AMERICANS AND CHARITY
excerted from “Why the Rich Don’t Give” by Ken Stern in the April, 2013 Atlantic
The wealthiest Americans give 1.3% of their income to charity. The poorest give 3.2%
When Mort Zuckerman, the New York real-estate and media mogul, lavished $200 million on Columbia University in December, 2012, to endow the Mortimer B. Zuckerman Mind Brain Behavior Institute, he did so with fanfare suitable for the occasion: the press conference was attended by two Nobel laureats, the president of the university, the mayor, and all the media. Many of the 12 other inidvidual charitable gifts that topped $100 million in the US last year were showered with similar attention: $150 million from Carl Icahn to the Mount Sinai School of Medicine, $125 million from Phil Knight to the Oregon Health and Science University, and $300 million from Paul Allen to the Allen Institute for Brain Science in Seattle, among them. If you scanned the press releases, or drove past the many university buildings, symphony halls, institutes, and stadiums named for their benefactors, or for that matter read the histories of grand giving by the Rockefellers, Carnegies, Stanfords, and Dukes, you would be forgiven for thinking that the story of charity in this country is a story of epic generosity on the part of the American rich.
It is not. One of the surprising, and perhaps confounding, facts of charity in America is that the people who can least afford to give are the ones who donate the greatest percentage of their income. In 2011, the wealthiest Americans – those with earnings in the top 20% – contributed on average 1.3% of their income to charity. By comparison, Americans at the base of the income pyramid – donated 3.2% of their income. Their generosity is accentuated by the fact that, unlike middle- class and wealthy donors, most of them cannot take advantage of the charitable tax duduction, because they do not itemize dedutions on their income tax returns.
But why? Lower-income Americans are presumably no more intrinsically generous (or “prosocial”) than anyone else. The wealthy may simply be less generous – that the personal drive to accumulate wealth may be inconsistent with the idea of communal support. Wealth has been associated with unethical behavior and the rich are way more likely to prioritize their own self-interests above the interests of other people. They are more likely to exhibit characteristics that would be stereotypically associated with “assholes”. Or, other more complex factors may be at work. Lower income people and people who identified themselves as being on a relatively low social rung were consistently more generous with limited goods than the upper class were. Notably, though, when both were exposed to a sympathy-eliciting video on child poverty, the compassion of the weathy began to rise, and the group’s willingness to help others became almost identical.
Could isolation of wealthy Americans from those in need be a cause of their relative stinginess?Greater exposure to and identification with the challenges of meeting basic needs may create “higher empathy” among lower income donors. When American Zip codes were analyzed for giving hablits, less aflluent Zip codes gave relatively more. It also showed differences in behavior among wealthy households, depending on the neighborhood they lived in. Wealthy people who lived in homogenously affluent areas – areas where more than 40% of the households earned at least $200,000 a year – were less generous than socioeconomically diverse suroundings. It seems that insulation from people in need may dampen the charitable inpulse.
Wealth affects not only how much money is given but to whom it is given. The poor tend to give to religious organizations and social service charities, while the wealthy prefer to support colleges and univiersities, arts organizations, and museums. Of the 50 largest individual gifts to public charities in 2012, 34 went to educational institutions, the vast majority of them colleges and universities, like Harvard, Columbia, and Berkeley, that cater to the nation’s and the world’s elite. Museums and arts organizations such as the Metropolitan Museum of Art received nine of these major gifts, with the remaining donations spread among medical facilities and fashionable charities like the Central Park Conservancy. Not a single one of them went to a social-service organization or a charity that principally serves the poor and the dispossessed. More gifts in this group went to elite prep schools than to any of our nation’s largest social-service organizaions such as the United Way, Salvation Army, and Feeding America, which got, among them, zero.
Underlying our charity system, and the tax code, is the premise that individuals will make better decisions regarding social investments than will the government. Other developed countries have a very different arrangement, with significantly higher individual tax rates and stronger social safey nets, and significantly lower charitable contribution rates. America has always made a virtue of inidividual philanthropy, and we tend to see our large, independent charitable sector as crucial to our country’s public spirit. There is much to admire in our approach to charity, such as the social capital that is built by individual participation and volunteerism. But our charity system is also fundamentally regressive, and works in favor of the institutions of the elite. The pity is, most people likely believe that, as Michael Bloomberg once said, “there’s a connection between being generous and being successful.” There is a connection, but probably not the one we have supposed.
The 13th richest person in the world and past mayor of New York City, this 71 year old has the wealth and power to push any agenda he feels is good for the rest of us. Health is recently on his mind. He has banned trans fats from restaurants, made fast food chains post calorie counts, and tried to limit the size of sodas people can buy.
