Philanthropy in Democratic Societies History, Institutions, Values
edited by Rob Reich, Chiara Cordelli and Lucy Bernholz
University of Chicago Press, 2016
Cloth: 978-0-226-33550-6 | Paper: 978-0-226-33564-3 | Electronic: 978-0-226-33578-0
DOI: 10.7208/chicago/9780226335780.001.0001
ABOUT THIS BOOKAUTHOR BIOGRAPHYREVIEWSTABLE OF CONTENTS

ABOUT THIS BOOK

Philanthropy is everywhere. In 2013, in the United States alone, some $330 billion was recorded in giving, from large donations by the wealthy all the way down to informal giving circles. We tend to think of philanthropy as unequivocally good, but as the contributors to this book show, philanthropy is also an exercise of power. And like all forms of power, especially in a democratic society, it deserves scrutiny. Yet it rarely has been given serious attention. This book fills that gap, bringing together expert philosophers, sociologists, political scientists, historians, and legal scholars to ask fundamental and pressing questions about philanthropy’s role in democratic societies.
           
The contributors balance empirical and normative approaches, exploring both the roles philanthropy has actually played in societies and the roles it should play. They ask a multitude of questions: When is philanthropy good or bad for democracy? How does, and should, philanthropic power interact with expectations of equal citizenship and democratic political voice? What makes the exercise of philanthropic power legitimate? What forms of private activity in the public interest should democracy promote, and what forms should it resist? Examining these and many other topics, the contributors offer a vital assessment of philanthropy at a time when its power to affect public outcomes has never been greater. 

AUTHOR BIOGRAPHY

Rob Reich is the faculty director of the Center for Ethics in Society, faculty codirector of the Center on Philanthropy and Civil Society, and professor of political science at Stanford University, with courtesy appointments in the Department of Philosophy and the School of Education. He is the author or editor of many books, most recently Education, Justice, and Democracy, published by the University of Chicago Press. Lucy Bernholz is a senior scholar at the Center on Philanthropy and Civil Society and codirector of the Digital Civil Society Lab at Stanford University. She is the author of Creating Philanthropic Capital Markets. Chiara Cordelli is assistant professor of political science at the University of Chicago.

REVIEWS

Philanthropy in Democratic Societies begins an urgently needed discussion of the ethical questions raised by the changing role of philanthropy in the United States and elsewhere.”
— Peter Singer, author of The Most Good You Can Do

“Finally! A really good, academic treatment of the political and philosophical underpinnings of philanthropy. Reich, Cordelli, and Bernholz managed to corral many of the best scholars writing and thinking about philanthropy, putting together an illuminating collection of essays (including their own) that draw on history, law, organizational theory, and philosophy to challenge and provoke practitioners to think hard about how we justify what we do. This is indispensable reading for anyone who thinks seriously about the obligations and responsibilities of philanthropy. Actually, it’s even more indispensable for anyone who doesn’t.”
— Larry Kramer, president of the William and Flora Hewitt Foundation

“Philanthropy involves private persons using power to influence the public realm. To what extent is the exercise of this power compatible with the values of a liberal democratic state? This is the fundamental question that runs through this important and absorbing volume. The authors are an interdisciplinary group of scholars including sociologists, political scientists, historians, political philosophers, and legal scholars. Their essays have a coherence that is unusual in a collection of this kind; well written and accessible, they avoid the trap of disciplinary inwardness that can make such collections indigestible to the lay reader.”
 
— Alliance Magazine

“An important contribution to this emerging debate. While most writing on this subject is breathless or cynical, the ten chapters that make up Philanthropy in Democratic Societies, edited by Stanford political scientist Rob Reich, along with Chiara Cordelli and Lucy Bernholz, present a balanced picture of the history, theory, and role of philanthropy.”
— Wall Street Journal

"[A] central point made in the text is that philanthropy is embedded in webs of interaction with various powers, policies, organizations, and cultural norms.... [U]rges us to deepen our thinking about the purpose and place of philanthropy while thought leadership by practitioners offers action strategies to make their field and practice more inclusive and democratic."
— The Philanthropist

"The book is a cohesive integration of consistently well-developed chapters that take different routes to varying conclusions. The questions explored are not new, but the approaches to answering them reflect the influential arguments of those who know the United States can do better as well as the fresh eyes of new and emerging scholars...The work will be of great value in the classroom, as the basis for core readings in philanthropic studies and offers promise for achieving the editors’ purpose of engaging imaginations to advance future philanthropy scholarship."
— Journal of Public and Nonprofit Affairs

"This book asks how philanthropy relates to the state, to justice, to the law and the tax codes, and to its own history as a contested space between state and market. It wonders what we mean when we talk about philanthropy in democratic societies. . . . Its interdisciplinary focus is broad . . . and the essays are well integrated."
— Economics and Philosophy

