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Beware of Philanthro-Capitalists Bearing Gifts

The philanthro-capitalists have silenced their critics. The question is how, and for how long.

Bill Gates has emerged as the epitome of the new era of philanthro-capitalists. (Photo: Thomas Hawk)

The charitable sector is a multi-billion dollar industry, and business is booming. In No Such Thing as a Free Gift, sociologist Linsey McGoey exposes how “philanthrocapitalism” enables a small group of wealthy individuals to play an outsized role in global policy-making, and how government social services are being usurped by foundations with corporate interests. To order your copy of this book, make a donation to Truthout today!

The following is an excerpt from the introduction to No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy:

Most foundations with influence on a par with the Gates Foundation have received considerable scrutiny from academics and journalists. And yet the Gates Foundation – indisputably the most influential private foundation in the world today – hasn’t received much critical attention. While positive news stories appear almost daily, only a small handful of media and academic articles have suggested there may be a downside to the foundation’s activi- ties. They include an important report from the LA Times which queried whether the foundation’s extensive holdings in oil compa- nies subvert its public health mission. A couple of years later, a physician based in London, David McCoy, analyzed the foundation’s total grants in global health to date and found that a small percent- age goes to researchers based outside Europe and North America, exacerbating glaring inequalities in research and development capacity between the global north and the global south, and restrict- ing the ability of southern researchers to develop homegrown technological solutions. Diane Ravitch, the noted education histo- rian, has written critically about the Gates Foundation’s role in US public education.

These are important criticisms. But they are scattered among a few newspapers and academic journals. Why the lack of attention? Timing is one reason. The speed at which the Gates Foundation has emerged as a significant power-player in US and global political arenas has, by and large, simply outrun academic scrutiny of its achievements and failures.

But speed alone is not the sole problem.

‘A large amount of money completely surrounded by people who want some’, is how the US activist and social critic Dwight Macdonald once described the Ford Foundation. The same epithet applies to the Gates Foundation. Philanthropic foundations are a lifeline for a star- tlingly high number of academic research teams and fledgling non-profit organizations. Often, it’s simply safer to stay quiet than to openly voice discomfort with how the foundation spends its money.

(Image: Verso Books)(Image: Verso Books)There’s also the fact that the Gateses do considerable good. Like Melinda’s willingness to speak out about the importance of contra- ception when the lingering effects of the US government’s former Global Gag Rule continue to make it hard for foreign NGOs receiv- ing US funds to offer planned parenting options to women in developing countries. Or Bill’s support for raising the capital gains tax in the US. He has also voiced support for the campaign for a global tax on currency speculation in global financial markets, something that has raised billions for government treasuries in regions where it has been introduced. And while the vast bulk of Gates’s giving wasn’t ramped up until he was well into his mid- forties and fifties, there’s ample evidence that many of the causes he supports today have been close to his heart for decades. His much-reported 2014 donation of $1 million to campaigners calling for tighter firearm controls in the state of Washington wasn’t a whim donation; almost twenty years earlier Gates had offered $35,000 towards a 1997 state ballot initiative supporting stricter gun laws.

But the fact that the Gateses often fund initiatives that many people approve of should not insulate them from criticism. And to date, that’s exactly what has happened: gaping silence over founda- tion activities where spirited discussion should flourish. Even individuals who are sceptical of the tax incentives motivating large- scale philanthropy, or who think that philanthropy is no substitute for state welfare support and labour protections, tend to salute the efforts of Bill Gates. Worse, they may idealize Gates as a corrective to more conservative philanthropists such as the Koch brothers or the Walton family, heirs of the Walmart fortune.

A typical article tends to read like this one, by Barry Ellsworth, in an op-ed for the online news bulletin ‘Charles and David Koch are at it again’, Ellsworth writes,

this time using their wealth to back a creepy ‘Carenival’ complete with games, jugglers, knife throwers, and acrobats whose sole purpose is to scare people away from Obamacare . . . some billionaires like Microsoft founder Bill Gates and Facebook’s Mark Zuckerberg use some of their vast riches to advance the cause of mankind through humanitarian donations. Then there are those like the coal-loving Koch brothers, who seem to delight in using their money to throw up roadblocks to programmes that would benefit the vast majority of Americans.

