By: Naomi Schaefer Riley and Jim Piereson
“That’s how we handle a global pandemic?” New York Gov. Andrew Cuomo railed at a press conference last month. “I have to call Mr. Kraft and say, ‘Can you do me a favor? … As long as the plane is going, can you pick up masks for me?” Cuomo’s complaint was not only that we are dependent on China for protective gear, but also that he has to rely on a wealthy private citizen, New England Patriots owner Robert Kraft, to bring protective gear for New Yorkers.
The governor of New York is not the only one annoyed by this turn of events. In a recent piece for Wired, Rob Reich, the faculty co-director of the Stanford Center on Philanthropy and Civil Society, and Mohit Mookim, a researcher at the Center for Ethics in Society at Stanford University, bemoaned that “when the government fails us, one temptation is to look to rich people like Bill Gates.” But, they noted: “We should never be dependent on the whims of wealthy donors … for our collective health and well-being. … That would be a betrayal of democracy. Rather than democratic processes determining our collective needs and how to address them, the wealthy would decide for us. We wanted rule by the many; we may get rule by the rich.”
An article in Vox also expressed anxiety about how much philanthropists are doing to help during the pandemic. As Theodore Schleifer writes: “For all the wealthy’s good deeds, this status quo raises alarming questions about the long-term dangers of this dependency on this private sector and its generosity, especially about the world we’ll inherit once the dust settles.”
There is plenty of reason for alarm these days — about our health, the economy, and the incompetence of our leaders. But it is not clear that Bill Gates or Robert Kraft are deciding anything for us. They are responding to a variety of needs and requests. The fact that they are not all putting their money to the same uses suggests that “rule by the rich” is not quite the monolith that their detractors describe. One of the most important aspects of American philanthropy is the diversity of causes it supports and approaches it takes.
Consider the strategies of Gates and one of his fellow philanthropists, Michael Milken, in the development of a medical treatment for the virus. Gates has decided to fund seven separate laboratories developing different kinds of vaccines. Milken has focused his attention on the development of therapeutic approaches to the virus. One such pharmaceutical company, called BioMarck, recently announced a drug for use against acute respiratory distress and is set to begin testing it on COVID-19 patients. As Milken told the Wall Street Journal, “There’s no venture idea, anywhere in the world, that I’m not willing to have one of our teams look at.”
Meanwhile, smaller donors are also giving to a variety of modest but potentially important COVID relief efforts that governments may not even notice. According to a survey by Fidelity Charitable, which has the largest collection of donor-advised funds, “a quarter of donors plan to increase their donations in response to COVID-19, while 54 percent plan to maintain their giving levels.”
These smaller, more forward-thinking efforts are often not the kinds of risks that Washington can afford to take. If we left it up to the hands of the “many,” it’s not clear they would vote for that risk either. The response to the virus by government agencies should not inspire much confidence in their ability to identify helpful solutions to the virus. From the state and federal press conferences that seem to offer contradictory information — Should we wear masks or not? Do we have enough ventilators or not? Should we try hydroxychloroquine or not? — to the stimulus checks that were sent to Harvard University, there is agreement across the board that the COVID challenge has not been government’s finest moment.
And yet, the answer by philanthropy’s critics is always to double down on the public sector and public financing. Schleifer worries that wealthy donors “are imbued with unaccountable, untransparent, and undemocratic influence. Power grabs can happen. And their donations can legitimize the philanthropists as heroes, which can discourage scrutiny of their business practices.” Indeed, the concern that philanthropists will earn some kind of public applause for their work seems to be foremost in the minds of some critics. In an interview with New York magazine, NYU professor Scott Galloway first explained that “these tech billionaires, they want something in return. I think anytime you put a press release out for your philanthropy, it should immediately not become tax deductible.”
And here we get to the heart of the matter. For years, critics of philanthropy such as Reich have been arguing that we need to stop rewarding philanthropists with tax deductions, that their money would be more wisely and equitably distributed by the government, and that allowing them to accumulate too much wealth has given them outsize political influence.
As Galloway explains, “Governments have to be funded well enough such that they can make these sorts of tectonic moves. No amount of billion-dollar donations is going to help us around income inequality or climate change or figuring out a way to fund the agencies we need to ensure this pandemic doesn’t relapse.” For some, the problems of government will always be blamed on its lack of funding — a $4.5 trillion federal budget will never be enough — and they will never consider the idea that government may not do some things well, no matter how rich it is. Rather than take philanthropists’ contributions as evidence that the private sector has a lot going for it, they warn of the dangers to the country if the wealthy gain too much credit and take these contributions as a sign that the government is starving.
Yet, in the midst of this unprecedented challenge, governments here and around the world have turned to private business and innovative philanthropists to fund and develop research that promises to deliver the vaccines and therapies that we all need. Of all the lessons of this crisis, this one stands out: Governments by themselves are incapable of solving these kinds of problems.
James Piereson is a senior fellow at the Manhattan Institute. Naomi Schaefer Riley is a resident fellow at the American Enterprise Institute and a senior fellow at the Independent Women’s Forum.