Billionaire philanthropy has always held a fragile relationship with civil society organizations and the larger public, yet recent times have called into question the validity and intentions behind their philanthropy. By definition, billionaire philanthropy is the desire to promote the welfare of others through generous donations of money which come from the “elite” or richer members of society such as Bill Gates, Mark Zuckerburg and Jeff Bezos. There are a few primary issues with such acts: the non-altruistic nature of billionaire donations, the exacerbation of economic inequality and the transformation of corporate power into political power.
Economic rationality assumes that people behave selfishly and in many cases of billionaire philanthropy this is demonstrated. By donating a rather small percentage of their overall income, these acts are merely conducted out of personal benefit or the sense of moral righteousness gained. The issue with this is that their philanthropy then becomes an exercise of power, an attempt to direct private assets for social influence or optics. In a Washington Post survey of the United States’ 50 wealthiest people and families, with a collective net worth of nearly 1.6 trillion dollars, found that their publicly announced donations amounted to $1 billion during COVID-19. In conversion, this accounts for merely 0.1% of their combined wealth. While some like Bill Gates and Jack Dorsey have spearheaded a public campaign for scientific research, medical care and financial donations, others like Jeff Bezos, the wealthiest man in the world gave $100 million to Feeding America and $25 million for All in WA. In comparison for the median American, Bezos’ giving is the equivalent of donating $85. The facade of altruism that is displayed by billionaires through “promises” of donations is the primary issue. In an ideal world, such large donations and wealth can serve as the democratic society’s “risk capital”, engaging in those risky, long term bets which cannot be made by governments with civil society organizations. However, the lack of engagement and disproportionate spending has led ample to question their preconceived notions in the debate about income inequality.
Income inequality has long-standing implications upon the overall economic growth of a nation, and with billionaire philanthropy comes massive tax breaks which feed into the existing vicious cycle. According to Emmanuel Saex and Gabriel Zucman, economics professors at the University of California at Berkeley, the very richest Americans now pay a smaller share of their income in taxes than they have at any time since the 1910s. The resulting issue is that billionaires give about 1% of their wealth to charity every year, as they believe that philanthropy’s role is to come up with solutions the government cannot achieve, thus providing to mitigate immediate human suffering, for example global pandemics, is not fruitful.
Indeed, there exists strategic philanthropy which can sustain various sectors and impact the economy in a positive manner, however it is largely overshadowed by the taxpayer-subsidized acts of philanthropy. In order to rectify this situation, reform policies should promote incentives and encourage broader giving by more segments of society, they should protect the true interests of the general public and ensure that funds are being allocated in an efficient manner. As Warren Buffet once said, “If you are the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%” and in the days to come it will be vital for civil society to achieve exactly that.