The Price of Change: A Closer Look At Philanthrocapitalism

It is undeniable that there currently exists an unprecedented level of disapproval towards the actions (or lack thereof) taken by the current government. Approval ratings for Congress have recently been nearing the bottom, with the percentage dropping to an all-time low of 9 percent in November of 2013. This lack of confidence has not been isolated to one political ideology, with the approval ratings from Democrats, Republicans, and Independent voters all falling below 15 percent as of December 2015. In a time of extreme gridlock and political partisanship, it seems the only thing most everyone can agree on is that they harbor a strong distaste for the ineffective nature of the government when it comes to addressing issues.

Still, in the face of extreme bureaucratic idleness, social change seems to remain the objective of many American citizens. A majority of the most prominent movements today that work to bring about societal awareness and progress are not government-sponsored, but rather are organized by citizens taking part in collective action. However, for all the efforts by the masses, there still seems to be a significant level of disconnect between the galvanization of social movements by the public and actual policy advancements. Namely, the Black Lives Matter movement’s attempts to address systemic issues have been the victim of political inaction, despite the high-profile support the organization has garnered since its inception.

Money, it would seem, is the driving force behind much of the progress being made in America, as the ultra-rich are often the ones setting the agenda on issues ranging from gun control to global warming to education reform. Duke University professor Kristin A. Goss recently published a study analyzing the trend of political action amongst philanthropists, and found over half of these affluent individuals and families have policy aspirations and goals. With the precedent set by the 2010 Citizens United Supreme Court case, This growing trend has lead to the rise of “philanthrocapitalism,” in which wealthy individuals institute their own charitable organizations to pursue the causes they are passionate about.

According to Goss’ study, the most popular focus area amongst philanthrocapitalists is education reform, with the efforts being largely being headed by the Gates Foundation, the Broad Foundation, and the Walton Family Foundation. These three prominent family-run charitable organizations have contributed billions of dollars over the past decade towards transforming the public school system to reflect the charter school format, an approach that has been touted as the direction towards progress. However, for all of charter schools’ supposed benefits, a 2009 report by Stanford University revealed that over eighty percent of them performed either at or below the level set by traditional public schools. The families’ other agendas, such as merit-based teacher pay and a higher focus on standardized testing, have all fared similarly dubiously under close examination.

One of philanthrocapitalism’s most pressing issues is the lack of a system of checks and balances that would be present if these organizations were government-run.  Unlike elected officials who are held to the standards set by their constituents, philanthrocapitalists are private citizens who are free to pursue their own political and social agendas.

When private benefactors choose to donate money in stock-holdings in lieu of cashing in these stocks, they circumvent the process of paying capital-gains taxes to the government. This practice of individual policy-makers undercutting the democratic process of majority rule creates a dangerous precedent, and threatens to shape America as a plutocratic society run by a select few controlling a majority of the wealth.

Private citizens can be free to push boundaries and pursue social causes without having to conform their grand ideas, whereas government programs are often bound by the slow wheels of bureaucracy and are limited in scope by an extremely ideologically-divided body politic. In addition, a majority of the successful men and women that work to influence public policy have reached their station through influential and innovative visions. By bringing real-world experience into a field that is primarily dominated by career politicians focused on reelection, these individuals can set a course of action more focused on social or political progress.

While the gains and good intentions behind philanthrocapitalism are clear, there remains a long way to go before the general public can reap all the benefits of this growing trend. Rather than exhausting funds and potentially harming the public through faulty initiatives such as the flawed education reform noted earlier, charitable corporations should aim to be more receptive to research findings on the effectiveness of their strategic efforts. By instituting a checks and balances system, private donors can ensure their money is spent responsibly and that the policy changes truly reflect the public agenda.  In addition, policymakers, political scientists, and philanthrocapitalists need to have an open discourse about how best to work together to preserve the right to free political speech while also pursuing an egalitarian and democratic approach to this practice.  It is necessary that a compromise be made in which private charitable foundations cooperate with government organizations to direct funds in effective ways that truly benefit the public good, rather than just having the appearance of doing so. Civilian involvement in social affairs is vital and should be encouraged, but not at the expense of the foundations of democracy the country was built on.

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