TABLE OF CONTENTS

Acknowledgments


DOI: 10.7208/chicago/9780226335780.003.0000
[philanthropy;democracy;interdisciplinary;multidisciplinary;philosophy;law;sociology;history;political science]
Provides an introduction to the volume, both process and substance. Rather than collecting essays from contributors and ordering them in an edited volume, the essays in this volume emerged from an interdisciplinary eighteen-month long conversation about philanthropy. We brought together sociologists, political scientists, and historians with political philosophers and legal scholars. The framing question for our dialogue was to explore the origins, institutional forms, and moral grounds and limits of philanthropy in democratic societies. (pages 1 - 16)
This chapter is available at:
    University of Chicago Press

Part I: Origins


DOI: 10.7208/chicago/9780226335780.003.0001
[nonprofit;corporation;altruism;capitalism;republicanism;liberalism;wealth]
This chapter examines the historical relationship between philanthropy and corporate power, tracing the origins of the nonprofit corporation, the dominant institutional home of American philanthropy. It illustrates the transformation, after the American Civil War, of the post-Revolutionary, mixed public/private republican corporation into two private, liberal corporations—the for profit corporation and the nonprofit corporation. Critical to this new Gilded Age corporate binary, the chapter argues, was another binary, the new moral vocabulary of “egoism” and “altruism.” The chapter explores the consequences of making corporate philanthropy private for the status of public authority and public values. (pages 19 - 43)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...


DOI: 10.7208/chicago/9780226335780.003.0002
[labor history;philanthropy;mass philanthropy;consensus history;social history;business history;women's history;diplomatic history;urban history;civil rights]
Historians of the United States neglect philanthropy, and this is a puzzling omission. It is not totally ignored. We find informed treatments of big money philanthropy in biographies of some major American figures. Hundreds of worthwhile monographs draw on archives kept in specialized repositories. However, philanthropy, writ large, does not rise to the status of a major topic. Why are more historians not trying to understand how the capitalist system, based on generating profit, can simultaneously produce a diverse, vigorous, and powerful nonprofit sector? Why are historians ignoring an enormous economic and experimental power, one that has mediated and continues to mediate much of the interaction between state and civil society, albeit without ever achieving full legitimacy as a democratic institution? How is it possible that important monographic work on the history of philanthropy does not significantly impact the larger narrative of American history? Why is it that historians, otherwise passionate about issues of social justice and expert in political economy, do not seem interested in the findings of specialists in philanthropy? (pages 44 - 63)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...


DOI: 10.7208/chicago/9780226335780.003.0003
[private foundation;philanthropy;democracy;John Rockefeller;Bill Gates;plutocracy;nonprofit;endowment;pluralism]
This chapter discusses the role private philanthropic foundations should play in democratic societies. Though endowments of sort or another have existed for centuries, the modern grant-making foundation -- in which private assets are set aside in a permanent, donor-directed, tax advantaged endowment with a fraction of the assets annually to be distributed for a public purpose – is a recent invention. Philanthropic foundations in this form are institutional oddities, plutocratic voices in a democratic society. Despite many anti-democratic features, I argue that the foundation is not incompatible with democracy, so long as it functions in support of what I call pluralism and discovery. (pages 64 - 82)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...

Part II. Institutional Forms


DOI: 10.7208/chicago/9780226335780.003.0004
[philanthropy;contributory philanthropy;disruptive philanthropy;Gilded Age;entrepreneurship;third party government;disruption;private provision of public goods;Bill Gates;Michael Bloomberg]
Does extensive private philanthropy by the super-rich undermine the democratic processes of state and civil society? In our chapter, we review the history of the relationship between philanthropy, state, and civil society to explore how philanthropists came to be regarded as legitimate providers of public services. We reflect on the implications this shift may have for the practice of democracy. We contend that the modern era has seen philanthropy shift from its contributory role, in which new forms of public goods can be absorbed by the state, toward a more disruptive role, in which philanthropy-backed provisions are alternatives or competitors to those provided by the state. This shift is a product of marked changes in the institutional environment surrounding philanthropy. Among these changes is diminished faith in state bureaucracy to address public needs and expanded faith in entrepreneurialism and markets to solve problems. Thus, the current environment both legitimizes and enables a particular form of philanthropy, which we refer to as disruptive philanthropy. By shaping public conversation about social issues, setting public agendas, and providing public goods in the absence of popular deliberation, disruptive philanthropy runs the risk of eroding democracy. (pages 87 - 122)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...


DOI: 10.7208/chicago/9780226335780.003.0005
[corporate social responsibility;CSR;stakeholders;ESG;sustainability;shared value;corporate ethics;benefit corporations]
The chapter first reviews the legal and economic background of corporate social responsibility (CSR), beginning with an essay by Milton Friedman that highlights the tensions between corporate management’s moral duties to shareholders and its putative responsibilities to other stakeholders. The chapter then identifies different conceptions of CSR and the various players that exert influence in its ecosystem. The remainder of the chapter is devoted first, to the relatively easy case of CSR activities that are consistent with maximizing a firm’s financial value, and then to the more contested question of when a firm’s managers can pursue social or environmental goals that may lessen the firm’s financial value. Even when long-term profitability is the only metric, managers often must make tradeoffs among different stakeholders and between competing values such as cost and safety. They must make decisions in conditions of uncertainty, where the long-term perspective renders the assessments of benefit and risk all the more difficult. Moreover, managers must create and maintain an organizational structure and culture in which difficult issues are identified and responsibly addressed. (pages 123 - 157)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...


