numbers of people who were served each day. Yet it changed the world forever.\u201d<\/span><\/p>\n

We\u2019re all still waiting for the change we really need, not the kind dropped from swollen pockets.<\/span><\/p>\n

Source<\/span><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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