The problem with this type of commentary is that it is a little like professing that you believe in democracy but only if your preferred party is the sole candidate. The same regulatory laxity and tax allow- ances that make it possible for the Koch brothers to exert considerable influence over US politics underpins the ability of Gates, Zuckerberg, or Soros to fund a pro-immigration platform or to overhaul US education, for better or for worse. To rein in the Kochs you must be willing to rein in Gates. Or Soros. Or Buffett. Or Zuckerberg.

Another reason for focusing on Gates and his foundation is that no other public figure has been more influential in shifting the global discourse on philanthropy in recent decades. Through initiatives like the Giving Pledge – Gates and Buffett’s exhortation to their fellow billionaires to give at least 50 per cent of their fortunes to charity – Gates offers a powerful antidote to the mushrooming legions of economic doomsayers who suggest that growing wealth gaps are the biggest threat to global sustainability today. ‘Back off’, Gates and his fellow pledgers protest when faced with criticism from economists such as Thomas Piketty and James Galbraith. ‘We’re giving it away.’

Gates has made his rejection of Piketty’s call for a wealth tax clear on a number of occasions, including during a widely reported conversation with Piketty which the latter recounted at a conference in London in early 2015. Piketty told his audience that Gates said to him, ‘I love everything that’s in your book, but I don’t want to pay more tax.’ Piketty added: ‘I think he sincerely believes he’s more effi- cient than the government, and you know, maybe he is sometimes.’

Is he? This is the first book to address that question in depth. Just how efficient is Gates’s philanthropic spending? Are the billions he has spent on US primary and secondary schools improving educa- tion outcomes? Are global health grants directed at the largest health killers? Is the Gates Foundation improving access to affordable medicines, or are patent rights taking priority over human rights?

It’s not easy to criticize philanthropy at a time when giving appears more necessary than ever. And it’s particularly not easy to criticize an organization as widely lauded as the Gates Foundation. Other foundations are more obviously subject to criticism, such as the Walton Family Trust, which for years has been something of a philanthropic whipping boy for critics on the left and the right. Those on the left condemn the Waltons’ tendency to fund causes that clearly help to sanitize Walmart’s image as a tight-fisted, union-busting employer. ‘Much of Wal-Mart’s philanthropy’, Liza Featherstone at The Nation notes, ‘has been directed towards promoting anti-government politics, whether by lobbying against high taxes for the rich or contributing to Republican candidates, conservative think-tanks and efforts to privatize education.’

Even conservative critics have chimed in with the criticism. Forbes, for example, recently ran an article featuring a report from the watch- dog group Walmart 1% which points out that living members of the Walton family have given surprisingly little of their personal fortunes to the Walton Family Foundation. With just under $2 billion in assets, the Walton Family Foundation is a power-player in philanthropic circles. It doesn’t approach the Gates Foundation’s enormous $42 billion endowment, but it appears on the top-forty list of US founda- tions when ranked by endowment size. Remarkably, only a miniscule portion of that money comes from the personal wealth of the second generation of Walton heirs: Rob, Jim, Alice, and Christy. The founda- tion sustains itself almost entirely through ‘tax-avoiding trusts established with assets provided by the late Sam, Helen, and John Walton or their estates.’ Jim and Alice Walton have made zero contri- butions to the foundation during its twenty-three-year existence, while Christy and Jim have offered nominal sums.

Those figures, based on twenty-three years of tax filings by the Walton Family Foundation, don’t reflect private donations made by family members outside of their main foundation, estimated at about $5 billion to date. But the facts are still startling: a large and powerful foundation bearing the Walton family name has received less than 0.05 per cent of the living Walton’s heirs combined net worth of $139.9 billion. To observers on the left and the right, that figure seems downright cheap. The author of the Forbes piece, Clare O’Connor, does what a lot of journalists writing about stingy billionaires tend to do: she contrasts the Waltons with Gates and Buffett, commending the latter for giving 36.2 per cent and 26.9 per cent of their wealth to philanthropic causes respectively.