DOI: 10.7208/chicago/9780226335780.003.0006
[philanthropy;Donor Advised Funds;DAFs;charity;charitable tax policy;charitable deductions;public charities;private foundations]
What happens when dollars have been set aside for charitable use, but have not yet been put to use. When do we call that philanthropy? When should we? This chapter begins with a general discussion of how technical tax rules can have a profound effect in shaping our philanthropic world. I then turn to examine the case of donor advised funds, the fastest-growing vehicle of charitable giving, to explore how the technical rules governing the charitable deduction laid the groundwork for their meteoric growth. I then explore whether the growth of donor advised funds is a problem and concluding that it is, I consider various options for how Congress should address the problem of donor advised funds. Finally, I conclude with a brief discussion of other forms of charitable giving that raise similar concerns and suggest ways of addressing them. (pages 158 - 177)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...


DOI: 10.7208/chicago/9780226335780.003.0007
[digital;library;internet;civil society;governance;data;Digital Public Library of America]
Modern civil society, nonprofits, and foundations are structured to manage the donation of time and money and regulations codify the limits of their use. Going forward, digital data and infrastructure will become additional philanthropic resources. Philanthropic experiments with digital assets require new rules of ownership, shifts in governance practices, and networked institutions. This chapter uses a case study of the Digital Public Library of America to theorize about governance and policy implications for nonprofits and philanthropy in a digital age. (pages 178 - 202)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...

Part III. Moral Grounds and Limits


DOI: 10.7208/chicago/9780226335780.003.0008
[public responsibilities;voluntary sector giving;free rider problem;democratic values;agent relative obligations;democracy;justice;distributive justice;charity;philanthropy]
Free riders fail to do their share. Philanthropists turn the free riding problem on its head. They do more than their share, so much so that they can displace public responsibilities. In this chapter, I attempt to explain the intuition that philanthropic giving cannot fully pick up the slack of unjust political institutions. Philanthropy can blunt injustices, but it cannot fully redress them. The reason lies in the agent-relative character of public responsibilities. They can only be satisfied by the joint action of democratic institutions. Showing the force of the free provider problem points to conditions that citizens may together place on private giving. I argue that this explanation is less clumsy than the appeal to the “warm-glow” associated with philanthropic giving, and can help explain the enduring tension between democracy and philanthropy. (pages 207 - 225)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...


DOI: 10.7208/chicago/9780226335780.003.0009
[democracy;philanthropy;equality;classical liberalism;culture;distributive justice]
The type of civil society that we have is largely a product of public policy decisions made about the sector’s governance. This paper’s goal is conceptual: it seeks to explain the very different place of philanthropy in two influential ideals of democracy (market democracy and democratic equality). Market democrats are the standard champions of philanthropy, which they value because they see private giving as more likely to be effective than state run programs, more consistent with classical liberal conceptions of justice than such programs, and important in facilitating effective criticism of public officials. However, I show that even if market democrats provide a set of reasons for celebrating philanthropy that cannot be endorsed by egalitarian democrats, the latter position nevertheless gives it two important roles. First, so long as the society falls short of realizing the goals set forth by liberal egalitarian conceptions of justice, philanthropy is one important mechanism for helping to approach those goals. Second, philanthropists can help realize the ideal of democratic equality by supporting cultural goods. This discussion suggests that policy disputes about philanthropy are often parasitic on deeper disputes of democratic theory and cannot ordinarily be adjudicated on narrower grounds. (pages 226 - 243)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...


DOI: 10.7208/chicago/9780226335780.003.0010
[philanthropy;beneficence;justice;distributive justice;reparative justice;discretion;donor control]
It is a widespread assumption, both in common sense morality and in political discourse, that individual philanthropists and foundations should enjoy wide discretion in their donations. Donors should be at liberty to give to organizations that promote causes donors care about. Governments often encourage this discretion. After scrutinizing the moral foundations of the duty to give, I argue that, given the role philanthropy should, as a matter of principle, play in many current societies, the level of discretion donors currently enjoy is unjustified. Because in non-ideal contexts philanthropy should foremost be understood as a means of reparative justice, donors ought to conceive of their giving as a public action, rather than as a private gift, and thus as subject to stringent moral constraints. Further, public officials should design tax-incentives for private giving in a way that minimizes donors' discretion. (pages 244 - 266)
This chapter is available at:
    University of Chicago Press
    https://academic.oup.com/chica...

Notes

Bibliography

List of Contributors

Index