He has joined the international cabal to end smoking, with tobacco going to kill a billion people this century. His ban on smoking in public places in New York took off around the world and adult smoking rates have halved and life expectancy has climbed nearly 3 years in a decade in NYC. 556 grants, 61 countries and $109 million later, they have mapped global smoking trends. The rates are rising in Thailand because of low roll-your-own taxes. They want to end the Chinese tradition of giving cigarrettes as gifts. They name the Indian ministries blocking reform because they own bidi factories. They use their enormous personal wealth to change government policies and shift human behavior.
Over the past 30 years, the world has been changed by globalization and technology, and from this has emerged a new class of billionaires who profitd from the change, innovators, business leaders and heirs. In the prime of their lives, many have turned their attention to remaking the world, often through policy and politics.
Their are many examples. Facebook’s Mark Zuckerberg gives $100 million to rewrtie the rules for Newark Public schools, spends millions on political TV ads and then travels to Congress to demand immigration reform. The casino magnate Sheldon Adelson bets $100 million to elect Republican candidates who mostly lose in 2012, and then publicly vows to do it again. Without financiers George Soros and Peter Lewis, marijuana legalization would not have proceeded so far in so many states. Conservative industrialists David and Charles Koch have funded groups now organizing to defund Obamacare. Bloomberg, Bill Gates, Eli Broad and Jim Walton are funding the revolution taking place in K-12 education charter schools, standardized tests, Common Core, merit pay, and the end of tenure.
Not since the early 20th century have inidivduals had so much power to unilaterally shape our lives and shift our ideas. And never in history have they been able to exert their will so easily on such a global acale. Bloomberg is attempting to define his legacy, as a social and political engineer.
He makes no secret of his ambition and wants to do things that nobody else is doing in a jet-setting blur of wealth, power and international recognition. With his connection to mayors, prime ministers and world leaders, he has launched a privately funded competition to improve city governance – increase volunteerism, impose further helmet and road-safety laws in the developing world. “A lot of elected officials are afraid to back controversial things. I’m not afraid of that. You’re not going to hurt my business, and if you are, I don’t care. I take great pride in being willing to stand up.”
Bloomberg’s money flows through a complex web of nonprofit foundations and private entities, often difficult to track. Through local governments, he has funded issues as vital as murder and as mundane as small-business permitting. He has spent $100 million to genetically engineer a better mosquito, and an equal amount to stamp out polio in Nigeria, Afghanistan, and Pakistan. In Africa, he has built maternal-health centers, in Vietnam, stiffer helmet laws, on Pitcairn Island, he is funding ocean conservation. In America, he is helping shutter coal-fired plants, promoted immigration reform (with Rupert Murdoch), setting fracking policy, supported Planned Parenthood and gay-marriage referendums. In local, state, and federal elections, he is spending millions to back candidates who support gun control and education reform and defeat those who oppose them. If a candidate supports gun background checks, he is likely to support them, even though he has probably nothing in common on any other issue. In Colorado, he backs tax-hiking school reform initiatives, local school-board elections around the country, to elect reformists on city councils. He wants to end gerrymandering that pulls people away from the center.
His political spending has no annual budget. If people digress from the hard numbers into storytelling, he will cut them off. He is offering a competition offering a 5 million euro prize to the European city with the most innovative idea to improve local governance. It’s a repeat of a competition, Bloomberg held in America in 2012. That prize went to Providence, R.I. to track the number of words the city’s low income children are exposed to daily. The goal is to give the tools to parents to encourage more communication to their children.
The tradition of private philanthropy is more developed in the US than in Europe. “You can do things that the public does not think are appropriate or conventional for public moneys. The conviction that big money should operate independently of public opinion, is at the core of Bloomberg’s philosophy. Many have come to regard him as a cause for concern, especially those in conservative circles who view him as the ultiimate big-city elitist imposing his will on a freedom-loving country. Both Virginias have passed laws to outlaw his pet practice of hiring private investigators to show how easy it is to buy guns outside the law at high-traffic gun stores, and gun shows.
He takes all the populist backlash as validation. He exists beyond the baser irrationality of the political process. He casts himself outside of partisanship and ideology. He sits squarely at the liberal end of the political spectrum, although he defends Wall Street and stop-and-frisk policing. This is clearest in his gun campaign, to almost single-handedly to counter the effect of the National Rifle Association, even if it means defeating Democrats and electing Republicans. He has been instrumental in passing background checks and other restrictions in Conneticut, New York, Colorado, and Maryland.
In 2001, he was worth about $4 and now at the end of 2013, he will be worth $31 billion. His family is looked after by trust funds, and he has bought everything he wants. The rest, he has promised to give away, “bouncing the check to the undertaker. That’s a nice problem to have. The worst combination of things is to not try to do the right thing, and to lose. Then you have nothing to hang your hat onto.”