(April 15, 2020) With his book 2018 book Just Giving: Why Philanthropy is Failing Democracy and How It Can Do Better, Rob Reich joined a growing chorus of thinkers who are assessing the impact of modern day philanthropy. As Professor of Political Science at Stanford University, the director of Stanford’s McCoy Center for Ethics in Society, and co-director of Stanford’s Center on Philanthropy and Civil Society, he is in an excellent position to do so. In Just Giving, Reich objects to some major hallmarks of philanthropic structure- in particular, the current design of most tax-subsidized giving, perpetual endowments and the prioritization of donor intent over the common good. He is currently working on the ethical and political dimensions of digital technology. Editor in chief Gail Picco had a conversation with Reich at his home in California on April 14. The interview has been edited for clarity and length.
Gail Picco: Thank you for taking the time out of your day to chat with me. Are you at home near Stanford now? Are you guys doing all right?
Rob Reich: Yes, I think California, and the Bay Area in particular, was on the earlier side of taking severe measures of sheltering in place. All of the anxieties about the virus are still present, but it’s good to know that the hospitalization rates aren’t horrible. We don’t have anything like the ventilator crises that are happening in New York and elsewhere. But I’d say, more generally, one of the things this has revealed about the United States is how utterly catastrophic the federal infrastructure and response is. But in California and the Bay Area, we’ve had a science-based approach and sensible political leadership. It’s a small relief, but nevertheless, it doesn’t bode well for the country.
Gail Picco: We are definitely keeping an eye on what you are going through from here and sometimes it’s hard to watch, and I do want to talk to you about the pandemic. But the first thing I want to clear up, especially because we are featuring a review of it in a couple of days, is that you are Rob Reich, a Stanford University professor who published Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do Better in November 2018, not Robert B. Reich, former secretary of labour in the Clinton administration who just published The System: Who Rigged It, How We Fix It.
Rob Reich: That’s right.
Gail Picco: Have you ever met him?
Rob Reich: One time. There was only one time we did an event together, maybe four years ago for his last book. I did the introduction, and it was probably the funniest I’ll ever be.
Gail Picco: In your book, you talked about how philanthropy has weakened democracy by using private and tax creditable assets to leverage public influence, not necessarily for the public good. Can you just summarize that for me, the idea that philanthropy is the expression of private interest as opposed to the public good?
Rob Reich: I’ll give you the simple expression in one sentence and then the background ideas that are connected to it. Philanthropy, by definition, is the direction of private resources to some public facing influence. And the larger the amount of resources, the bigger the donor, the greater the power of the philanthropist to affect the public. The background I want to add is there are that many people who believe that philanthropic acts are always praiseworthy if the alternative to philanthropy is just keeping the money for yourself.
The thought goes that we should praise someone who attempts to be philanthropic, even if the money is badly or ineffectively used. And because I think that big philanthropy is an exercise of power by wealthy people, it does not automatically deserve our gratitude. It deserves our scrutiny. If the power is being wielded on behalf of democratic institutions or ideals, then we can praise it. But not simply because compared to consumption, it’s better. [Because], of course, in the vast majority of democratic societies, philanthropy is not the exercise of liberty to give money away, it’s a tax advantage.“
Rob Reich: All citizens have a financial stake in the tax concessions they give to philanthropy, small and large, depending of course on what the tax incentive is. The mechanism [across] different countries is not uniform.
Gail Picco: In Canada, the amount of money tax-receipted by charities has almost doubled in the past 10 years. Do you think that the role of philanthropy has contributed to the widened wealth disparities?
Rob Reich: I’m not sure my hypothesis would be that widening income and wealth inequality is a background condition for more philanthropy by the wealthy. We now have more fantastically or egregiously rich people under Gilded Age conditions and, partly to legitimize their outsize wealth and partly for social reputation, rich people give money away. I don’t know whether your data is counting the sum total of ordinary gifts, which are going up, or it’s really counting the explosion of giving by the super wealthy. In the United States, the data shows that the wealthy are giving away larger amounts of money and absolute dollars, while the middle class and poorer Americans continue to give some money away, but less than they used to.
Gail Picco: Can you talk to me about the idea of charity for a bit. I did a book called Cap in Hand: How charities are failing the people of Canada and the world a couple of years ago, partly based on the idea of ‘there but for the grace of god, go I’ doesn’t really equate to a just society. What do you think about charity?
Rob Reich: Maybe one way to give you an answer is to explain a certain evolution in my own thinking, that’s reflected in Just Giving, and which is the root of charity. The etymological root of charity is in almsgiving, or assistance to the poor.
There is a natural sentiment that gives people a reason to give [and] that charity is a way of redressing disadvantage and alleviating poverty. To put it more simply, meeting the basic needs of human beings in our psyche and I, myself, thought that was a reasonable point of view.”
Rob Reich: But when I discovered how little charity actually went to serving the poor, I found it to be a big problem with American charity, both in the policy structure and the individual inclination about where to give money away. Over time, however, I came to a slightly different view, not a complete rejection of that view, but a different view — the idea that in modern advanced democracies, the chief responsibility for meeting the basic needs of citizens rests with the government through our tax contributions. And charity represents a second-best response to that first obligation of meeting peoples’ basic needs.
Labeling it as a second-best response might be a little wonky. It’s not that charity is harmful necessarily or unwelcome. But it’s not a substitute for the ideal arrangement that we meet basic needs through our collective institutions and governments in a democratic society. Right now, that leaves ample space for charitable giving, but not as a backstop to the state when it happens to fail.“
Gail Picco: One of the things that I’m interested, and I’ve talked to other people about, is how overnight the fractures in society have become so apparent in a country where a lot of energy and enthusiasm is spent trying to promote the idea of every person is created equal under the law. How do you think the pandemic has highlighted those fractures?
Rob Reich: I have a couple thoughts about that. The first is that with respect to big philanthropists or wealthy individual donors or large foundations. The Gates Foundation was among the very few large donors who had been focusing on pandemic preparedness. So, Bill Gates deserves some credit for the foresight and philanthropic commitments that he has had long before the current pandemic. And in the 2016 TED Talk he gave, although there are lots of other examples you could point to, of his speaking about this, one of the main responses he wanted to see happen was that, in the developing world, there needed to be stronger, stronger public health infrastructure, so outbreaks of novel strains of influenza or other kinds of viruses could be contained.
And the thing I feel the current pandemic has revealed is that the Gates Foundation is treating the United States like a country that’s in the developing world portfolio. For an American citizen, it’s just an enormous disappointment and a very powerful sign of the decline of American democracy.”
Rob Reich: The pandemic is being felt differently across our society. California and the Bay area has responded more quickly than Louisiana, for example. There are unequal health systems across the country. But the effect of the pandemic is that it doesn’t pick people by the size of their pocketbook.
Gail Picco: In the aftermath of these catastrophic events, will the approach within the philanthropic communities change?
Rob Reich: If history is any guide, we shouldn’t expect a reversion to the status quo. We should expect a growing debate on the idea of universal basic income—something Andrew Yang promoted during the presidential primary, but no one took seriously—and within weeks is part of the public discussion.
Gail Picco: Thank you so much for your time today, Rob. It would be great to touch base when we come out the other end of this.
Rob Reich: Yes, it really would. Take care.
Gail Picco: You too.