The problem is, this is a Manichean way to approach philan- thropy, unreservedly reprimanding those who give the least, and unreservedly applauding those who give the most. It’s true that both Gates and Buffett have relinquished far more of their personal fortunes. They have also, unlike the Waltons, spoken passionately about and invested in causes that do not coincide with their own business interests. In many ways, theirs is the opposite of the overtly self-serving philanthropic and lobbying efforts of the Waltons. Buffett’s widely reported scorn for tax laws that left his secretary forking over more proportionately of her salary in taxes than he does is evidence of that.

But there are many grey zones where the separation between the Gateses’ personal interests and the Gates Foundation’s priorities are less clear. Perhaps the clearest example is the thorny area of global patent protections. For decades, health activists in the US and inter- nationally have suggested that current patent laws are a significant obstacle to achieving worldwide access to affordable medicines. Bill Gates does not agree. And his outspoken views on patents, combined with enormous cash injections towards the health policies he prefers, may have single-handedly thwarted efforts to open pharmaceutical markets to more generic competition. The influential health scholar James Love has noted the problem concisely: ‘[The Gates Foundation] funds most of the journalism on this topic, and they have been hard- line advocates for strong patent protection, since the 1990s. This creates more problems than you might think, because they influence the Obama Administration, the WHO, and the Global Fund on these issues, not to mention the press coverage and most academics and NGOs working on global health issues.’

Another concern is the Gates Foundation’s philanthropic part- nerships with Coca-Cola, a company that has spent millions lobbying against increased taxes on sugary beverages, something health advocates see as essential to battling the global obesity epidemic. And let’s not get started here on the Foundation’s collabo- rations with Monsanto. I’ll leave that for Chapter 7. But my interest in the Gates Foundation goes beyond cataloguing a string of corpo- rate partnerships that have surprised and inflamed health and environmental activists. It goes beyond the question of whether philanthropy still counts as philanthropy if it helps to line a benefac- tor’s pockets. I’m interested in the mindset that has fuelled public receptiveness to Gates’s donations, a receptiveness that is fostered in part through tax-deductible philanthropic marketing efforts, and in other, less tangible ways through vestiges of religious sensibility which stress the importance of Christian charity even among secu- larists. It is a mindset that restricts public debate surrounding philanthropy by making even the most judicious criticism appear petty or small-minded. The same happens with criticism of foreign aid schemes – criticism Gates has taken offence to. On numerous occasions he has suggested that it’s misguided to question the value of foreign aid. Through his foundation, he’s spent hundreds of millions in tax-deductible grants to convey the public message that aid ‘works.’

Unfortunately, the belief that aid ‘works’ is a simplistic and, in many ways, misguided one. It’s a notion that diverts attention away from the realities of misplaced research priorities by the world’s most powerful pharmaceutical companies, blankets understanding of how trade laws infringe upon national manufacturing and import- ing capacity, and obscures the role that global financial markets play in creating worldwide food instability.

Public enthusiasm for clipping the philanthropic wings of large benefactors has ebbed and flowed throughout recent decades. The Gates Foundation’s reshaping of the global health field and the US education sector mirrors earlier initiatives led by Carnegie and Rockefeller. Their efforts helped to pioneer access to health services, to public education, and to cultural and artistic endeavours, domes- tically and abroad. But their influence bred as much resentment as praise. For many, even the application of the term philanthropy is an incongruity when it comes to the ‘big three’ foundations of the twen- tieth century: the Carnegie, Rockefeller, and Ford Foundations. As the cultural historian Francesca Sawaya points out, ‘Philanthropy has traditionally been defined as the disinterested expression of a “love of mankind.” So why associate that term with the Carnegie or Rockefeller Foundation, whose financial histories and activities have not been seen as disinterestedly beneficent by their critics on either the left or the right?’

Today, despite the unparalleled global influence of the Gates Foundation, legislators are mostly silent about the negative repercussions of large-scale giving. In DC, as one of my sources said to me, the ‘appetite for reform’ of the philanthropic sector is weaker than it has been for decades. The philanthrocapitalists have silenced their critics. The question is how, and for how long.

Copyright (2015) by Linsey McGoey. Not to be reposted without permission of the publisher, Verso Books.